American Unemployment: Past, Present, and Future

Abstract

One can scarcely imagine a more timely and thought-provoking volume than Stricker’s survey of American unemployment, its stubborn persistence, and its menacing prospects. When Stricker sent his book to press, he could not have foreseen that two months before its publication COVID-19 would trigger a massive surge of unemployment to levels not seen since the Great Depression. Yet this book seems to have anticipated the circumstances in which we now find ourselves, and Stricker’s scholarship prepares us well to understand one of the most pressing problems with which we will likely struggle as a result of the pandemic—persisting unemployment—by setting that problem in deep historical perspective.The book is organized in two parts. Part I draws upon both history and economics to provide an overview of U.S. unemployment from the panic and depression of 1873 through 2018 and the Trump administration’s early years. That history is replete with the erroneous, unfounded, yet enduring assumptions of employers and elites that the unemployed bear a large share of the blame for their unemployment; that many, if not most of them, would shirk work if they could; that we need unemployment to keep inflation in check; and that the quest for full employment is at best a pipe dream and at worst a recipe for economic calamity. Over time, those in power have consistently clung to such beliefs even when the facts repeatedly contradicted them. Just as late nineteenth-century elites denied the reality of “involuntary unemployment” (17)—even as their cities filled with jobless people during the depressions of the 1870s and 1890s—late twentieth-century economists kept insisting that efforts to achieve full employment would transgress their fabricated Maginot line—the Non-Accelerating Inflation Rate of Unemployment (nairu)—and trigger explosive, growth-destroying inflation. They clung to that flawed theory even as contradictory evidence mounted and record low unemployment figures were reached just prior to the COVID-19 pandemic with little to no inflationary impact.Two aspects of this historical survey stand out. One is policymakers’ apparent ambivalence about accurately measuring unemployment. Stricker informs us that the first attempt to take accurate measurements of unemployment in the United States during the 1930s and 1940s followed more than a half-century of experience with bouts of mass unemployment. For a time, these early figures seemed reliable. Since the 1970s, however, standard measures appear consistently to understate unemployment, with no hint of a revision in the works as yet. The rationale seems to be that what is unknown cannot do any political harm.A second outstanding feature of Stricker’s treatment is his analysis of the huge ideological, economic, and policy reorientation that took place between 1975 and 2000, which he pithily summarizes as “a shift from the War on Poverty to the War on the Poor” (87). The ideas of neoliberal economist Milton Freidman, the monetary policies of Federal Reserve chair Alan Greenspan, and the compromises forged by business-oriented Democrats with free-market Republicans produced a policy consensus that rejected government intervention in the economy as a means of promoting full employment. Yet, while twenty-first-century policymakers apparently gave up on full employment as a worthy aspiration, the Obama–Trump recovery from 2011 to 2019 brought us closer to that goal than at any point since World War II, all without triggering the inflation that the nairu mavens had long predicted.Part II of this book steps out of history to discuss debates about the measurement of unemployment and to ask why the world’s strongest and most developed economy has suffered so much unemployment and what it might finally do to achieve full employment. Particularly pertinent in his concluding chapter is Stricker’s insistence that Americans can afford a massive jobs program. In the past, it was “not lack of money but class interests and political opportunism” that blocked such a program (187). These words are worth remembering as we contemplate how to create a good-jobs-generating economy that can rebuild the nation in response to COVID-19. We owe Stricker a debt of gratitude for this well-crafted and timely work.