The MacNeil/Lehrer Report; Full Employment

ROBERT MacNEIL: Good evening. Two days ago President Carter publicly endorsed legislation calling for full employment. The legislation, known as the Hawkins-Humphrey bill, defines full employment as only four percent unemployment. It establishes four percent as an official government target for unemployment by 1983. The bill Mr. Carter endorsed after months of pressure from black Congressmen and others is a compromise. Tougher goals and specific programs to meet them were watered down to meet administration objections. The compromise has brought press charges that the watered-down bill is a hollow gesture, an empty symbol. Tonight, the politics of full employment: the promise and the reality. Jim?

JIM LEHRER: Robin, reaction to the Hawkins-Humphrey compromise has been favorable, understandably, from those within the administration, the Congress and elsewhere who negotiated it. But outside, even those who praise it have done so with reservations. George Meany of the AFL-CIO, for instance, saying it could be meaningless if there is no follow-up action; Senator Jacob Javits noting that it`s only a tool, not the answer, unless Congress does something to enforce the goals. Outright criticism has come from the U.S. Chamber of Commerce, which says the goals are unattainable without causing double-digit inflation. But the toughest: words, as Robin said, have come from the press, the Washington Post saying it`s merely a get-well card for the American economy; LPL New York Times labeling it a mandate without a method. The press criticism has also pointed out the basic reality of the unemployment situation right now, the target of Hawkins-Humphrey: that unemployment seems to be going up, not down, standing right now at seven percent; that among blacks the unemployment rate is 13.9 percent, 6.1 among whites; that of the 6.9 million Americans now out of work the biggest rate is among young people -- 13.8 percent of all teenagers, 37.9 percent among black teenagers. Robin?

MacNEIL: The Carter administration and the Congress have taken some action this year to bring unemployment down. Four billion dollars has been appropriated and is being spent on public works projects, mostly in the construction industry. Eight billion dollars has been appropriated and is now in the pipeline for public service jobs, in work like rehabilitating public buildings, maintenance, cleaning up parks, and clerical tasks. Finally, another one billion dollars has been appropriated to provide jobs for some 200,000 young people.

The officials handling much of this job-stimulus money, under the CETA, or Comprehensive Employment and Training Act, are meeting this week in New Orleans. Among many city officials attending is Moon Landrieu, Mayor of New Orleans and past president of the U.S. Conference of Mayors. Good evening, Mr. Mayor.

MOON LANDRIEU: Well, good evening.

MacNEIL: You`ve been with all the people down there actually implementing these government job programs. What does President Carter`s endorsement of the Hawkins-Humphrey bill mean down there?

LANDRIEU: It was met with substantial enthusiasm; I suspect not so much because all of the attendees understood totally and fully, precisely what the compromise did in absolute terms, but because they had the endorsement of Congressman Hawkins and Senator Humphrey. Congressman Hawkins addressed the group and endorsed the compromise. I heard it said that -- I believe one of the major newspapers simply said it was a get well card. And I might say that even that is welcome to those of us that are trying to manage America`s major cities today, because we haven` even been the beneficiaries of good wishes in the past. But we`re very, very pleased, frankly, that apparently a practical compromise has been reached. It`s one thing to argue for a theoretical, perfect bill; it`s another thing to strike a compromise that can be enacted into law, and I don`t suggest that anyone thinks this is going to be an easy fight. It does have a chance, now that the President at least has endorsed a compromise.

MacNEIL: You heard Jim Lehrer quote George Meany as saying that this is a nice goal but it would be meaningless without a lot of follow-up action. From your perspective as a mayor, do you think that`s right, that there needs to be specific program with specific amounts of money attached to them to follow this up?

LANDRIEU: Well, I do think that despite the fact that it establishes a process and does set goals for this country, that it does require a certain amount of faith in the presidency and in the Congress. Those are the institutions that must act to meet those goals. But at least they`ve set a process, and at least they`ve begun to recognize and to state as national policy that unemployment is in fact the most serious problem that we face. And while they proceed to try to grapple with that, they recognize also that there has to be some price stability.

MacNEIL: You`ve been getting in New Orleans, Mr. Mayor, some money, presumably, under the job stimulus programs that are currently under way.

LANDRIEU: Correct.

MacNEIL: Are they making any dent in your problem at all, so far?

