Monday, September 14, 2009

Remembering the New Deal; Response to Shared Prosperity

A reminiscence of the New Deal and a response to Shared Prosperity and the Drive for Decent Work, Garth Mangum, Max McGraw Professor Emeritus of Economics and Management, University of Utah, 6 September 2009

Let me begin with some personal reminiscence. I began life on a sharecrop farm. We farmed 40 acres and kept half the output of hay and grain, delivering the other half to the landowner. We did not feel abused, given that it was his land. We fed our half of the hay to our animals, some of which were milk cows. We separated the milk, selling the cream and giving the skim to the pigs and we kids, of whom I was the oldest. That approximately $200 a year was our only cash income. Some of the grain fed chickens who delivered us eggs. The rest went to the four mill, some of which paid for the flour and cereal we got in return. We had plenty to eat but little cash.

Then came what others called the Great Depression but was a great boon to us. In 1933, from the Federal Emergency Relief Act (FERA) we got clothing, blankets, etc., and from the Civil Works Agency (CWA) Dad got employment for him and his team of horses, rebuilding public roads. There being no reclamation yet in much of the irrigated west, drought overcame us. We left the sharecrop farm in 1934, buying 2 ½ acres 125 miles away for $150, $50 down from selling farm animals (shot and burned in the barnyard with payment from the new Agricultural Adjustment Act ) and farm equipment and the rest finally paid off, after continuing annual payments, with the beginning of World War II. We built a basement home with a ground level roof with an upstairs to be added in subsequent years and went to work for surrounding farmers, $2 a day for Dad and piece rates for Mom and we kids on fruit and berry farms, and planted our own 2 ½ acres for production in future years. Then in 1935 came for Dad the Public Works Administration (PWA) followed by the Works Progress Administration (WPA), 11 days a month at $4 a day, digging sewers, building roads, painting public buildings and so forth, with the rest of the month working for surrounding farmers at a continued $2 a day. Indoor plumbing would await World War II also, but we soon had a “Roosevelt Monument,” a WPA-built permanently located and chemically-cleaned outdoor toilet costing $10 and replacing the homebuilt and frequently-moved two-holer of our own construction.

As I grew older, I obtained a bicycled17 mile paper route making $15 a month, continuing farm work during the days in season and sweeping the floors after school for, as I remember, $7 a month from the National Youth Administration (NYA). We had no one in our immediate family of age for the Civil Conservation Corps, though I would years later marry the younger sister of a CCC veteran. After Pearl Harbor, Dad left for carpenter work in Nevada and then returned for further such projects in Utah. I spent the summer of 1942 on some of the final WPA projects in our area, concreting irrigation ditches with older WPA workers shoveling the sand, gravel and cement into the concrete mixers and we young guys paid by the irrigation company pushing the wheelbarrows. My senior high school year, 1942-43, I spent half-day at a former CCC facility learning to be an airplane mechanic, half-day back at the high school learning mathematics and aeronautics, followed by a doubled-sized and double-distanced but automobiled newspaper route. That was followed by employment in 1943 as an airplane mechanic’s helper at an Army Air Force base and subsequent volunteered service in the Army Air Force for the remainder of the Second World War.

I spent a few years trucking and coal mining after the war until I wised up and at 27 became a college freshman, building houses for a living during my undergraduate years. A question at the time was “How do you get to Washington?” and the answer was “You go to Harvard and turn left.” Which I did and packed a Ph.D. in Economics off to serve in the Kennedy and Johnson administrations.

That story may explain my subsequent continuing advocacy of public service employment as recommendations from National Commission on Technology, Automation and Economic Progress (of which I was Executive Secretary) in 1965 and as an actuality within the Comprehensive Employment and Training Act of 1973 (much of which I had written some years earlier).

From all this, I suspect I am somewhat of a radical on the Jobs For All topic. For instance, I would limit unemployment compensation to those who can reasonably expect recall or re-employment with their existing skills within a few weeks. Otherwise, I would provide public service employment at a living wage or a combination of part-time employment and part-time retraining for them until they can return to or move on to jobs of their choice. I would forget the minimum wage but guarantee public service employment at a living wage which employers would have to equal or surpass to attract employees. I am a general supporter of the employability development thrust of the Temporary Assistance to Needy Families (TANF) but I would add public service employment as a replacement for public assistance for those unable to obtain other employment after training.

I advocate the universal availability of but not requirement for pre-school education followed by K-14 public education, the latter-years making maximum possible use of competency-based education, to assure that all youth are prepared for family-sustaining earnings. I would keep the school doors open at taxpayer expense for a second chance for all for employability development for family-sustaining earnings. Taxing their subsequent higher earnings will repay the public investment.

I would delay Social Security retirement immediately to age 70 and then move it forward at approximately 15 years earlier than the average age at death, using Social Security Disability for those unable to work that long for health reasons. And during those years I would encourage community service. I do not view idleness as a great accomplishment or reward.
As a labor arbitrator for many years, I would encourage unionization of employees who desire it but would expect employers to refuse what they consider to be unreasonable demands. Strikes are a reasonable pressure approach from both sides for reaching agreement.

I would exercise comparative advantage to give workers throughout the world opportunities for employment favorable to them while we work at tasks at which we have comparative advantage. I would stop being the world’s policeman but participate in and support United Nations efforts to fill that role.

I would urge government to limit budget deficits to public investments with multi-year returns and to recession-proofing with subsequent repayment within the business cycle. I am also a strong believer in progressive taxation with conviction that we of higher than average incomes (not much higher in my case) know how to get our due rewards.

In general, I agree with the provisions of Shared Prosperity and the Drive for Decent work and wish all participants the best in the 13-14 November 2009 conference.

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