Public Jobs Now — Yes, It’s Time

One percent of US households received 23.5 percent of the nation’s income in 2007. I think this is blatantly excessive and unfair. Their contribution to the nation’s prosperity was significant, but they did not do a quarter of all the work. Today one of every four children in the nation lives in poverty, about one in six adults is out of work or underemployed, and the poverty rate is rising. One in three workers in 2009 experienced unemployment. The nation needs capital resources to employ those whom private employers will not hire. Look at the following facts and numbers to decide whether we should create public jobs for all willing workers.

Income distribution in the US over the past decades has tilted to the wealthy. The top ten percent of households now takes in more than they did in 1980. In 2007 the top ten percent of households received 49.7 percent of the national income, according to Professor Emmanuel Saez, UC Berkeley (see Striking It Richer, Update, August, 2009). In contrast, for forty years, between 1942 to 1982, the top ten percent’s share never exceeded 35 percent. Contrary to logic the income tax rate on highest incomes was cut in half.

The top marginal income tax rates between 1942 – 1982 were 90 percent and 70 percent for two twenty year periods, but from 1982 to 2010 their rates have averaged around 35 percent. Of the income shift that went to the top ten percent of households —- a shift from 33 percent to 50 percent, 1976 to 2007, a 17 percent shift —- 14 percent went to the top one percent. The top one percent dramatically increased their share of the national income from below 9 percent to 23.5 percent, as previously mentioned. Our economy performed much better from ’42 to ’82 when incomes for all households —- low, middle, and high —- doubled in real terms. President Kennedy observed, “A rising tide lifts all boats.”

This stands in contrasts with “When there is more for me, there is less for you,” which describes the performance of 1980 to 2010. All boats have not risen, the tide has selected only a fraction to rise, and the others have kept flat incomes. There has been “more for me” and that means in general less for the majority, and the aggregate demand in the economy has suffered. Aggregate consumer demand accounts for 70 percent of the economy and it drives the economy. So when it slacks off, as it has recently, we have a recession and high unemployment.

We need a federal jobs program that would transfer wealth to middle and low income families. This is the story of 1938 to 1946 when idle wealth was poured into federal bonds and transferred to working families. During the war years we had under 2 percent unemployment for three years due primarily to government-sponsored job creation. If you check inequality.org you can find details that show the top one percent’s share of wealth fell from 44 percent in 1929 to 27 perecent in 1949.

We won World War II, and now we should win another. We can create public service employment, put low income workers back to work, provide services our nation needs, and restore a lost balance to our income and wealth divided nation.

There are several proposals; Rutgers University Professor Phillip Harvey calls for spending $666 billion dollars annually to create 18 million jobs paying $14 an hour with benefits. Such a powerful plan would create full employment, and spark private sector re-employment. A much higher tax, affecting just one percent of the nation’s households, would easily finance the expense of this plan. See the web page, Drive for Decent Work, and National Jobs for All Coalition for other detailed proposals to constructively carry forth this proposal.