2013년 3월 22일 금요일

[자료: of the U.S.] The Employment Act of 1946

자료 1: G.J. Santoni, The Employment Act of 1946: Some History Notes (FRB of ST. LOUIS, November 1986)

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자료 2: "The Employment act of 1946" (Institute of Labor and Industrial Relatons Bulletin (University of Illinois Bulletin, April 1947) : Internet Archive entry (PDF)


자료 3: James G. Ryan, Leonard C. Schlup, Historical Dictionary of the 1940s (M.E. Sharpe, 2006): 구글도서

※ 발췌 (excerpts): Employment Act of 1946 (항목 기술자: David O. Whitten)

Politicians began planning for the postwar economy before WWII ended. Would the nation return to depression with the cessation of war spending, as it did in 1938 when New Deal spending was reduced? Could America tolerate additional depression years and high unemployment on the heels of a devastating war and its sacrifice? The preeminent market economy, the United States, has led the world in victory against the Axis powers, but Communism flourished on the other side of the globe. With enormous aid from the United States, the USSR had won impressive victories against the Third Reich but now threatened to counter the United States in the postwar years. Could America afford to allow unemployment to soar in the face of what might be viewed as a successful alternative economic system?

The U.S. response was embodies in the full employment fill of 1945, proposed legislation that would make the U.S government responsible for full employment, price stability, and prosperity. Americans were ready to commission the federal government to maintain national economic health, but not ready to demand full employment, so the full employment bill gave way to the Employment Act of 1946. Congress did not accept responsibility for full employment, but did assume the lead in monitoring economic conditions and determining what legislation might improve employment and prevent mass unemployment. The new law established machinery to monitor economic conditions and assess options. The Council of Economic Advisers (CEA) was created as the president's economic arm: its three members (appointed by the president, by and with the advice and consent of the Senateㅡthe president designates one of the members as chair) and their staff evaluate legislation for economic implications and ramifications and make recommendations to the president for its disposal. CEA also suggests economic legislation to the president and offers supporting information for the annual Economic State of the Union address specified by the Employment Act. On the legislative side, the Employment Act provided for the Joint Economic Committee of Congress, which, supported by a staff, does for Congress what CEA does for the president. Harry S. Truman was the first president to appoint a CEA.

The Full Employment and Balanced Growth Act of 1978 (Humphrey-Hawkins Act) amended the Employment Act of 1946 and required the Federal Reserve System to show how monetary goals fit the president's economic policy. The Fed must submit its monetary policy goals to Congress, with an explanation of how they relate to the short-term objectives of the president's Economic Report within 30 days after the president transmit it to Congress.


자료 4: Vol. 1 of Poverty and the Government in America: A Historical Encyclopedia (지은이: Jyotsna Sreenivasan, ABC-CLIO, 2009): 구글도서

※ 발체(excerpts): Full Employment

"Full employment" is the idea that every person who wants a job should have a job. If the private sector cannot provide enough jobs for everyone who wants one, then the government should step in to put people to work. Full employment does not mean that the unemployment rate will be zero, because there will always be people who have left a job and are looking for another one. Under full employment, however, the unemployment rate will be quite low. Full employment at a living wage is seen as a solution to poverty, because unemployment, and employment at very low wages, are major causes of poverty.

The Great Depression caused wide-spread unemployment and poverty. In response, the federal government started numerous temporary jobs-creation programs, such as the Federal Emergency Relief Administration, the Civil Works Administration, and the Works Progress Administration. These agencies ended in the early 1940s, after the United States entered WWII. The massive government spending triggered by the war led to full employment during the war years.

After WWII, the United States became interested in a full-employment policy. No one wanted another Great Depression. in 1944, President Franklin Roosevelt, in his proposed Economic Bill of Rights, declared that Americans should have "the right to a useful and remunerative job" (quoted in Woolley and Peters n.d.).

The first full-employment bill considered by the U.S. Congress was Full Employment Act of 1945. This bill stated that "All Americans able to work and desiring to work are entitled to an opportunity for useful, remunerative, regular, and full-time employment" (quoted in Santoni 1986, 8). The sponsors of the bill did not believe that full employment could be achieved by relying only on private businesses. So the bill required the federal government to spend and invest the money needed to create jobs and achieve full employment.

