The Green New Deal has become a rallying cry for activists seeking to build a mass movement capable of addressing our ever worsening, and increasingly interrelated, climate and social crises. Building such a movement is no simple task, but I believe that our organizing efforts can greatly benefit from a careful study of the rapid transformation of the US economy from civilian to military production during World War II.
In two recent publications, with links below, I describe and evaluate the planning process responsible for the wartime transformation and offer my thoughts on some of the key lessons to be learned. In what follows I highlight some of the reasons why I believe Green New Deal advocates would benefit from careful study of the wartime experience.
There appears to be growing consensus among economists and policy makers that inflation is now the main threat to the US economy and the Federal Reserve Board needs to start ratcheting up interest rates to slow down economic activity. While these so-called inflation-hawks are quick to highlight the cost of higher prices, they rarely, if ever, mention the costs associated with the higher interest rate policy they recommend, costs that include higher unemployment and lower wages for working people.
The call for tightening monetary policy is often buttressed by claims that labor markets have now tightened to such an extent that continued expansion could set off a wage-price spiral. However, the rapid decline in the unemployment rate to historically low levels, a development often cited in support of this call for austerity, is far from the best indicator of labor market conditions. In fact, even leaving aside issues of job quality, the US employment situation, as we see below, remains problematic. In short: the US economy continues to operate in ways that fall far short of what workers need.
Many are understandably alarmed about what the September 4th termination of several special federal pandemic unemployment insurance programs will mean for millions of workers. Twenty-five states ended their programs months earlier, with government and business leaders claiming that their termination would spur employment and economic activity. However, several studies have disproved their claims.
One study, based on the experience of 19 of these states, found that for every 8 workers that lost benefits, only one found a new job. Consumer spending in those states fell by $2 billion, with every lost $1 of benefits leading to a fall in spending of 52 cents. It is hard to see how anything good can come from the federal government’s willingness to allow these programs to expire nationwide.
A growing number of business and political leaders have found yet another argument to use against federal pandemic relief programs, especially those that provide income support for workers: they hurt the economic recovery by encouraging workers not to work.
In the words of Senate Minority Leader Mitch McConnell, as reported by BusinessInsider:
“We have flooded the zone with checks that I’m sure everybody loves to get, and also enhanced unemployment,” McConnell said from Kentucky. “And what I hear from businesspeople, hospitals, educators, everybody across the state all week is, regretfully, it’s actually more lucrative for many Kentuckians and Americans to not work than work.”
He went on: “So we have a workforce shortage and we have raising inflation, both directly related to this recent bill that just passed.”
In line with business claims that they can’t find willing workers despite their best efforts at recruitment, the governors of Montana, South Carolina, Alabama, Arkansas, and Mississippi have all announced that they will no longer allow the unemployed in their respective states to collect the $300-a-week federal supplemental unemployment benefit and will once again require that those receiving unemployment benefits demonstrate they are actively looking for work.
A meaningful working-class recovery from the recession seems far away.
After seven months of job gains, although diminishing gains to be sure, we are again losing jobs. As the chart below shows, the number of jobs fell by 140,000 in December.
We are currently about 9.8 million jobs down from the February 2020 employment peak, having recovered only 55 percent of the jobs lost. And, as the following chart illustrates, the percentage of jobs lost remains greater, even now after months of job growth, than it was at any point during the Great Recession.
This is the first in a series of posts that aim to describe and evaluate the World War II mobilization experience in the United States in order to illuminate some of the economic and political challenges we can expect to face as we work for a Green New Deal.
This post highlights the successful government directed wartime reorientation of the U.S. economy from civilian to military production, an achievement that both demonstrates the feasibility of a rapid Green New Deal transformation of the U.S. economy and points to the kinds of organizational capacities we will need to develop. The post also highlights some of the strategies employed by big business to successfully stamp the wartime transformation as a victory for “market freedom,” an outcome that strengthened capital’s ability to dominate the postwar U.S. political economy and suggests the kind of political struggles we can expect and will need to overcome as we work to achieve a just Green New Deal transformation.
It wasn’t that long ago that the country celebrated frontline workers by banging pots in the evening to thank them for the risks they took doing their jobs during the pandemic. One national survey found that health care workers were the most admired (80%), closely followed by grocery store workers (77%), and delivery drivers (73%).
Corporate leaders joined in the celebration. Supermarket Newsquoted Dacona Smith, executive vice president and chief operating officer at Walmart U.S., as saying in April:
We cannot thank and appreciate our associates enough. What they have accomplished in the last few weeks has been amazing to watch and fills everyone at our company with enormous pride. America is getting the chance to see what we’ve always known — that our people truly do make the difference. Let’s all take care of each other out there.
Driven by a desire to burnish their public image, deflect attention from their soaring profits, and attract more workers, many of the country’s leading retailers, including Walmart, proudly announced special pandemic wage increases and bonuses. But as a report by Brookingspoints out, although their profits continued to roll in, those special payments didn’t last long.
There are three important takeaways from the report: First, don’t trust corporate PR statements; once people stop paying attention, corporations do what they want. Second, workers need unions to defend their interests. Third, there should be some form of federal regulation to ensure workers receive hazard pay during health emergencies like pandemics, similar to the laws requiring time and half for overtime work.
We face a multifacited labor crisis. One of the most important aspects of this crisis is the U.S. economy’s diminishing capacity to provide employment. This development is highlighted in the chart below, which shows the trend in civilian employment over the last thirty years. Civilian employment includes all individuals who worked at least one hour for a wage or salary, or were self- employed, or were working at least 15 unpaid hours in a family business or on a family farm, during the week including the 12th of the month when surveys are taken.
Workers in the United States are in the midst of a punishing COVID-19 economic crisis. Unfortunately, while a new fiscal spending package and an effective vaccine can bring needed relief, a meaningful sustained economic recovery will require significant structural changes in the operation and orientation of the economy.
The current economic crisis has hit workers hard. Unemployment rates remain high, with total weekly initial claims for unemployment insurance benefits continuing to grow. Recent reports of a sharp rise in median earnings for full-time workers appear to complicate the picture. However, a more detailed examination of worker earnings and employment not only helps to sharpen our understanding of the devastating nature of the current crisis for working people, but makes clear that low wage workers are the hardest hit.