now throughout the Administration we hear a chorus chanting the familiar dirge of the "old time economic religion" that the only way to bring prices down is to continue to permit increased unemployment. I believe that I can speak for all the sponsors of the pending measure when I say, as I did in my summation at the Economic Summit Conference, that all this adds up to the open violation of the Employment Act of 1946 by the Administration and the continuation of "old time sin." Second, the new "Equal Opportunity and Full Employment Act" is designed as a framework, not a substitute, for other legislation. The President's Full Employment and Production Program, required in Section 3, would most certainly have to include proposals for additional legislation. I see a number of fields in which new legislation is needed, legislation which can be regarded a necessary accompaniment-or as indispensable companion measures to the Equal Opportunity and Full Employment Act of 1976. First and foremost is tough anti-inflation and price stability legislation which will serve as permanent protection against any and all inflationary outbursts such as we are now experiencing-whether they come from uncontrollable international or natural events, profiteering and speculation, price fixing by oligopolistic corporations, or credit policies that finance speculation, oligopoly and anticompetitive mergers. Second, I see the need for a whole series of major measures in critical sectors of the economy-food, energy, transportation, housing,and regional development, to name a few. Today, we have no national food policy, no serious energy policy, no genuine transportation program, no meaningful housing program, no program of regional development, only token programs for the expansion of needed public services, and no concerted policy and program for the promotion of our fabulous potential for progress in civilian science and technology. New legislation is needed in all these fields. Third, major legislative action is also required throughout the field of human services. Health legislation, of course, is one of the most obvious areas. Just as overdue, however, is genuine action to provide proper day-care facilities for younger children at both the nursery and kindergarten levels. This is one of the keys not only to allowing welfare mothers to get off the welfare rolls, but more broadly speaking, to release the great potentialities of the many million of women who would thereby be available for full-time or part-time paid employment. Fourth, there is the broad area of social insurance, retirement, pensions, unemployment compensation and welfare. In the past, many of these programs have been conceived of as crutches to help compensate for the lack of full employment. As we develop a genuine full employment program, many of these measures can at long last be humanized. Thus recipients of old age and survivors insurance could be allowed to work as much as they wanted and earn as much as they are able-with no pressure on them to retire from the labor market. And, at long last, the welfare rolls could be substantially reduced by the only measure that makes any economic sense-namely, the provision of suitable work opportunities at fair compensation. With this drastic reduction in the number of recipients of welfare and unemployment compensation, it would be possible to legislate much more generous benefits and less onerous eligibility requirements. Fifth, there is the entire area of taxation and monetary and fiscal policy. Since this is a huge area, I shall merely make two points. One is that tax reform should be conceived of as an essential part of a genuine program of full employment without inflation. It is not something that we can afford to postpone year after year. The second is that the Federal Reserve Board should be clearly subject to the full employment policies legislated by the Congress. Finally, the policy set forth in the "Equal Opportunity and Full Employment Act" imposes major burdens on the existing structure of government. To carry these burdens, new or improved planning instrumentalities may be needed. Many proposals are now pending before various Congressional committees for new planning machinery in the Executive Office of the President and for improved planning machinery by the States and local governments, including my Balanced National Growth and Development Act-S. 3050. Perhaps some of these measures could be considered as additions to this bill. Many of them, however, will have to be regarded as companion measures to build the kind to administrative structure that will facilitate speed and efficiency, in attaining the objectives of this Act. HOW MUCH UNEMPLOYMENT AND UNDEREMPLOYMENT? On August 22nd of this year, when I introduced the "Equal Opportunity and Full Employment Act" in the Senate, I pointed out that the 5.4 million people officially reported as unemployed in June of this year were "just the tip of the iceberg." Let me now expand on that comment. First of all, most discussions of officially reported unemployment deal with the simple total and tell little, if anything, about the various groups that make up the total. Thus the August total, which appears in Economic Indicators of September 1974 shows unemployment for August of this year at a seasonally adjusted level of 4.9 million people-or 5.4 percent of the officially defined "labor force." As you know, Mr. Chairman, that figure rose sharply and dangerously to 5.8 percent in September and many expect it to rise to 6.5 percent or even higher in the very near future. In response to this imminent threat to the economic future of millions of American families, I offered a $1 billion public