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The Long, Tortured History of the Job Guarantee

How liberals, over decades, worked to undermine a proposal that has long enjoyed public support

H William Tetlow/Getty Images

It took a half-century of growing inequality, a massive recession, a spoiler primary campaign by a self-proclaimed socialist, and the election of a quasi-fascist, but big ideas are here again for Democrats. Medicare for All, paid family leave, tuition-free college—not since the late 1960s and ’70s has the Democratic Party had such a bold, liberal agenda. Now, likely presidential candidates are even talking about job guarantees and universal basic income. The future seems left indeed.

But before assuming that anything is possible, it is worth considering just how bad things had to get for these goals, many of which were first proposed long ago, to be revived—and what destroyed these causes in the past, when the progressive coalition was much stronger. Major reform of the kind now under consideration has only passed in times of extreme crisis. (Think about how much of the liberal Democratic state was enacted in a mere six years, shared between the New Deal and Great Society.) And while the party appears to have decided to “lurch left” to win back the blue-collar whites who voted for Donald Trump after voting for Barack Obama, there is no shortage of research demonstrating that American economic policy has long been well to the right of where voters actually want it.

The job guarantee is a great example. Over the last month, progressives have been celebrating the legislation recently introduced by Senator Cory Booker, calling for a pilot job guarantee in 15 cities and regions, co-sponsored by Senators Elizabeth Warren and Kirsten Gillibrand. But this bill preempts universal job guarantee legislation being drawn up by Bernie Sanders and rejects even the limited job guarantee advocated by the Center for American Progress, suggesting that Democratic leaders still do not understand the severity of the problem. Those excited by the idea ought to remember, too, that it was liberals, not conservatives, who have killed job guarantee bills in the past.

Direct job-creation seems foreign now, but it was the very heart of the New Deal. Virtually every penny spent in those years went to an alphabet soup of programs like FERA, CWA, PWA, CCC, and the WPA. These were responsible for thousands of schools, hospitals, parks, airfields, roads, sewers, trails, and other valuable infrastructure, helping lay the groundwork for the famous post-war economic boom. Every county in the nation but three had a major public works initiative. And for a solid decade, the U.S. government remained the largest employer in the nation.

Joblessness also fell dramatically, if we count public labor—to 9 percent in FDR’s first term, and to 6 percent in 1941 (and this was before the war). No later Congress was more successful. The growth rates in that period were impressive, too, averaging between 8 and 10 percent, far better than most recovering economies. Kiran Klaus Patel, in his 2016 book The New Deal: A Global History, notes that direct job-creation was the most distinctly American feature of the New Deal, although many local governments have used the program in economic downturns through history. Philip Harvey, Steven Attewell, Edwin Amenta, and others have argued that FDR’s Committee on Economic Security saw the better-known insurance and welfare program as fallbacks, actually, to a primary, “forgotten leg” in the welfare state: public employment.

Recent pieces on the job guarantee sometimes note that FDR gave the right to work the top spot in his famous second Bill of Rights. And with fear of depression returning after the war, farmers, unions, and liberals mobilized behind a Full Employment bill that ostensibly would have created a permanent WPA. But while a pair of racist southern Democrats and one northern Republican are often blamed for defeating this social democratic legislation, the best new research finds that it was already “one of the most conservative” proposals floating around Congress, before the House ever voted—watered down by the New Deal Keynesian economists who drafted and reworked what became the 1946 Employment Act (which provided full employment in rhetoric only).

Happily, depression did not return. But in the fabled 1950s economy, unemployment steadily increased after three recessions, and then “automation” entered the lexicon. By the late 1950s, Walter Reuther, the left-labor leader, was calling for a March on Washington and a “Marshall Plan for the cities,” soon joined by civil rights leaders. John F. Kennedy responded with the first national job training program, but it did little. Lyndon Johnson followed with the Keynesians’ solution: a tax cut, expected to “unleash” the market and (what else?) “create jobs.” Unemployment fell, helped by the Vietnam War, but high rates of joblessness remained, particularly for the “unskilled” and discriminated groups. Very soon after LBJ’s War on Poverty began, various government departments began pushing for direct job-creation and calling for the government to become “employer of last resort,” ideas JFK and LBJ had many times rejected. But domestic welfare was subsumed by the war.

