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Tuesday, April 13, 2010

Short essay about federal jobs

Public Service Employment --- the Time is Now

by Ben Leet, 4/12/2010
This essay was printed at, in April 24, 2010

One percent of U.S. households received 23.5% of the nation's income in 2007. I think this is blatantly unfair. It amounts to theft from the other workers in the U.S. The contribution of the one percent to the nation's prosperity was significant, but they did not do a quarter of all the work. I see it as a market distortion, just as a monopoly is a market distortion. Today one of every four children in the nation lives in poverty, about one in six adults is out of work or underemployed, and the poverty rate is rising. One in three workers in 2009 experienced unemployment. The nation needs capital resources to employ those whom private employers will not hire. Look at the following facts and numbers to decide whether we should create public jobs for all willing workers.

Income distribution in the U.S. over the past decades has tilted to the wealthy. The top ten percent of households now takes in more than they did thirty years ago in 1980. In 2007 the top ten percent of households received 49.7% of the national income, according to Professor Emmanuel Saez, U.C. Berkeley (see Striking It Richer, Update, August, 2009). In contrast, for forty years, between 1942 to 1982, the top ten percent's share never exceeded 35%. Contrary to logic the income tax rate on highest incomes was cut in half. The top marginal income tax rates between 1942 - 1982 were 90% and 70% for two twenty year periods, but from 1982 to 2010 their rates have averaged around 35%. Of the income shift that went to the top ten percent of households --- a shift from 33% to 50%, 1976 to 2007, a 17% shift --- 14% went to the top one percent. The top one percent dramatically increased their share of the national income from below 9% to 23.5%, as previously mentioned. Our economy performed much better from '42 to '82 when incomes for all households --- low, middle, and high --- doubled in real terms. President Kennedy observed "A rising tide lifts all boats."

This stands in contrasts with "When there is more for me, there is less for you," which describes the performance of 1980 to 2010. All boats have not risen, the tide has selected only a fraction to rise, the others have kept flat incomes. There has been "more for me" and that means in general less for the majority, and the aggregate demand in the economy has suffered. Aggregate consumer demand accounts for 70% of the economy and it drives the economy. So when it slacks off, as it has recently, we have a recession and high unemployment. We need a federal jobs program that would transfer wealth to middle and low income families.

In 2009, for the first time in 51 years (in 1949), and the second time in 78 years (in 1932), personal income dropped according to the Department of Commerce. It dropped by 1.7%. You would not think such a minor drop would create the destruction of a sixth of the nation's wealth. But it did. The financial institutions were so poorly managed that they self destructed. In the wake of their destruction, the net worth of all U.S. households dropped by 17.3% according to Edward Wolff (in the same March 2010 Levy Institute report, page 34). The median (middle family's) household's net worth sank by 36.1% down to its 1992 level. Those families lost 17 years of savings. You could say one in six dollars simply went up in smoke, and go on to say that a third of all housing value for middle income families went right out the window. Another report cites the loss of wealth to baby-boomer generation couples as approaching 45% and 50%.

Right now we pay about 10 million workers to sit unemployed receiving benefits. The payments amount to a little over $300 a week. Doing the math, you can easily calculate that $160 billion dollars is spent yearly, and no work is produced as a result. That sounds really crazy. But the ideologues that are opposed to government creation of public jobs would prefer just to keep those workers at home. And then complain about how expensive it is. The following essay on this site shows six plans to put them to work that would prove useful to the nation.

The nation in 1938 was in its ninth year of Depression and unemployment was at 19% when FDR accelerated the federal jobs programs, the PWA and the WPA. Between 1938 to 1946 idle wealth was poured into federal bonds and transferred to working families. During the war years we had under 2% unemployment for three years, 1943, 1944, 1945, due primarily to government sponsored job creation. If you check you can find details that show the top one percent's share of wealth fell from 44% in 1929 to 27% in 1949. We won the war, World War II, and now we should win another. We can create public service employment, put low income workers back to work, provide services our nation needs, and restore a lost balance to our income and wealth divided nation. There are several proposals; Rutgers University Professor Phillip Harvey calls for spending $666 billion dollars annually to create 18 million jobs paying $14 an hour with benefits. Such a powerful plan would create full employment, and spark private sector re-employment. A much higher tax affecting just one percent of the nation's households, would easily finance the expense of this plan. See the web page Drive for Decent Work,, and National Jobs for All Coalition for other detailed proposals to constructively carry forth this proposal.


