The Cost of Achieving Full Employment in the USA: A Lesson from History

Real jobs are not a cost to the country; they generate value. However, the idea of artificially creating jobs that should not exist, or artificially inflating the payout for these jobs, often serves more as a distraction than a solution.

The influence of artificial job creation can be traced to periods where there was a misconception that filling employment gaps was a zero-sum game. This led to policies that did more to benefit the richest 1% at the expense of overall economic health and growth.

A Historical Perspective: The Golden Era of Job Abundance

From the 1940s to the 1970s, many nations, including the USA, Britain, and other parts of Western Europe, experienced a period where almost everyone had a good job. This was a time marked by high job creation and economic stability.

However, it is crucial to understand that this period was not solely due to increased job creation. Rather, it was a reflection of a broader economic landscape with lower levels of automation, less technology, and a different distribution of wealth. The 1940s to 1970s were characterized by a more balanced economic structure, which allowed the wealthy to benefit without the economy suffering.

The Implications of Artificial Job Creation

The pursuit of full employment through artificial means can lead to several unintended consequences:

Waste of Resources: Artificially created jobs often lead to the misallocation of resources, as they may not align with the actual needs of the economy. Permanently Stunted Growth: Policies aimed at creating jobs at the expense of other economic activities can have long-term negative impacts, stifling innovation and growth. Income Inequality: Such policies can inadvertently boost the income of the already wealthy, as they have more control and resources to leverage artificial job creation.

In essence, the focus on creating jobs without considering their underlying economic and social value can be detrimental to the overall economy.

The Case for Renaming the System

Instead of striving for full employment, perhaps a more beneficial approach would be to work towards genuine, sustainable job creation. The cost of returning to a system where almost everyone has a job would be zero, as we already have the capacity and technology to create meaningful employment. Moreover, there is the potential for significant gains, including improved economic stability and reduced income inequality.

By focusing on genuinely valuable job creation, we can ensure that our economy functions better, benefits more people, and achieves sustainable growth. The historical context provides us with the necessary insights to navigate the complexities of modern job markets effectively.

Conclusion

Full employment, while a desirable goal, must be approached with a keen understanding of its economic and social implications. The lessons from the past remind us that sustainable job creation and economic growth are not mutually exclusive. By focusing on creating jobs that add real value, we can create a more stable and prosperous society for all.

The cost of pursuing genuine job creation is not just zero but offers the potential for significant economic and social gains. Let us learn from history and work towards a more equitable and resilient economic future.