Opponents of the bill argued that full employment would lead to high inflation. They believed that a very low unemployment rate would lead businesses to offer higher wages (to attract more workers). Business would then raise their prices to cover the higher wages they were paying. Supporters of the bill agreed that full employment might lead to high inflation, but they also believed that high unemployment was even more harmful to the country that high inflation. Opponents of the bill argued that the right to a full-time job for everyone who wanted one was a promise that the government could not possibly keep (Santoni 1986, 10-11; Uchitell 2006).

The bill was then changed to accommodate the views of its opponents. The name of the bill was changed to the Employment Act of 1946. This bill not include a right to a full-time job. The federal government was no longer responsible for ensuring full employment. Instead, the federal government merely declared that it had a policy to "promote maximum employment, production, and purchasing power" (quoted in Santoni 1986, 12). In other words, the government wanted to address not only employment with this bill, but also inflation. This bill was passed and sighed by President Harry Truman in February of 1946.

This law did little to affect the country's unemployment rate. According to Gary Mucciaroni, "The overriding significance of the Employment Act of 1946 was what it failed to accomplish" (1990, 25). It did not motivate the federal government to get involved in promoting employment or stimulating the economy. Nevertheless, the economy was robust and unemployment remained low (less than 5%) until the mid-1970s, when the unemployment rate rose to 8% (Santoni 1986, 12).

At this point, people feared another economic depression. In 1976, two members of CongressㅡSenator Hubert Humphrey and Representative Augustus Hawkinsㅡintroduced the Full Employment and Balanced Growth Bill of 1976. Much of this bill was taken directly form the Full Employment Bill of 1945. The Humphrey-Hawkins bill again declared a right to full-time employment. Again, opponents argued that full employment would cause inflation. The bill that was finally passed and signed by President Jimmy Carter in 1978 no longer contained a right to full employment. It also did not include any way for the federal government to create jobs. However, it did establish goals of a 4% unemployment rate and a 0 % inflation rate. It also required the president to create goals regarding employment, prices, and income. (... ...)


자료 5: Michael James Lacey, ed., The Truman Presidency: 구글도서

※ 발췌(excerpts): The Employment Act and its effect, pp. 99-101.

While the reconversion to peace was being accomplished in 1945 and 1946, the new advisory institutions that Congress finally agreed were needed to meet the mounting economics challenges were formed and put into effect. As is often the case, what was put in place was substantially a reaction to what had gone before. Despite hopes harbored by some in the early days of discussions about the Murray Bill that a large new planning and directive agency would be created (perhaps a successor to OWMR), or at least an "Economic General Staff," unhappy recollections of the New Deal, together with departmental jealousies, joined with other factors, among them an activist group of alarmed business lobbies, to maker certain that the Employment Act, when passed, contained nothing more threatening than a three-person Council of Economic Advisers(CEA) to the president, a Joint Economic Committee of Congress, and and annual economic report by the president. With memories of the recently deceased National Resources Planning Board still strongㅡand of its penchant for large studies squarly within the Executive Office of the President, and the members had status approaching that of cabinet members.[22]

The Employment Act (S. 380) in its final form set out to declare national policy on three subjects: employment, production and purchasing power. It did not contain the words "full employment" and avoided direct reference to the use of public expenditures to supplement private expenditures. The requirement that the president submit an annual economic report to Congress replaced an earlier proposal for a "National Production and Employment Budget." Nevertheless, the CEA remained substantially an outgrowth of Keynesian, or fiscalist, thinking, and thi character was to become both its strength and its weakness. It was a source of strength, because by 1946 many business leaders had come to recognize that full employment achieved through a flexible fiscal policy could be the best of all worldsㅡthey would have buoyant markets and minimal governmental intervention. As one business consulting group told its client as S. 380 came up for passage, "So far as the bill may achieve it goal of sustaining employment through greater purchasing power, it will mean more prosperous businessㅡthough total profits may not increase proportionately. To the extent that the goal is achieved by stimulating business investment it will in fact be a 'business bill.'"[23]

The weakness growing out of the Keynesian origins was the precise emphasis on output, employment and price levels. The CEA, in effect would be asked to do both too much and too little. The Budget Bureau recognized this problem immediately and pointed it out to the president, while at the same time advising him to sign the Employment Act. Harold Smith, the director, explained:
The establishment of the Council is based on the theory that policies designed to create and maintain maximum employment, production and purchasing power can be separated from other aspects of the Federal Program, and that responsibility for advising the President on employment policies can be separated from responsibility for counseling him on other aspects of his economic and fiscal program. This again is a very serious defect of the bill.[24]
In fact none of the first three CEA members was a strict Keynesian, although all knew and were sympathetic to Keynes's ideas. (...)

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