Rarely mentioned facts:

The 400 wealthiest Americans own as much as the 150,000,000 least wealthy Americans --- half the U.S. population; both groups own approximately 2.5% of the national household net worth, according to the Federal Reserve report Survey of Consumer Finances. One in four households in the U.S. have no appreciable assets. Some 32.1% have less than $5,000. (Wealth Inequality Reader, p.10, and a new report by Edward Wolff, March 2010, Levy Economics Institute. page34)

The U.S. ranks 78th out of 125 nations in inequality. Seventy-seven nations distribute their national income in a more equal manner. Among industrial, advanced nations we are last in equality, first in inequality. (Source: United Nations Human Development Index, Gini Measurement, also see 'gini', where the U.S. ranks #72)

One in four U.S. children live in poverty in 2010. This is double the rate compared to other advanced nations. One in four children were eating food purchased with food stamps in December, 2009. One in two U.S. children experience poverty in some part of their childhood.

Recessions are not natural disasters, they are man-made. Similarly they are man-prevented. See (March 31, 2010) for essays by professor Jack Rasmus for a working theory on the “fundamental forces,” the lesser “contributing causes,” and the still lesser “enabling causes” of the global crisis.

Globally, the wealth of 1,011 billionaires exceeds by two times the wealth of half of humanity. (see, March 11, 2010)

We need public jobs because private enterprises are unable to hire. About 29.6% of the U.S. workforce are unemployed or underemployed (18.1%), or working “full time and full year” for less than poverty wages (11.5%), --- total 29.6% or 46 million out of 155 million workers. (see March, 2010)

These numbers may be just too, too, TOO MUCH to handle, so just take the last one. About 30% of our neighbors are with 'no job' or 'not enough job' or 'a job that pays below poverty level.' Nice work if you can get it. As stated before, 32.1% have less than $5,000 to their names or live in such families, almost 100,000,000 Americans. I think it is obvious what needs to be done. We need to do everything to raise wages and create jobs through public employment and incentives to hire. It is not time to cut back on government spending, unless you want to add years to the discomfort of millions.

Hone your arguments for creating public service employment. See,,,,,,,,, and the American Prospect Magazine.

Public Service Employment

Dear President Obama, and others, April 2, 2010

Needed: A Federal Jobs Program

To President Obama and others, April, 2010

Since December of 2007 we have lost 8.4 million jobs. I am sending a mix of plans to create federal jobs.

The Jobs Future: But first let me quote from a Rutgers University report, “Erasing this [jobs] deficit will require substantial and sustained employment growth. Even if the nation could add 2.15 million private-sector jobs per year starting in January 2010, it would need to maintain this pace for more than 7 straight years (7.63 years), or until August 2017, to eliminate the jobs deficit!” The Executive Summary also notes, “To put this new millennium into perspective, during the final two decades of the twentieth century [1980 - 2000], the nation gained a total of 35.5 million private-sector jobs. During the current decade [2000 - 2010], America appears destined to lose more than 1.7 million private-sector jobs.” (Sources at end of essay) The proposed rate of growth, 2.15 million new private-sector jobs per year, would be 80 percent faster than the growth rate from 2000 to 2007, and 10 percent slower than the growth rate 1992 to 2000.

So I offer these different plans to chose from:

1. The plan by the Levy Institute of Economics, “Why President Obama Should Care about ‘Care’” would employ 2।4 million mostly women and low-income, less educated workers at a cost of $100 billion, or about $42,000 per job. The focus of their employment would be childcare, pre-school education and in-home health care.

