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Lost in the Debt Ceiling Debate: The Legal Duty to Create Jobs

By Jeanne Mirer and Marjorie Cohn

The debate about the debt ceiling should have been a conversation
about how to create jobs. It is time for progressives to remind the
government that it has a legal duty to create jobs, and must act
immediately – if not through Congress, then through the Federal

With official unemployment reaching over 9%, the unofficial rate in
double digits, and the unemployment rate for people of color more than
double that of whites, it is nerve wracking to hear right wing
political pundits say the government cannot create jobs. Do people
really believe this canard? On “Real Time with Bill Maher” a few weeks
ago, Chris Hayes of The Nation stated that the government should
create and has in the past created jobs, but he was put down  by that
intellectual giant Ann Coulter who said, ”but they (WPA jobs) were
only temporary jobs.” No one challenged her.

 Most of the jobs created under the Works Progress Administration
(WPA) - and there were millions of them - lasted for many years, or
until those employed found other gainful employment. They provided a
high enough income to allow the worker’s family to meet basic needs,
and they created demand for goods in an economy that was suffering,
like today’s economy, from lack of demand. The WPA program succeeded
in sustaining and creating many more jobs in the private sector due to
the demand for goods that more people with incomes generated.

The most galling thing about pundits stating with such certainty that
the government cannot create jobs is the implication that the
government has no business employing people. In actuality, however,
the law requires the government, in particular the President and the
Federal Reserve, to create jobs. This legal duty comes from three
sources: (1) full employment legislation including the Humphrey
Hawkins Full Employment Act of 1978, (2) the 1977 Federal Reserve Act,
and (3) the global consensus based on customary international law that
all people have a right to a job with favorable remuneration to
provide an adequate standard of living.   .

1.      Full Employment Legislation

The first full employment law in the United States was passed in 1946.
It required the country to make its goal one of full employment. It
was motivated in part by the fear that after World War II, returning
veterans would not find work, and this would provoke further economic
dislocation. With the Keynesian consensus that government spending was
necessary to stimulate the economy and the depression still fresh in
the nation’s mind, this legislation contained a firm statement that
full employment was the policy of the country. As originally written,
the bill required the federal government do everything in its
authority to achieve full employment, which was established as a right
guaranteed to the American people.  Pushback by conservative business
interests, however, watered down the bill. While it created the
Council of Economic Advisors to the President and the Joint Economic
Committee as a Congressional standing committee to advise the
government on economic policy, the guarantee of full employment was
removed from the bill.

In the aftermath of the rise in unemployment which followed the “oil
crisis” of 1975, Congress addressed the weaknesses of the 1946 act
through the passage of the Humphrey-Hawkins Full Employment Act of
1978. The purpose of this bill as described in its title is:

"An Act to translate into practical reality the right of all Americans
who are able, willing, and seeking to work to full opportunity for
useful paid employment at fair rates of compensation; to assert the
responsibility of the Federal Government to use all practicable
programs and policies to promote full employment, production, and real
income, balanced growth, adequate productivity growth, proper
attention to national priorities."

The Act sets goals for the President. By 1983, unemployment rates
should be not more than 3% for persons age 20 or over and not more
than 4% for persons age 16 or over, and inflation rates should not be
over 4%. By 1988, inflation rates should be 0%. The Act allows
Congress to revise these goals over time.

If private enterprise appears not to be meeting these goals, the Act
expressly calls for the government to create a "reservoir of public
employment." These jobs are required to be in the lower ranges of
skill and pay to minimize competition with the private sector.

The Act directly prohibits discrimination on account of gender,
religion, race, age or national origin in any program created under
the Act.
Humphey-Hawkins has not been repealed.  Both the language and the
spirit of this law require the government to bring unemployment down
to 3% from over 9%. The time for action is now.

2.      Federal Reserve

The Federal Reserve has among its mandates to "promote maximum
employment.”  The origin of this mandate is the Full Employment Act of
1946, which committed the federal government to pursue the goals of
"maximum employment, production and purchasing power."  This mandate
was reinforced in the 1977 reforms which called on the Fed to conduct
monetary policy so as to "promote effectively the goals of maximum
employment, stable prices and moderate long term interest rates."
These goals are substantially equivalent to the long-standing goals
contained in the 1946 Full Employment Act. The goals of the 1977 act
were further affirmed in the Humphrey-Hawkins Act the following year.

3.      The global consensus based on customary international law that all
people have a right to a job with favorable remuneration and an
adequate standard of living

In the aftermath of World War II, and for the short time between the
end of the war and the beginning of the Cold War, there was an
international consensus that one of the causes of the Second World War
was the failure of governments to address the major unemployment
crisis in the late 20’s and early 30’s, and that massive worldwide
unemployment led to the rise of Nazism/facism. The United Nations
Charter was created specifically to “save succeeding generations from
the scourge of war.” To do so the drafters stated that promoting
social progress and better standards of life were the necessary
conditions “under which justice and respect for obligations arising
under treaties and respect for international law can be maintained.”

