Can Everyone Get a Job?

The trouble college youths are having in finding jobs is only part of a much larger national problem: 7.6% of the U.S. workforce is unemployed--down from the recession peak of 8.9% but still worrisome. Is it possible to guarantee a job to everyone who wants one? For two full days last week, the cavernous Caucus Room of the Old Senate Office Building resounded with testimony from experts summoned by the Joint Economic Committee to answer that poser. TIME Economic Correspondent John Berry reports:

The chairman of the Joint Economic Committee wasted no time stating the issue as he saw it. "We stand today at a historic crossroad," said Senator Hubert H. Humphrey. "We can accept the policies that have brought stagflation. Or we can . . . replace them with a new economics." He was referring to the "Full Employment and Balanced Growth Act of 1976," which he has co-authored with California Representative Augustus Hawkins and which is rapidly becoming a kind of election manifesto for liberal Democrats. The true purpose of last week's hearings was to give national exposure to the legislation.

Humphrey's grandiose proposal would set a national goal of 3% unemployment for adults, to be reached within four years of enactment. The Government would be ordered to create jobs in public service and launch public works programs to achieve that end. The goal is noble, and drew support from such witnesses as Bishop James Rausch of the U.S. Catholic Conference; Murray Finley, president of the Amalgamated Clothing Workers of America; and Newark Mayor Kenneth Gibson, speaking for the urban poor.

But it speedily became apparent that few of the witnesses had actually read the bill's 50 pages. The bill would put the nation much farther into the business of economic planning than it has ever gone: the President would be required every year to present a program to Congress that would set numerical goals for jobs, production and purchasing power, and tailor federal programs to achieve that end. Some parts of the bill also are internally inconsistent. One section would require the Government to spend as much as necessary--estimates range from a low of $12 billion all the way to $25 billion--to achieve a 3% unemployment rate. Another provision would require expenditures to match the revenues that Washington would collect at that rate, which would imply spending less than the Government is doing now or boosting taxes sharply. Neither would be the way to create jobs.

Although no one pointed out that contradiction, witnesses brought up other problems. Frank Morris, president of the Federal Reserve Bank of Boston, noted that many economists believe unemployment cannot be pushed below 4.5% without sharply boosting inflation.* But inflation was virtually unmentioned. Main reason: as the bill's more candid supporters admit, it would not be effective without wage and price controls--but they are anathema to labor unions. Significantly, Sar Levitan, director of the Center for Manpower Policy Studies at George Washington University, estimated at a previous hearing that to reach 3% unemployment in four years, national output of goods and services would have to grow at an annual rate of 7.5%. He added: "The nation has never achieved such a sustained high growth."

Alan Greenspan, chairman of the President's Council of Economic Advisers, made another telling point: "There are so many different types of unemployment that they require very different remedies." Other witnesses advanced special ideas. Reginald Jones, chairman of General Electric Co., commented that tax incentives to industry would go a long way toward cutting unemployment by encouraging businessmen to invest in job-creating expansion. Said Economist Robert Eisner of Northwestern University: "If you want to create more jobs, cut the payroll tax"--i.e., the Social Security tax. Since an employer pays part of the tax as a fixed percentage of each worker's wage, a reduction would allow him to put a new worker on the payroll at a smaller total wage-and-tax cost than at present. Arthur Burns, chairman of the Federal Reserve Board, once again accepted the idea that the Government should be the employer of last resort--"but at an unattractive wage." The nation will surely be listening to much more argument about the bill as the presidential campaign heats up. But the hearings on it demonstrated that though full employment is a goal everybody desires, there is nothing resembling a consensus on how to reach it.

* Inflation now seems to be subsiding. The consumer price index rose at an annual rate of only 1.2% in February, mainly because food prices dropped by 1%--the largest one-month decline in 20 years. That decline is scarcely likely to be repeated in coming months, but the smaller rise in living costs is nonetheless encouraging.

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