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FDR would love the Jobs for Economic Recovery Act

FDR would love the Jobs for Economic Recovery Act
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As reference after reference connects Franklin Delano Roosevelt and the New Deal to the Biden administration, it is fair to ask exactly what big, bold, reforms FDR and his New Deal allies would embrace if they miraculously returned to earth.

Of all such “what if” questions, the most important are: Would FDR and Harry Hopkins — the architects of the New Deal’s biggest jobs programs, the Civil Works Administration (CWA) and Works Progress Administration (WPA) — recommend a 21st century subsidized employment program? And if so, exactly what would it look like?

The first question is easy to answer.

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The “official” unemployment rate in January exceeded 6 percent. Over 35 percent of the “officially” unemployed have been jobless for at least 27 weeks. The real unemployment rate is arguably over 10 percent. Since February 2019, the U.S. economy has shed 100,000 jobs. As the COVID-19 pandemic recedes and the economy opens up, millions of American jobseekers will remain jobless or involuntarily work part-time.

Given these grim facts, we have no doubt what FDR, Hopkins and other New Deal champions of federal jobs programs — including Labor Secretary Frances Perkins, Agriculture Secretary (and later Vice President) Henry Wallace and Interior Secretary Harold Ickes — would say. They would quickly recommend that today’s unemployed be offered federally funded “jobs of last resort” until they are absorbed into the regular economy. 

FDR explicitly urged this course in his First Inaugural Address: “Our greatest primary task," FDR insisted, "is to put people to work." This could be achieved, he said, by assigning the federal government the task of recruiting the unemployed to accept jobs in "greatly needed projects to stimulate and reorganize the use of our natural resources.”

Exactly what federal jobs program, then, would FDR, Hopkins and their New Deal allies urge President BidenJoe BidenFederal Reserve chair: Economy would have been 'so much worse' without COVID-19 relief bills Biden to meet Monday with bipartisan lawmakers about infrastructure Jill Biden gives shout out to Champ, Major on National Pet Day MORE and Congress to enact?

We believe they would give their support to legislation already introduced in Congress  — the “Jobs for Economic Recovery Act” (S.4107). 

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The core structure of the CWA and WPA is the backbone of legislation. Like the New Deal’s jobs programs, it features broad eligibility. It will provide useful work — improving public health, the environment and infrastructure — and pay real wages. It has tough protections against abuse. 

In several ways, the “Jobs for Economic Recovery Act” improves on the CWA and WPA.

Hopkins recognized that once the Great Depression ended the private labor market would often be unable to provide employment for all who desired work. Some job seekers would have trouble landing work even in the best of times, especially in urban and rural pockets of poverty. Hopkins wanted the CWA to become a permanent part of FDR’s economic security plan, but it was dropped in order to pass the Social Security Act

The bill, however, would be a permanent program. As unemployment levels climb or fall, it would operate counter-cyclically by raising or lowering the number of government subsidized jobs.

There’s another advantage. Those employed by the CWA and WPA got no extra boost to their wages, but the earnings under the jobs would trigger receipt of the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC). 

Yet jobs created by the act would almost always pay less than what a worker could earn in the private labor market. This may seem controversial but it’s a good policy. Workers would seldom hesitate to move into better paying, private sector jobs.

The legislation already has strong support in Congress. In the Senate, its lead author is Sen. Ron WydenRonald (Ron) Lee WydenThe first Southern state legalizes marijuana — what it means nationally A bold fix for US international taxation of corporations Democrats offer competing tax ideas on Biden infrastructure MORE (D-Ore.), who is also the chairman of the Finance Committee. The House also has its own version

When FDR urged a frightened nation that the time had come for “action, and action now,” he wasn’t speaking in the abstract. The need was immediate. FDR demanded — and during his first 100 days he got Congress to pass — concrete laws to put unemployed Americans back to work. Biden and the Democrats who control Congress should do no less. As part of a reconciliation bill if necessary, they should pass the “Jobs for Economic Recovery Act.”

David Riemer is a senior advisor on the Workforce for Social Security Works and author of "Putting Government In Its Place: The Case for a New Deal 3.0.”

Dr. June Hopkins is the granddaughter of Harry Hopkins, professor emerita at Georgia Southern University, Armstrong Campus, and author of “Harry Hopkins: Sudden Hero, Brash Reformer.”