Today’s Task for Economists

Abstract

Recently, I have been left aghast by the placid acceptance of many economists close to the seats of power to remain content with modest palliative measures. They appeared constrained, I assume, by a need to reduce the so-called budget deficit, if not immediately, then in some future state of affairs, usually to a state of balance. Less actively articulated was a possibly more justified fear of rekindling inflation. What is urgently needed is to bring the economy rapidly to a point of genuine full employment and to keep it there. I define genuine full employment as a situation where there are at least as many job openings as there are persons seeking employment, probably calling for a rate of unemployment, as currently measured, of between 1 and 2 percent. Practically, the desirable situation ought be one in which any reasonably responsible person willing to accept available employment can find a job paying a living wage within 48 hours. Full employment, as delineated above, would have salutary consequences for levels of production, would reduce budgetary drains for unemployment insurance benefits, welfare payments and the like, and would have a significant impact on levels of poverty, homelessness, drug addiction, and crime. It would also substantially ease tensions over such issues as defense cutbacks, race relations, free trade, and immigration, as well as over many labor-management issues such as featherbedding, demarcation, seniority, and job tenure. Genuine full employment would allow qualified workers to move vertically out of low-skill jobs to jobs more suited to their potential. Under present conditions, training programs, though micro-effective in moving the selected trainees to the head of the queue, are nevertheless largely macro-ineffective in reducing the size of the queue. With full employment, training programs would gain effectuality at increasing overall productivity. This vertical movement of potentially qualified labor out of the low-skill market would in turn