LANDRIEU: Frankly, if it weren`t for the already existing programs, I doubt that the City of New Orleans would be functioning at any respectable level of services. As a matter of fact, I think we, like most other cities, would be service-bankrupt. We currently have...

MacNEIL: Service bankrupt? You mean...

LANDRIEU: That`s correct. We wouldn`t be financially bankrupt because we can`t have anything except a balanced budget, but that doesn`t mean that we`re rendering the services that are needed by the people.

And we simply are using in many instances -- and there is some criticism attached to this, but every city has to do it -- we`re using public service jobs not only for the purpose of providing employment for the unemployed but also for providing service to the people of the City of New Orleans. Of some 1,200 jobs that are available to the city, 600 of those jobs are directly in city government; the other 600 are in other institutions, such as the public school system.

MacNEIL: Mr. Mayor, with the amount of money that`s coming in now, and you`re using as you`ve just described, how much would that have to be multiplied by, in your view as a mayor of a big city, to solve your unemployment problem?

LANDRIEU: Oh, I don`t think you can solve our unemployment problem with public service jobs alone. I think that the major impact has to be from the private sector. And it also is tied into other federal programs. I don`t think it`s simply a question of pumping new public employment jobs into the cities. That is one vital part of a total package. The countercyclical legislation is terribly important to us, the general revenue sharing, the public works program; all of those programs form a package which we hope ultimately has a serious impact and a significant impact on the unemployment. Now, all I can tell you is that without that money, that many people more would be unemployed than we currently have and our rate is running at approximately 7.9 percent in some neighborhoods, and this may stagger you; but in some of the poor and minority neighborhoods in this community, well in excess of fifty percent.

Jim?

MacNEIL: Good heavens. Well, thank you, Mr. Mayor. We`ll come back.

LEHRER: Let`s get another view of Hawkins-Humphrey now from economist Bernard Anderson, Associate Professor at the Wharton School of Economics at the University of Pennsylvania. Mr. Anderson served on presidential candidate Jimmy Carter`s economic task force. Mr. Anderson, many are saying that this newly cleansed Hawkins-Humphrey bill is in fact meaningless. What`s your view of that?

BERNARD ANDERSON: Well, it`s certainly not meaningless for the President of the United States to commit himself to the proposition that every American who is willing and able to work should have a job. I think it`s a matter of great significance that President Carter has come out foursquare in favor of the principles contained in the Hawkins-Humphrey full employment measure. I think, however, that the goals established in that bill, the very laudable goals, are going to be very difficult to attain without specific programs directed toward the accomplishment of the objective.

LEHRER: And there is no mention of that in Hawkins-Humphrey. As the mayor just said, that`s left to everybody`s faith in the Congress of the United States and the President, right?

ANDERSON: That`s right, and I think what that means is that this is at most an important first step, that a tremendous weight of responsibility will now fall on both the administration and the Congress to come forward with specific programs that would fulfill the hope and the promise that is contained in the expression of policy in the bill.

LEHRER: A lot of people are having trouble understanding what`s so neat and wonderful and exciting about the measure. The President was already committed as an individual to lowering the unemployment rate, I think to five percent within the same time frame. What does this do in and of itself?

ANDERSON: Well, you`ll have to understand the great struggle over the past several years to have presidential commitment to the Hawkins/ Humphrey bill. This compromise is not the first bill, by any means. There have been several versions of the Hawkins-Humphrey full employment measure. And to have the President finally commit himself to this is itself a major accomplishment. I think that is important. Secondly, it is important to have a commitment to a process for economic policy formulation that focuses specifically on the goal of creating jobs for all individuals willing and able to work; and we`ve never really had that kind of process oriented policy. It is not contained in the Employment Act of 1946, and it is contained in the Hawkins-Humphrey bill; and to that extent the new commitment is a very important one.

LEHRER: They use the word "compromise." Is it in fact a compromise? Do you think that the people who were pushing for the really strong Hawkins- Humphrey bill and the administration which wanted to kind of cool it just a little bit, not make it so strong, particularly on economic grounds -- do you think is was a compromise with both sides giving equal amounts?

ANDERSON: I was not privy to the negotiations under way. I am aware that the negotiations between the advocates of the bill on the Congressional side and in the administration was very vigorous. I have not read the bill in its entirety; I have read only a summary of the bill, and it does appear to me that the language is very laudable. But some of the provisions that I saw in earlier versions of the bill have indeed been taken out, and I think that greatly reduces the possibility of the bill in its present form of attaining the goals that it establishes.

