Why Full Employment Is Required to Sustain a Society That We're Proud to Live in

from alternet.org

by Eileen Appelbaum/for Boston Review

This article is part of Back To Full Employment, a forum on the possibilities for full employment in today’s economy.

Robert Pollin makes a compelling case for the centrality of full employment to the creation of a decent society, to the ability of individuals and families to live with dignity rather than despair, and to the overall health of an economy in which consumer spending is key to sustained growth. His capsule history of economic thinking on the causes of unemployment and the tradeoff between employment and inflation -- from Marx to Milton Friedman to Gösta Rehn -- is informative, and his main policy recommendations are difficult to argue with: increase employment in the United States by shifting $330 billion in annual spending from the military and fossil-fuel sectors to public and private investments in education and clean energy for a net gain of 4.8 million jobs.

I do have one quarrel with the analysis. Pollin observes the low unemployment achieved by the U.S. economy in the late 1990s despite globalization and accepts this as evidence that the United States doesn’t have to address its trade deficit to achieve full employment. But this was possible only in a bubble scenario. With a high trade deficit, either the public or private sector (the latter, in the 1990s example) must incur debt in order to maintain high employment. Reducing the trade deficit is essential to sustaining full employment without a repeat of bubble boom and bust.

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