THE FED, CIVIL RIGHTS, AND THE STRUGGLE FOR FULL EMPLOYMENT

Okay, here’s some news that ain’t exactly new: Inflation is still running at a four decade high, the Federal Reserve is still jacking up its benchmark interest rate and, before all of this is over, we very well could end up in a recession.

And if that happens—if, in fact, a recession is in our near future— then you can bet that it’ll be those with the least who suffer the most. The very groups that are struggling with economic precarity are typically the ones who get slammed the first—and the hardest— by the joblessness spawned by economic recessions.

It’ll be the very groups and communities that got whacked by the health, social, and economic crisis of COVID-19 that’ll get economically pummeled should the Fed’s strategy of rate hikes result in a “hard” rather than “soft” landing.

All of which brings us to another piece of news that ain’t exactly new: Labor activists, racial justice advocates, civil rights advocates, faith community members and progressive politicians once advocated a conception of full employment that prioritized the right to a job at livable wages and, in the process, protected and promoted the human dignity of those who are often treated as disposable, particularly when the economy takes a downturn.

Recovering and reclaiming this particular notion of full employment can serve as a corrective to the ease in which the interests of the least gets lost in the current discussion about the Fed and its policy response to inflation.

A ROBUST CONCEPTION OF FULL EMPLOYMENT

The roots of the particular conception of full employment initially adopted and pushed by progressive forces, including what Blanc and Yates call the “activist wing” of the civil rights movement, is traceable back to the Great Depression of the 1930s and the wind down of World War II in the 1940s.

As the war wound down, for instance, racial and economic justice advocates—as well as progressive politicians— wondered aloud whethe the cessation of combat would mean a return to the high unemployment and economic distress that characterized the 1930s.

The war demonstrated a fully employed economy was possible, but the question remained, can such an economy be built and sustained in peacetime?

In an outstanding paper on this very issue, the authors quote the words from a 1944 speech that Willard Townsend, an African-American labor leader, delivered at Fisk University:

Will peace destroy the gains toward full employment of the Negro? What will be his status at the end of hostilities? A depressed economy has always meant but one thing for the Negro worker— widespread unemployment. If we have an economy of full employment, it will establish a framework favorable to the continuing occupational advancement of the black worker; and to the removal of white worker’s fear of him as an economic rival.

It’s this type of energy that also made its way over into the legislative arena. Take, for instance, the Full Employment Bill of 1945. Sponsored by Senators Wagner (D-NY) and Murray (D-MT), the Bill conceptualized full employment as that situation where all “Americans able to work and seeking work have the right to useful, remunerative, regular and full time employment.”

The Bill passed the senate but not the more conservative house. Still, it helped to tap into and further popularize a notion of full employment that’s centered on the right to a job at a livable wage.

Genuine full employment, in short, required the realization of the right to work.

This same sentiment— namely, that the Federal government has an obligation to utilize its fiscal and monetary policies to secure the right to work and genuine full employment— runs like a thread through much of the post-war actions and policy initiatives centered on racial and economic justice.

This includes the 1963 March on Washington For Jobs and Freedom, A. Philip Randolph and Bayard Rustin’s 1966 Freedom Budget, Martin Luther King, Jr.’s call for an Economic Bill of Rights, the Black Panther Party’s Ten Point Program, the Equal Opportunity and Full Employment Act of 1974 sponsored by Rep. Augustus Hawkins, Coretta Scott King’s founding of the National Committee For Full Employment/Full Employment Action Council and, more recently, the research being undertaken by economists like William Darity, Darrick Hamilton, Philip Harvey, Pavlina Tcherneva, and Stephanie Kelton.

Again, throughout all of this, there’s an embrace and straight up advocacy of the right to a gig at livable wages as constituting the heart of full employment.

FULL EMPLOYMENT VERSUS MAXIMUM EMPLOYMENT

The Federal Reserve operates under a Congressional mandate to pursue dual goals: price stability and maximum sustainable employment.

That first mentioned goal— price stability— simply means that part of the Fed’s job to keep inflation under control: to use its powers to keep the aggregate price level from increasing like bananas; to keep the rate of annual increase low and steady. Right now, the Fed is targeting an average annual rate of increase of 2%.

As you probably know, the aggregate price level is now increasing at about 8.3%. All those rate hikes are geared toward ultimately getting that back down to 2%.

But what about the goal of maximum employment? What in the world does “maximum sustainable employment” mean?

There’s a lot of ambiguity here but when you listen to enough “Fed Speak” and read enough “Fed Stuff,” it becomes increasingly clear that “maximum sustainable employment” means the highest level of unemployment that can be sustained without unleashing price instability (i.e., average price increases that substantively exceeds the goal of 2%).

Think of it this way: It’s how many millions policy makers are willing to sacrifice at the altar of price stability.

And herein is the immediate importance of that notion of full employment that’s traceable to the 1930s and 1940s, and whose roots are found in the writings and work of much of the post war economic and racial justice advocates.

These voices dare us to think beyond the constraints embedded in such notion of “maximum sustainable employment.”

These voices beckon us to engage in the bold task of imagining a political economy wherein the right to employment is at the heart of the notion of full employment.

These voices push us to stretch our collective imagination and will to fight for a polis grounded in economic and racial justice, and where everyone who is able, ready, and willing to work are guaranteed a good gig that contributes to the common good.

These are the voices that are sorely needed in our current discussions about inflation and the possibility that the Fed may be leading us into a recession.

These are the voices that remind us of the importance of interrogating monetary policies to clarify and highlight the impact that they’re likely to have on the economic status of the least of these

These are the voices that need to be revisited and reclaimed if millions are not to be sacrificed at the altar of price stability

These are the voices that’ll help us to think through how we might have both price stability and genuine full employment.