service jobs amendment last Friday to the Supplemental Appropriations Bill soon to come to the Senate floor. No new authority is needed, it's all on the books right now. Passage of my amendment this week can mean paychecks for 167,000 families from now until next July. I see no reason why it should not be enacted now. But these total figures obscure the blunt fact that for many groups in the population unemployment has long been far higher than 6 percent. This is illustrated by the table entitled "Official Unemployment by Selected Categories, 1973," as prepared for me by the Urban Affairs Department of Hunter College, which is attached to my testimony. To avoid getting into seasonal variations, this table deals with 1973, the last full year for which such data is available. Thus when official unemployment as a whole was 4.9 percent, female unemployment had already reached 6 percent. For single women the figure was 9.4 and for female teenagers 16-17, 17.7 percent. Racial breakdowns show a still more disconcerting picture. When total unemployment was officially 4.9, the figure for non-whites was 8.9-four percentage points higher. And for non-white teen-agers the unemployment figures rose to the socially disastrous twenties and thirties. All of these figures, moreover, are merely the official reports for a so-called "average day," based on the number of reported job seekers on twelve such days throughout the year. They do not provide information on the total number of people who may have been unemployed at some time during the entire year. That figure is given in line 11 of the companion table entitled “Varying Estimates of Aggregate Unemployment, 1973," which is also attached to my testimony. The total number of people officially unemployed at some time during 1973 was three and a half times higher-namely, 15.3 million people for the year as compared with 4.3 million people for the "average month," and 15.4 percent of the labor force as compared with only 4.9 percent. The way we are now going, with the official monthly figure already averaging about 5.3 percent and rising (or four points higher than the 1973 total), it seems likely that the total number of people unemployed at some time during the present year may well reach a staggering 18.6 million. While many of these would be single people, it is nonetheless obvious that many family members will be affected. If the ratio of unemployed to other family members is only one-to-one (which is a very conservative estimate), then it would seem that more than 37 million people are likely to be directly touched by unemployment during the current year. It is time that the American people and their leaders became aware of this convenient "shell game." It is time to stop pretending. It's time to stop sweeping millions of people "under the rug" through statistical slight of hand. Thus far, however, I have been discussing only those who are officially reported as unemployed. This leaves out of consideration the large number of adults who are not officially in the narrowly defined "labor force," which is composed of those reported as working for pay on either a part-time or a full-time basis and those reported as actively seeking work. Unfortunately, there has never been a serious and continuing survey of the American labor supply-this is, of all adult Americans able and willing to work. If we are not to close our eyes to this huge labor reserve, we must make do for the time being with rough estimates, spot surveys and studies that merely scratch the surface. The results of some of these rough estimates are shown in the table "Varying Estimates of Aggregate Unemployment, 1973." The largest and most shocking figures are obtained when one concentrates upon the poverty areas of our big cities, estimates unofficial unemployment and then includes the number of people working at poverty level wages. This has been done in the "subemployment" estimates of the Senate Subcommittee on Employment, Manpower and Poverty under the chairmanship of Senator Gaylord Nelson. And under pressure from his committee the U.S. Census rather reluctantly included a calculation of this type in the 1970 Census. The results, which the Census Bureau has not been eager to advertise, show that in 60 poverty areas of 51 cities 30.5 percent of the measured labor supply were "subemployed" in 1970— that is, either unemployed or working at jobs that paid less than $4,000 a year. Under this legislation, for the first time in our history, the statisticians would be directed to measure the changing volume and composition of the entire American labor supply. SOME BASIC QUESTIONS In conclusion, let me urge that the intensive hearings on this measure escape the narrow confines of technical economics. If there are social, political and ethical issues in this measure-and I believe there are they should be brought into the open and dealt with directly. Naturally, this legislation raises extremely complex questions of an essentially economic nature. How genuine full employment could best be sustained without inflation? What the implications of genuine full employment might be for wage levels, business profitability and the distribution of income and wealth? How a full employment economy can best be managed so as to protect and conserve the physical environment? What the contribution of a fully employed America would be to the world economy? But, the social aspects of full employment should receive at least as much attention. In recent years, as we have become accustomed to large amounts of hidden unemployment, we have tended to overlook the social costs of unemployment. People who have suggested there may be a connection between crime and youth