2. Providing work to mostly men is the plan by Robert Pollin, published in The Nation magazine, February 18, 2010, that would push $500 billion into the economy by guaranteeing to banks the loans they make to local and state governments to retrofit and insulate public buildings, and subsequently expand the loan guarantee to projects that would insulate private residences.

3. Rutgers University Professor Phillip Harvey provides a program that spends a net $666 billion to create 18 million jobs paying $14 an hour with benefits। In “Learning from the New Deal” the costs are broken down, and I’ve included the last page. Professor Harvey has been writing about full employment for over 20 years. (available for download at His program is my first choice for your administration.

рек. The brief plan by Princeton University Professor Martin Shubik outlines a plan for a permanent “Employment Reserve Authority” headquartered in the Federal Reserve. This would establish a permanent WPA-like job repository of public works projects in all 50 states, so the nation would not have to wait for Congress and the states to slowly respond to a crisis in unemployment.

5. The plan by Jeff Madrick, outlined in his book The Case for Big Government, would bring our economy more in line with other advanced economies by increasing federal government expenditures from 21% to 24% of GDP। It would cost $432 billion annually.

6. Joe Persky of the University of Illinois at Chicago offers a 5 year program to ramp up to a $975 billion expense to create about 18 million jobs paying over $18 an hour, funded mostly by a financial transaction tax. See “A Permanent Jobs Program for the U.S.” at

I was planing to include pages from these reports, but I think brevity is better. All these are available on the www net.

7. Professor Emmanuel Saez of the University of California, Berkeley, has shown that the top one percent of households received 23.5% of the national income in 2007. The bottom 60 percent of households took in less, only 20.3%. (This datum comes from State of Working America, 2006/2007, page 779 from a report by the Tax Policy Center, Brookings/Urban Institute) Moreover the one percent group received 65% of the economic gains the economy generated 2000 to 2007, as well as receiving about 35% of the tax cuts that in turn added over $800 billion to the national debt.. The top ten percent of households took in almost 50% of the national income, which amount is about 17% higher than its average income during the forty year period 1942 to 1982 when the economy flourished as never before or since. His report is on the www net.

The sum of 1) the U3 unemployment, 2) the U6 under-employment and 3) full-time workers earning below poverty wages --- is 1 in 3 workers (35.9% in March, 2010) who are not meeting their needs. They are poor, or becoming poor. We need a bottom-up stimulus. One in three workers in 2009 experienced unemployment. The next election will be fought over a new stimulus.

According to my reading of The State of Working America 2006/2007, page 79, the bottom 60% of households received 20.3% of the national income, while the top 1% took in 23.5% (this last datum from the Saez report). That is to say, about 70 families with the average income of the lower 60% would equal one family income of the top one percent. In regards to wealth, the bottom half of U.S. households owns 2.5% of the national household net worth, while the top 1% owns over 34%. That is about $23,000 vs. $14 million. That indicates that 609 average families in the bottom 50 percentiles are equal in savings to one family at the top.(see Federal Reserve report Survey of Consumer Finances).

I currently read the twice monthly blog by Warren Brussee. In 2004 he wrote the book The Second Great Depression, Beginning in 2007, Ending in 2020. He was ahead of almost everyone else, and he still is. I recommend you read his reports at WordPress blog, and you will be more wary of the economy’s putative good news.

Vice President Biden’s economic advisor is Jared Bernstein. In 2007 he wrote, “Finally, there is a role for direct public-sector employment to create employment opportunities for the least advantage in society.” (See, Briefing Paper #200) He knows a lot about this, he also co-authored a book with Dean Baker. The Economic Policy Institute, where he once published, offers a plan amounting to a $400 billion one-time stimulus.

The nation is in a teachable moment. The November election will revolve around a Democratic stimulus and a Republican rejection. You will have to carry the argument.

I hope everyone in the nation writes you a similar letter, and then watches closely.

Best wishes and Take care,

Ben Leet

--- in San Leandro, Calif.
see my blog at
see the blog for additional ideas.

Sources: see my blog, the three previous essays for full resource notation.