LEHRER: Would it be correct to say your view is that it`s a good hope but there`s nothing there besides the hope at this point?

ANDERSON: That`s correct, and the danger is that it will raise expectations unrealistically. That`s the danger, that if it is not followed up by specific programs it may be a symbol of hope in many communities, especially the minority communities...

LEHRER: Like New Orleans, which has fifty percent unemployment in some minority communities.

ANDERSON: And in Philadelphia, where the unemployment rate among blacks is the highest of any city in the country. And it may raise unrealistic expectations that will not be fulfilled, certainly, without additional measures, specific programs, specific efforts to reduce unemployment.

LEHRER: Thank you. Robin?

MacNEIL: Let`s get another perspective from someone with particular knowledge of the needs in youth employment. Harriet Michel is a consultant to the Labor Department, and director designate of the Department`s Community Youth Employment Programs. Ms. Michel, you`re about to take over this really difficult problem, clearly the most critical area just in terms of numbers, and especially in minorities. Is the Hawkins-Humphrey bill -- if it gets through Congress as endorsed by the President -- going to make your job any easier?

HARRIET MICHEL: I have no idea. I am certainly pleased, as others are, that the President has endorsed the bill, but without knowing what specific programs there will be to implement and meet the goals of the bill it`s difficult to say whether my job will be made any easier or not.

MacNEIL: That`s a short way of saying that more programs are necessary to implement these goals, or to reach these targets.

MICHEL: I would think so. It: is impossible for me to imagine now what size effort would have to be mounted to reduce the national unemployment rate to even four percent. The thing that I`m most concerned about is what this means in terms of the perennial argument that adults in fact are entitled to jobs more than young people. And if every adult is entitled to a job, then what does that mean for the young people who are trying to enter the labor market:?

MacNEIL: As revealed politically, perhaps, in the fact that eight billion dollars or more was appropriated for unemployment, period; but one billion dollars only was appropriated for experimental programs to deal with youth unemployment.

MICHEL: Yes.

MacNEIL: Do you feel that the criticisms, then, that the bill is sort of nice rhetoric but without substance are in some way justified? The press bas been criticized for making this criticism.

MICHEL: I`d hold reservation. We don`t know that the President or the President`s staff is not working on some follow-up measures, and I would hold judgment until I would know more about what they`re planning to do to meet those goals.

MacNEIL: In fact I think, Mayor Landrieu, Secretary Marshall, didn`t he say down at your CETA conference today that they haven`t yet decided what to do in the next budget in this area; isn`t that right?

LANDRIEU: Well, I gathered what he said was that there was going to be an expansion of the public service jobs, and hopefully by next year have 1,200,000 jobs -- that`s an increase of some 500,000 over what is in existence today. But the other factors that I would suggest that have to be examined: number one, I don`t want to confuse two major pieces of legislation, but you do have the re-enactment of the CETA program that is before us and you also have the welfare reform program. There is a job component, obviously, in both of those programs. So I don`t think it`s a question of simply looking at this particular piece of legislation which establishes a process and sets goals, and say that because it doesn`t have anything accompanying it at this moment that there isn`t anything, backing it up. The CETA program is and can be the vehicle if we`re given time to prepare.

Now, one of the things that this planning process does for us in the cities is that it lends some stability to a labor program that over the past: four years has known dramatic change. And with the setting of a five-year goal, with the establishment of a firm policy, I think we`re able to plan and to accept any growth that is necessary in the public sector employment field.

MacNEIL: Thank you, Mr. Mayor. I just wanted to ask Ms. Michel one more question. The billion dollars that`s been applied to the youth problem so far is largely a kind of pilot or experimental thing, as I gather. Do you have any sense of what is necessary in terms of programs and money really to tackle this enormous youth employment program?

MICHEL: The entire purpose of -- well, the youth bill has two purposes, and I think for people who think that it is solely a jobs bill they will be vastly disappointed, because as you suggested in earlier comments, the numbers of youth who will be employed with this billion dollars ranges in estimates anywhere from 250,000 to perhaps 400,000 young people. This is a demonstration program to determine first, to find out what is there and what works. We know, certainly, that youth employment: programs are certainly not new. For ten years people have been experimenting rind they`ve had some successes. So the other object of this bill is to try to determine what`s out there, what will work under varying circumstances and for what kind of young people. We do not know that, and because we do not know what. works we cannot estimate at this time what it would ultimately cost to have the major proportion of our young people employed.

