What if Everyone Had a Job?

Taub’s classic article provides a perspective shared by many since the beginning of industrialization and particularly since corporate capitalism emerged (with significant federal incentives) and took over local economies. It was the center of FDR’s Second Bill of Rights, and the ensuing legislation introduced by James E. Murray – the Full Employment Act of 1945. It is an important message that should ground all local economic development efforts.  (Picture: Sen. Murray rides with FDR and Eleanor). 

What if Everyone Had a Job?

By Richard Taub, Sept/Oct 1996

Richard Taub

Richard Taub

When I read about efforts to build community, I continue to be struck by the fact that those who operate at the neighborhood level seem not to pay real attention to the economic world. They focus instead on building housing, having more and better services including shops, getting people to work together, and having more programs to deliver services in some organized way.

Yet it does not take a lot of effort to see that if every able-bodied person in a community had a job, many of the other problems and solutions to them would decline in importance. Indeed, many of the concerns about community building are about replacing those things that money can buy.

Imagine, for example, wealthy people living in a high-rise community, say on Chicago’s Gold Coast, New York’s Park Avenue, or San Francisco’s Nob Hill. In most cases, their effective social community does not overlap with their territorial community. Instead, it is either built around work and/or some social clubs. They pay people to look after their children, to provide adequate education, to take care of their health, and, in addition to the good policing they get, they pay for extensive security systems including doormen, patrols, and alarms of various sorts.

As one moves down the economic scale, the role of voluntary community activity and coming together plays an increasingly larger part. Parents supervise the Little League, neighborhood watch programs are established, people keep their eyes on each others kids, they organize to keep some undesirable use (to them) such as a halfway house out of the community, and they may pester the teachers in the local public schools for delivery of better education or a good after-school program.

Normally, residents of urban communities do not work in the communities or neighborhoods where they live. One of the great inventions of modern cities was that areas developed specializations of use, and that residential areas often are some distance from where people work. To the extent, then, that community building is about jobs, efforts to create them must often take place outside the community.

That part of the story has gotten more complicated in recent years, because it takes two earners to make what one used to, and women who might do many of the activities listed above (e.g. keeping their eyes on their neighbors kids or putting pressure on the schools) are less likely to have the time. Moreover, as companies move to the suburbs, many of the jobs that people now go to are much farther away than they used to be, and most of the jobs are less likely to be industrial and more likely to be in some of the so-called service and retail areas.

As one moves further down the income scale, the role of the neighborhood working collectively seems to increase in importance. Because people have less, they need to help each other more. They have to band together to get the resources that are properly due to them; they have to police their neighborhoods aggressively because so many unemployed people are hanging around, some of them drinking too much or doing drugs or working in illegal activities to provide some sort of income. They must work together to supervise youth under threatening conditions and work with the police to crack down on troublemakers, even while frightened about possible retaliation.

One problem with community building as community building is that it confuses the results with the cause. Practitioners hope that by increasing the capacity of residents to work together to solve collective problems, these communities will be better places to live. To some extent, this may be true. But in some respects, it is a little like trying to gather up the water to pour back in the pipe after the water main has broken. The issue is not how to deal with the consequences of unemployment and lack of incomes, but how to deal with the unemployment and lack of incomes themselves.

Consequently, any community-building effort that is serious and not simply palliative must move economic questions to the forefront. The challenge is to figure out how to do that. There is no one magic bullet. Methods to encourage business start-ups and self-employment – such as for-profit business creation and individual development accounts – should be in such a program. Job training and placement programs designed by working with employers as Project Quest in Texas does are also important. Systems of transportation that bring workers to distant jobs may also be useful. In addition, youth apprenticeship programs, such as those by the Fifth Avenue Committee, which teach youth real skills in short supply in the labor market, would be desirable.

In short, community building must start with connecting people to the economy. Without incomes, it is hard to imagine what people in communities can do to really make a difference in their lives.