It is no accident that one of the first actions of the UN was to draft
the Universal Declaration of Human Rights. (UDHR or the Declaration).
The Declaration was ratified by all then members of the United Nations
on December 10, 1948. It is an extremely important document because it
not only recognized the connection between the respect for human
dignity and rights, and conditions necessary to maintain peace and
security. The Declaration is the first international document to
recognize the indivisibility between civil and political rights (like
those enshrined in the Bill of Rights) on the one hand, and economic,
social and cultural rights on the other.   The UDHR is the first
document to acknowledge that both civil and political rights are
necessary to create conditions under which human dignity is respected
and through which a person’s full potential may be realized. Stated
another way, without political and civil rights, there is no real
ability for people to demand full realization of their economic
rights. And without economic rights, peoples’ ability to exercise
their civil rights and express their political will is replaced by the
daily struggle for survival.

The Declaration, although not a treaty, first articulated the norms to
which all countries should aspire. It stated that everyone has the
right to an adequate standard of living. This includes the rights to:
work for favorable remuneration, (including the right to form unions),
 health, food, clothing, housing, medical care, necessary social
services, and social insurances in the event of unemployment,
sickness, disability or old age. There has been a conspiracy of
silence surrounding these rights. In fact, most people have never
heard of the Universal Declaration of Human Rights.

Similarly, most Americans do not know that the UN drafted treaties
which put flesh on the broad principles contained in the Declaration.
One of the treaties enshrines Civil and Political Rights; the other
guarantees Economic, Social and Cultural Rights. These treaties were
released for ratification in 1966. The United States ratified the
treaty on civil and political rights and has signed but not ratified
the economic, social and cultural rights treaty.

The latter treaty requires the countries which have ratified it to
take positive steps to “progressively realize” basic economic rights
including the right to a job. Almost all countries of the world have
either signed or ratified this treaty. When most countries become
party a treaty, they do so not because they think they are morally
bound to follow it but because they know they are legally bound. Once
an overwhelming number of countries agree to be legally bound,
outliers cannot hide behind lack of ratification. The global consensus
gives that particular norm the status of binding customary law, which
requires even countries that have not ratified a treaty to comply with
its mandate.

       The conspiracy of silence

With the duty to create jobs required by U.S. legislation, monetary
policy and customary law, why has the government allowed pundits to
reframe the debate and state with certainty the government cannot do
what it has a legal obligation to do?

We allow it because of the conspiracy of silence which has prevented
most people from knowing that the full employment laws exist, that the
Federal Reserve has a job-creating mandate, and that economic human
rights law has become binding on the United States as customary
international law.

Congressman John Conyers of Michigan knows about the Humphrey-Hawkins
Full Employment Act, and he has introduced legislation that would fund
the job creation aspects of that Act in the “The Humphrey-Hawkins 21st
Century Full Employment and Training Act,” HR 870. It would create
specific funds for job training and creation paid for almost
exclusively by taxes on financial transactions, with the more
speculative transactions paying a higher tax.

If Congress refuses to enact this legislation, the President must
demand that the Federal Reserve use all the tools relating to
controlling the money supply at its disposal to create the funds
called for by HR 870, and to start putting people back to work through
direct funding of a reservoir of public jobs as Humphrey-Hawkins

There is nothing that would prevent the Federal Reserve from creating
a fund for job training and a federal jobs program as HR 870 would
require, and selling billions of treasury bonds for infrastructure
improvement and jobs associated with it. The growth in jobs would
stimulate the economy to the point that the interest on these bonds
would be raised through increased revenue. There is no reason the Fed
on its own could not add a surcharge on inter-bank loans to fund these
jobs. These actions could be done without Congressional approval and
would represent a major boost to employment and grow the economy. If
the Federal Reserve is going to abide by its mandate to promote
maximum employment, and comply with the Humphrey Hawkins Act, and the
global consensus it must take these steps.

Failure of the Fed and the President to take these affirmative steps
is not only illegal, it is also economically unwise.  The stock market
losses after the debt ceiling deal is in part based on taking almost 2
million more jobs out of the economy and will only further depress
demand creating further contraction in the economy.   This is not an
outcome any of us can afford.

Jeanne Mirer, who practices labor and employment law in New York, is
president of the International Association of Democratic Lawyers.
Marjorie Cohn is a professor at Thomas Jefferson School of Law and
past president of the National Lawyers Guild.


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