Monday, March 30, 2009

Re-Post Number 2: "What Would a Modern WPA Look LIke?" (August 8, 2007)


This post comes a day later than the first, when I shifted from talking about the historical issues involved and started doing a little policy-blogging. What's interesting here from two years out or so is how the numbers for poverty and unemployment look good compared to the current day.

So below you will find some of my earliest thinking about how direct job creation would actually work:


In my last diary/blog post, I talked about learning about Sen. Edwards' job plan and my own research into the historical roots of public employment.

Today, I thought I'd share a rough idea of what a modern public employment program would cost and what it would produce and what it would look like.

In my next diary, I'll talk about the potential released by a larger public employment program than the 1 million suggested by Sen. Edwards.

Note: for the purposes of full disclosure, I'm not a trained economist. If I've made an error in my statistics or my economic assumptions, please feel free to correct me.

To begin with, I'm using Senator Edwards' proposal for 1 million "stepping-stone" jobs as my baseline, as its one of the more concrete of the current presidential candidates' proposals on creating public employment jobs. Let's say for the purposes of argument that Senator Edwards' plan would create 1 million public employment jobs. If we were to offer a salary of, say $20,000/year (approx. $10.50/hr) plus health insurance, which is not a great salary but not awful either, that would provide significantly more than the minimum wage and according to the current U.S poverty line (which I know if not very accurate), just about over the poverty line for a family of four.

In terms of cost, I've worked it out that Edward's proposal would cost $20 billion a year in payroll (assuming an avg. salary of $20k/year), so figure $30 billion total a year when you throw in land, materials, overhead, and so forth (historically speaking, the WPA's total non-labor budget was approximately 20% of the total; here, I've estimated 30% to be on the safe side). In budgetary terms, that's extremely doable without affecting the deficit to a degree that causes significant inflation.

In terms of the impact on American society, those one million jobs created, assuming an average household/family size between 2.59-3.14 (the difference is largely due to counting single households), could bring 2.59-3.14 million people out of poverty, which reduce poverty by 7.2-8.7%, bringing the total U.S poverty rate down to 11.1-10.9%, which be the lowest since 1972. This in in and of itself would be a major social and economic policy accomplishment, probably one of the greatest in the last thirty years.

In terms of what you could do with those jobs, quite a lot. The roughly two-million-worker-strong WPA's building program over the eight years of its operation included the construction of 116,000 buildings, 78,000 bridges, and 651,000 miles (1,047,000 km) of roads and the improvement of 800 airports. That works out to what, 14.5 thousand buildings, 9.75 thousand bridges, 81 thousand miles of road, and 100 airports a year? Keep in mind, that's with 1930's levels of productivity, skills, and technology.

With modern productivity, even assuming that the unemployed people who are hired have half the average productivity of the American worker (the average American worker produces approx. $90,000 a year in goods and services), we'd still produce public goods and services to the tune of $47,000/year per worker, for a grand total of $47 billion produced per year. Deducting the cost of running the program, and you're still adding $17 billion to the economy that wasn't there before (a net profit of approx. 30%)- just in untapped labor power.

As to what this program would look like, I'd point you back in the direction of the public employment programs of the New Deal. When the New Deal established public employment programs, they created a kind of "movement culture" that resembled that of the new unions. Workers on public employment programs showed a huge rebound of morale after dispiriting years after years on the unemployment line - famously, one woman told a reporter "my family isn't on charity. My husband, he works for the government."

People who worked for the CWA and later the WPA founded their own newspapers where they described themselves as an "army of the unemployed" who would "slay the dragon of the Great Depression through work." In New York City, for example, the administrator of the CWA (Civil Works Administration) was so dedicated to his work of providing jobs for some 250,000 people, that he actually worked himself to death in the winter of 1933. The New York City's CWA TIMES printed a banner headline "KILLED IN ACTION" and compared the administrator to Leonidas of the 300 Spartans at Thermopylae.

Workers in the CWA and WPA formed the Worker's Alliance, a union of the publicly-employed, who marched in the streets on behalf of their program and their work. In my research into these programs, I came across an envelope in the CWA correspondence archives in the FDR library in Hyde Park, which was filled with photos that workers on a CWA project in Pennsylvania had sent President Roosevelt of themselves building the stone wall of a library as a thank-you present for giving them jobs, and the look in the faces of these men, wearing fedoras and collared shirts to look their best even as they posed with wheelbarrows of bricks and trowels and hammers in hand, was one of great pride and joy, and a real sense of comradeship.

More on the potential of a larger public employment program in my next diary.

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