MacNEIL: Okay, thank you. Jim?

LEHRER: A quick thing on public service jobs. Doctor, aren`t public service jobs really a quick-fix kind of thing that are considered dead-end? I mean, is that a long-term solution to the unemployment problem, either of youth or of anyone else?

ANDERSON: Not generally. I think it depends on the type of public service jobs. There are many individuals employed in public service jobs who are providing very necessary public services that in the absence of the funds to support those jobs would not be provided, in many cities.

I think, though, that the problem-with public service employment as compared with private sector employment is, what happens when the money runs out? We`re now up to about 725,000 public service employees; I have heard that the goal next year will be 1.4 million. That`s an awful lot of public service employment, and the question is, what will happen to those individuals when the federal funds no longer flow? Will those individuals move to the private sector?

LEHRER: Let`s ask the mayor that. What about in New Orleans? You said earlier that you`re using many public service employees there in the City of New Orleans. What`s going to happen if and when the federal money runs out?

LANDRIEU: Well, of course, that`s a continuing concern to us. In my judgment there would be no way to terminate the current public service jobs without virtually destroying the operations of almost every major city in this country. Whether it was anticipated or not, most of us have become quite dependent on those public service jobs for the rendering of services in addition to reducing unemployment. I think we have got to keep in mind that when the original unemployment acts, the old PEP act, was passed, we were in a process of training people. It wasn`t until they were enacted that we began to use CETA as a mechanism to reduce the national unemployment rate. And as we made available more public service jobs, those people became indispensable to the cities. Now, there is a way it can be done, and that is by looking at the entire grant system and replacing the job component with additional either counter-cyclical funding or with general revenue sharing. But I doubt seriously whether any major city could do without its public service employees at this moment.

LEHRER: So we may be talking about a permanent program rather than something that is put in as a stopgap thing to reduce unemployment.

LANDRIEU: No, sir, I don`t think you`re talking about a permanent program, necessarily; I don`t think that we want it to be a permanent program. But I`d love to see the private sector pick up the slack, but in so doing I think there is going to have to be a trade-off with the cities of this country to provide additional funding either through counter-cyclical or through general revenue sharing or through some other grant system that permits us to hire the necessary people to render the city`s services.

LEHRER: All right, back to Hawkins-Humphrey for a moment, Dr. Anderson. How do you actually hold a President, under the Hawkins-Humphrey language, to this four percent commitment? Can`t he come and say about 1983 or so, "Hey, look, I really did want to get it down to four percent, but economic situations have been bad?" I mean, what do you do? Nothing, right? Is there anything you can do?

ANDERSON: The fact is that you really can`t hold him to it. That`s why I think the compromise measure in a way does very little more than provide the same commitment that is provided in the Employment Act of 1946. 1:f the President, in viewing the economic conditions at any time, decides that the goal is unattainable, apparently he has the option of redefining the goal. And that`s one of the problems with the Employment Act of 1946. However, one of the major criticisms of Hawkins-Humphrey is that it would be inflationary. And I think that there is very little merit in that argument because there are ways of stimulating economic activity and focusing your programs for reducing unemployment that would have a very small inflationary effect. If we attempted to reduce this high level of inflation merely through stimulative fiscal and monetary policies, it would indeed be inflationary. But if we targeted these funds more carefully to the pockets of unemployment, if we targeted on the cities -- we need a major urban policy as part of an overall measure to reduce unemployment -- if we focus on the pockets of unemployment, high unemployment among minorities, among youth, then we can reduce the aggregate measured rate of unemployment with a very minimal effect on inflation.

LEHRER: In other words, don`t scatter-shoot, go to the specific thing.

ANDERSON: Use the rifle approach rather than a shotgun, yes.

LEHRER: Mayor, let me ask you a very blunt political question. It`s been suggested here in Washington -- and I was wondering if you heard it at the mayors` conference in New Orleans these last several days - that this bill, the Hawkins-Humphrey bill, wouldn`t even have gotten this far if the Humphrey name had not been on it, and that this was considered to be a tribute, in a way, to Senator Humphrey and that okay, so it doesn`t go very far and all that sort of thing, but this is really something that had to be done. Has that been talked down there?