unemployment have been accused of being "soft on crime." But during the past five years, as the New York Times point out in an editorial of September 26, 1974, which I ask to be made part of your hearing Record, there has been a 47 percent increase in officially reported violent crimes. "The long-term statistics," states the editorial, "leave little doubt that the most serious single factor in crimes of violence and against property is the dismally high rate of unemployment among youths, particularly minorities. Between one third and one half of the cities' post-adolescent black youths are out of school and out of work." Political questions must also be raised. Many of our sharpest economic and social debates revolve around questions of political power. Just what would be the implications of this measure, when enacted, on the structure of political power in this country? Would it lead to undue concentration of power in Washington? I think not. But the question should be openly faced. Finally, there are the most important questions of all-the questions of ethics, morality and religion. This is not a matter of rhetoric or glowing generalities. It is a matter of right and wrong. Exactly thirty years ago, in his Full Employment in Free Society, Sir William Beveridge made an important distinction concerning employers and employees: "A person who has difficulties in buying the labor he wants suffers inconveniences or reduction of profit. A person who cannot sell his labor is in effect told that he is of no use. Today in our great Nation millions of men and women, young and old, black and white, are being told that they are now or may soon become of no use. Can we not build an America in which people, all our people, can find challenging and fulfilling opportunities to be useful? Is not this the kind of America in which our citizens-employers and employees alike-can best prosper? In 1976 America will celebrate the 200th anniversary of its independence. And in February 1976, the Joint Economic Committee will commemorate the 30th anniversary of the Employment Act of 1946. By that time, let us hope that the Equal Opportunity and Full Employment Act-an improved and strengthened form-will be the law of the land and we shall be preparing ourselves for the various stages of its implementation. The enactment of this legislation by that time would be the best way of celebrating the commitment of the Founding Fathers to the "inalienable rights" of human beings. It would be the best way to prepare America for the challenges of the last quarter of this century. Mr. Chairman, again I commend you for the farsighted leadership you are demonstrating by your initiative on this absolutely vital proposal. I think you for the opportunity to testify on this legislation today and to work with you in the days ahead to make "full employment" not an unfulfilled promise of law, but a fact of life for every American. NOTE. All these figures relate to officially reported unemployment calculated on the basis of an annual average of twelve monthly reports. While the aggregate average was 4.3 million employed in 1973, an estimated 15.2 million-more than three times as many-were reported as unemployed at some time during the same year. Therefore, all the above figures would have to be substantially increased to reflect the total number of people in each group unemployed at some time during the year. Source: Manpower Report of the President, April 1974. Prepared by: Gross and Moses, Hunter College, September 1974. rey Moore, "How Full is Full Employment? Washington, D.C.: American Enterprise Institute, 1973. Measures the f days of unemployment per person in officially defined labor force. omic Indicators, September 1974, p. 12. nomic Report of the President," 1974, p. 58-62. Also Geoffrey Moore, 1 above, p. 28-29. Adjusts official unemto changes in sex and age composition of labor force since 1955. omic Indicators, September 1974, p. 10. Reported number of active jobseekers. power Report of the President," April 1974, p. 263. "Discouraged workers" is defined as job wanters not in because they think they cannot get a job." -Moses estimate, to be revised. m J. Abraham and A. J. Jaffee, "A Note on Alternative Measures of Unemployment and the Shortfall in Employ70-72, New York Statistician, May-June 1972, p. 2-5. Adds to official unemployment an estimate of those who xjobs if full employment existed. power Report of the President," April 1974, p. 285. M. Sweeney and Harry Magdoff, "The Dynamics of U.S. Capitalism," New York, Monthly Review Press, 1972, p. A. Levitan and Robert Taggert, "Unemployment and Earnings Inadequacy: A New Social Indicator," Challenge, ebruary 1974 5 above, less over-65, 16-21 and currently unemployed with above-average income for year, plus ly unemployed below a "poverty threshold." npower Report of the President," April 1974, p. 310. Total persons experiencing some unemployment (as debove) during year. ram M. Gross and Stanley Moses, "How Many Jobs For Whom?" in Alan Gartner et. al, eds. Public Service EmNew York, Praeger, 1973, p. 28-36, includes rough restimates of job wanters among so-called unemployables, ns, men 25-54, older people, students and manpower trainees. Bureau of the Census, Census of Population, 1970, "Detailed Characteristics: U.S. Summary," 1973, p. 706 in labor force who worked for pay in last 10 years. te Labor Subcommittee on Employment, Manpower and Poverty, Sub-employment Index, November, 1972. us currently employed at less than 4,000 a year, 60 poverty areas in 51 cities. as 14 for workers earning less than $7,000 a year. THE REAL WAR ON CRIME ny yardstick of reporting and bookkeeping, the 47 per cent rise in violent -356—743 |