Hubert Humphrey carried the banner in 1968, promoting federal planning for jobs, housing, and community development. But when he lost to Nixon, reformers in the party rejected this approach. “New Politics” Democrats turned to George McGovern, who implied that postwar Keynesianism had failed, and instead offered a far less popular solution with voters (and the poor): a “demogrant,” or universal basic income (UBI). Every American would receive an annual income of $1,000, instead of a job.

The debate between “guaranteed” jobs or income played out in the 1972 primary between Humphrey and McGovern. Each candidate battled for the soul of the Democratic Party, with two competing versions for resolving unemployment and poverty. In Humphrey’s corner were the NAACP and AFL-CIO. Remnants of the anti-war movement and wealthy suburban liberals backed McGovern.

There were no winners. After Humphrey’s primary attacks, McGovern quickly abandoned the demogrant, a third as large as Nixon’s guaranteed income plan (a precursor to the Earned Income Tax Credit), which Eugene McCarthy led the fight against. Then came the larger economic crisis of the 1970s: rising unemployment, high inflation, and stagnating wages. Democrats made an unusual move, endorsing the Humphrey-Hawkins Act in the 1976 platform, the first real attempt to establish a job guarantee since the late New Deal. House Majority Leader Tip O’Neill called it the “centerpiece.” Voters responded by electing a filibuster-proof majority in the Senate, a 74-seat majority in the House, and Jimmy Carter, who officially committed to support the bill.

But the same veterans of the Great Society killed it. Carter blamed high energy prices for “stagflation,” as well as unions—the largest army in the Democratic base. Despite support from civil rights and religious groups, Carter refused to provide an enforcement mechanism for the legislation, which passed, but in a gutted, toothless form, just like the earlier Employment Act.

Ronald Reagan dismantled the job program Nixon had been forced to create just before his reelection. In response, Democratic Party elites followed the advice of the so-called New Democrats, and steadily moved right on “bread and butter” issues. When the Cold War ended, Bill Clinton, who cut his teeth on the 1972 McGovern campaign, reanimated the idea of converting the military—the longest-running, if unacknowledged, jobs program in the U.S.—to more economically and socially productive industries (as McGovern had suggested a generation earlier, taking off from the now-lonely work of Seymour Melman). But the idea never took. Even self-admitted socialists like Oakland’s Ron Dellums refused to close military bases in his district, emblematic of Democratic politicians across the board who failed to recognize defense as an endless source of patronage and pork.

By the time Barack Obama became president, Democrats never entertained full employment in any serious, programmatic manner—highlighting how far they had strayed from their New Deal origins in terms of economic policy.

Support for a government-imposed ceiling on unemployment, for socially useful, economically productive, and individually satisfying work, has remained extraordinarily high into the Reagan era and present. But popular support alone cannot enact legislation. Clear barriers, intellectual and institutional, stand in the way. Wall Street is considerably stronger, and unions are on their knees. Under Trump, an exciting groundswell of activism has appeared. But it is questionable whether the resistance is powerful enough to defeat the donor class, which is violently opposed to a job guarantee. And many of the special interest groups that have replaced the unions and civil rights groups of earlier decades remain “heads without bodies,” unable to marshal constituents to the cause.

Grassroots organizations like Black Lives Matter or the National Women’s March, meanwhile, lack the deep pockets of these liberal lobbies. Democratic policy goals have lurched left, but there is no major effort underway to reform the electoral or legislative system, as the left in earlier periods believed necessary to any major policy goal.

Even when the left had both the numbers and financing to rival the GOP, job guarantees were rejected for weak temporary programs because New Deal and Great Society liberals assumed, like their opponents, and most Democratic leaders today, that capitalism would eventually (one day! soon!) provide for all. The jobs vs. income debate is somewhat a false either/or, but it is not surprising that one-percenters in Silicon Valley and Democratic Party elites still favor the UBI overwhelmingly against a public option in the labor market, despite persistently lopsided support for one and not the other. A job guarantee threatens corporate power, while an income guarantee subsidizes it.

If the latest job guarantee is not going to end like the rest, progressives will need to grapple with these ideological and institutional barriers. Or fail once more.