Copyright 1996

Original publication

 

Rocky Mountain Radicals: Labor’s Rich & Powerful Allies

MHS ArticleNew in the Spring edition of Montana: The Magazine of Western History

The labor movement in the Gilded Age and New Deal era found an unlikely pair of allies in a wealthy miner and his nephew.

James A. Murray started his business empire with a few dollars in his pocket in 1863 prospecting in Rocky Mountain mining camps along Mullan Road. Over the next fifty-eight years he built a fortune that today would exceed $2.0 billion and stretched from Seattle to San Diego, and from San Francisco to Wyoming. Murray was a staunch advocate for labor and never stopped supporting their cause as anti-union corporations enveloped the American West. He funded a radical pro-labor newspaper affiliated with the Wobblies during the height of labor strife in World War I, and extended his radical legacy with a significant bequest to his equally radical nephew, future U.S. Senator James E. Murray.  The younger Murray rose to the top of Eamon de Valera’s support group in the U.S. and became the Senate’s strongest proponent of labor and progressive politics from  the New Deal Era until the dawn of the Civil Rights movement.

The story of the radical Murray family is told in depth for the first time in a beautifully illustrated twenty-page article in the Spring 2016 Edition of Montana: The Magazine of Western History. Copies of the Spring edition can be purchased individually from the Montana Historical Society.  The publication is also available in over 700 libraries across the globe. Find a copy near you on the World Catalog.

Coming next year: The biography of radical Copper King James A. Murray will be published by Montana Press Publishing Company in the Fall of 2017.

Coming in Fall 2017

Cover16Signed on today with Mountain Press Publishing Co to publish the biography of James A. Murray, a radical Western millionaire.

Murray built his fortune alone and unaided. The Irish immigrant was a fervent supporter of labor and Irish Nationalism, and fought at every turn against corporate capitalism. He operated his business empire, stretching from Seattle to San Diego and east to Colorado, out of saloons and hotel lobbies.  He dined with hack drivers and prostitutes in Rocky Mountain mining camps, and Diamond Jim Brady and Lillian Russell in New York City. During the Gilded Age he owned the most magnificent home on the California Coast and a five star resort at the edge of Yellowstone Park.

 

 

 

Tax History 101 for CBS Debate Moderators

Nancy Cordes, CBS Congressional correspondent, and a moderator at this cordesweekend’s Democratic Presidential debate, was shocked and amused at Bernie Sander’s response to her question about the top rate in his tax plan. Sanders’ remarked that it would not be as high as President Eisenhower’s ninety percent (90%) top rate – adding a humorous note that he was not as big of a socialist as was Ike.  Cordes’ amusement revealed that she either knew little about the history of tax policy in this country, or she is personally opposed to raising tax rates – neither being a good quality for a moderator.

The history of tax policy in this country is critical to understanding many of the issues that are highlighted in presidential debates. Income inequality, the cost of higher education, and the lack of funding for veteran’s programs are all tied to dramatic, and relatively recent reductions in tax rates applied to the wealthiest Americans.

The History of Income Tax Rates in America

Federal Income tax was reinstated in this country in 1913 after a nineteen-year hiatus, and by 1917 the top marginal tax rate jumped to 67% on income above $2.0 million per year (the equivalent of $35 million in 2013). The top rate dropped significantly leading up to the Great Depression, before rising again to fund F.D.R.’s New Deal.

Figure 1 below provides the tax rate applied to the highest income bracket (in blue)and the tax rate applied to households with annual incomes of $500,000 (adjusted each year to 2013 dollars and illustrated in red). Note that the differential in tax rates on the wealthiest Americans (making over $500,000) were reduced starting in the Kennedy administration and eliminated completely by the end of Reagan’s first term.

Figure 1

The chart illustrates several important points:

  • Bernie Sanders and others speaking to a higher tax rate for the 1% have history on their side (sorry Nancy, but you should have done your homework on this).
  • Brokaw’s “Greatest Generation” was served by federal programs funded through tax rates that placed a greater burden on the wealthiest Americans.
  • Medicare, aimed at serving the aging members of the Greatest Generation, was adopted at a time when tax rates focused on the wealthiest Americans.
  • Recent decreases in tax rates and elimination of free tuition (1) followed the adoption of the Civil Rights Act, denying minorities the educational opportunities afforded to the Greatest Generation and Baby Boomers.
  • Practically every presidential candidate, and debate moderator, lived during a time when tuition was free at public universities (or just a fraction of what it is today).