LANDRIEU: I haven`t heard it, but I certainly couldn`t think of a more popular sponsor of a piece of legislation at this time than Senator Humphrey. But I must say that I do not believe, nor would Senator Humphrey claim, that it is the work of only one or two people. This is a program ultimately in the form of a bill that many of us in the country have been talking about for a number of years now and building up the necessary support for. I don`t necessarily mean the identical Hawkins-Humphrey bill, but nonetheless a commitment by this nation to full employment and a recognition that of all the troubles facing this country, if you want to look at the urban crisis as one of the most serious than all of the problems, and one of the most serious is the unemployment factor. We`re concerned about inflation, but unemployment has been eating us up alive.

LEHRER: All right, sir. Robin?

MacNEIL: Ms. Michel, I think a lot of people have difficulty understanding why four percent, or any percentage above zero, is full employment. Can you explain that in simple terms for us?

MICHEL: I think I defer to my friend Mr. Anderson.

MacNEIL: Oh, Mr. Anderson. Just tell us, why is four percent full employment, in 1983 or any other year?

ANDERSON: Because you can never, in a complex economy, have a zero rate of unemployment. What they mean by zero unemployment is zero involuntary unemployment. In a society where individuals have the right to move from job to job, to come in and out of the labor market, you will always have some unemployment. The question is not whether an individual is without a job, but whether there is a job for him between the transition from in and out of the labor market and between jobs. And so at four percent there are those who believe that that is what the economists would say, the frictional level of unemployment; that`s a desirable level.

MacNEIL: But, if I`m right, was that not sort of the figure that was used during the sixties very .frequently, when Nixon and so on were talking about a full employment economy and balancing the budget on a notional idea of full employment...

ANDERSON: No, I think you have to go back before that. In 1950...

MacNEIL: Let`s not go back too far. My question is this -- we only have a few moments left -- in the changing American economy, with so many more women entering the work force, with so many younger people wanting to get into the work force, is even four percent a valid and realistic definition of full employment nowadays?

ANDERSON: I think it is.

MacNEIL: You do. Do you think it`s too high?

ANDERSON: I think it`s about right.

MacNEIL: All right. One other thing I`d like to clear up with all of you before we go. There is, and has been, a philosophical battle -we`ve touched on it tonight -- between liberals and conservatives in and out of government for a long time over whether unemployment should be solved by stimulating the economy so there`s a trickle-down through the private sector and you create jobs, or handing money directly out to people and employing them by the government. Is that battle still being fought within the administration and within government, and is that dispute harming or inhibiting the solution to this problem? Do you think it`s still being fought, or it`s been won by one side or the other?

MICHEL: No, I think it`s still being fought. As regards the youth programs, the vast majority of the jobs we envision are again in the public service sector. We have some hopes for private sector initiatives but in looking back over those things that have been tried -- the National Alliance of Businessmen and other programs -- we are not sure how to approach it. We are trying to offer. some subsidies for the private sector to do on-the-job training and apprenticeship training for youth, but we have a policy that is still in formulation as far as the youth programs are concerned. We are just not sure what the willingness of the private sector right now is to absorb young people in any great number in that regard.

MacNEIL: Mayor Landrieu, do you have a view on this? Is this battle still being fought, or is it pretty well settled one way or the other, from your point of view?

LANDRIEU: I don`t think the battle is settled, I think that there are still strongly held views on both sides. But I would believe the majority view among mayors of the country -- and I certainly don`t purport to speak for them -- is that they would like to see the private sector perform. In the absence of the private sector, and not as a last resort but as an option, to do it with public service jobs and public works. But I think we, better than anyone else, quickly understand that government by itself can`t solve the problems, that the basic moving factor in our economy and in our democratic society is the private sector and we would like to have them bear as much of that burden as possible.

MacNEIL: Thank you, Mr. Mayor. We have to leave it there. Thank you for joining us from New Orleans this evening. Thank you, Mr. Anderson in Washington. Good night, Jim.

LEHRER: Good night, Robin.

MacNEIL: Thank you, Ms. Michel.

MICHEL. Thank you.

MacNEIL: Jim Lehrer and I will be back tomorrow night. I`m Robert MacNeil. Good night.