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Friday, October 10, 2008

Full Employment

Full Employment
Leads to a World Without Poverty

Our economy does not provide everyone with work, much less good paying work. Thirty percent are either unemployed (6.1%), working part-time but wanting full-time or discouraged from looking for work (6.4%), or receiving wages that place them at a below-poverty income (16.4%). If you add in the number who are imprisoned, you arrive at nearly one in three working adults either not fully producing or not being rewarded adequately. That is a gross waste. We can do better.

In our economy 28.9% of families with children under 12 cannot afford the necessities of food, housing, medical care, and child care. Millions, some 12.5% of population, fall below the poverty line of $20,000 a year income for a family of four, and others place the percentage at 17.7%. It doesn’t have to be this way. It is not an “act of nature,” or an act of God. It is an act of human design.

Full employment uses the power of government to employ the human resources of the nation regardless of the cyclical ups and downs of private and free enterprise. Full employment offers a route out of poverty and unemployment for anyone willing to apply him or herself. Today a child born to a father who earns $16,000 has a 1 in 20 chance of ever earning more than $55,000 a year. There are millions of children who fall into that category. What do you tell them about the American Dream?

Full employment would tighten up the labor market which would slowly raise the wages of the lowest paid workers. Combined with programs such as the Earned Income Tax Credit, the EITC, wages and incomes at the bottom of the scale would be ramped up without damaging small employers with huge payroll expenses.

A full employment policy would function as a ballast to the economy. It would automatically protect against price inflation. Professor L. Randall Wray makes
this argument in his book Understanding Modern Money.

During the Great Depression the unemployment rate was 17.1% on average for ten years. Economists say that half the productive capacity of the nation was wasted during that time. Private enterprise could not save itself. New Deal programs and finally government spending on the war mobilization fully boosted consumer savings and spending during the 1950s. Today, once agian, we need public spending to get the economy going.

Once again the economy is seriously “out of whack.” Wealth and income are out of balance. The top one percent, or 3 million people, in wealth own more than the bottom 91%, or 273,000,000 people, and the top one percent earns each year more than 60% of the people. The lower half of the nation owns only 2.5% of the national wealth. How can we have a healthy economy with a distribution ratio like that?

Full employment funded by federal government programs provides one method of rebalancing our national top heaviness. It has the promise of eliminating poverty.

Documentation, Full Employment Leads to a World without Poverty

30% are unemployed, part-time employed,etc, rates, drawn from Bureau of Labor Statistics, Dept. of Commerce

28.9% of families with children:
Hardships in America, Heather Bouchey, 2001, EPI, page 2

Child born to father who earns less than $16,000:
State of Working America, 2006/2007, Mishel, Bernstein, Allegretto, EPI, page 95

Understanding Modern Money, L.Randall Wray, The Key to Full Employment and Price Stability, Edward Elgar, publisher, 1998

Poverty percentages:
EPI,, Snapshot for July 2, 2008.
Official poverty measure undercounts the nation's poor, by Jared Bernstein

Wealth percentages:
U.S. Federal Reserve Bank, Survey of Consumer Finances, Currents and Undercurrents, 2006, Arthur Kennickell

Income percentages:
SWA, 2006,2007, page 79, from a Brookings/Urban Institute report, Microsimulation Model 0305, 2006

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