Figure 2 below compares the top tax rate and the top income bracket since 1913. The top income brackets are adjusted to 2013 dollars and displayed on a logarithmic scale.

Figure 2

Going forward, perhaps the questions for presidential candidates should be:

  1. “Why shouldn’t Millennials benefit from educational opportunities afforded to the Greatest Generation and Baby Boomers?
  2. Why should free college tuition, withheld from minorities prior to the Civil Rights Act, be denied to minorities after passage of the Act?
  3. Why aren’t the tax rates and tax brackets that served the Greatest Generation and the Baby Boomers not being used for the benefit of Millennials?

(1) The University of California system is used to illustrate the end of free tuition in public universities.

Note: Historical tax rates can be found at the Tax Foundation.

The Missed Opportunity for an Economic Budget

JamesEMurrayFullEmployment“There is something wrong with the distribution of income in our economy. Not enough of the income created by production gets into the hands of those that will spend it back into production.

Senator James E. Murray, 1945 [1]

The end of World War II placed employment at the top of the national agenda. Seasoned lawmakers and experienced public officials had lived through the burst of an employment bubble after WWI, twenty-five years early, and the Great Depression that followed.

President Roosevelt, during his annual message to Congress, proposed a “Second Bill of Rights” to guide Congress in establishing “a standard of living, higher than ever know before.”

The rights included:

  • The right to a useful and remunerative job in the industries or shops or farms or mines of the nation;
  • The right to earn enough to provide adequate food and clothing and recreation;
  • The right of every farmer to raise and sell his products at a return which will give him and his family a decent living;
  • The right of every businessman, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home or abroad;
  • The right of every family to a decent home;
  • The right to adequate medical care and the opportunity to achieve and enjoy good health;
  • The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment;
  • The right to a good education.[2]

Senators Harry Truman (D-MO) and Senator James E. Murray (D-MT) presided over a Senate subcommittee focused on the first point, to provide employment opportunities for all Americans. When Truman left the Senate for the Vice Presidency, the responsibility for shaping legislation fell to Murray. In 1945, Murray, Chairman of the Senate Committee on Education and Labor, drafted Senate Bill 380, the “Full Employment Act of 1945” and found bi-partisan co-sponsors in Senators Wagner (D-NY), Thomas (D-UT), O’Mahoney (D-WY), Morse (R-OR), Tobey (R-NH), Aiken (R-VT), and Langer (R-ND).

S. 380 sought to go beyond the reactionary work-relief measures crafted after the Great Depression, by taking advance measures to avoid depression and unemployment altogether. A critical element of this proactive approach was for the President to prepare a separate “National Production and Employment Budget” (Economic Budget), apart from the regular budget, that prescribes a “complete and well-rounded program for maintaining full production.” Murray believed that the Economic Budget would focus lawmakers on substantive employment policy matters every year, as opposed to merely limiting the discussion to meaningless campaign rhetoric every presidential election. [3]

During the subsequent debates of S. 380, the bill was watered-down, the Economic Budget was dropped, as was “Full” from the title. The Employment Act of 1946, adopted and signed into law, created policy objectives similar to those outlined in F.D.R.’s Second Bill of Rights, but it fell short in focusing Congressional attention on the economy and unemployment.

An annual Economic Budget is a concept worth revisiting. It could pull the nation’s most important issue off the campaign trail and put it back into halls of Congress where it belongs. It would serve as a central point to discuss living wages, work-visas, public service employment and corporate out-sourcing.

[1] James E. Murray, “A Practical Approach,” The American Political Science Review 39, no. 6 (December 1945): 1119–26.

[2] http://www.ushistory.org/documents/economic_bill_of_rights.htm

[3] Murray, “A Practical Approach.”