THE HUMPHREY-HAWKINS employment bill, as it emerges from the lastest compromise, amounts to a get-well card for the American economy. To the unemployment rate, the bill would offer best wishes for a speedy recovery; to the inflation rate, it would extend every hope for a rapid return to health.The bill is full of nice thoughts. But its practical effect, in behalf of people who need jobs, would be zero. That's why the bill ought not to be passed. It is wrong for the U.S. government to make public promises that it knows very well it cannot fulfill.
The bill's main support has been in the Congressional Black Caucus. Its authors were trying to reach a genuinely compelling social evil, an unemployment rate among blacks that is twice the rate for the rest of the population. During the Ford presidency, they felt that the administration would do little that it was not compelled by law to do. The years of experimentation in manpower training had produced little in the way of dramatic sucess. The first version of the Humphrey-Hawkins bill was an attempt to force the unemployment rate down by legislative command.
"In that original draft, the bill gave every citizen a legally enforceable right to a job. It established the government as the employer of last resort, requiring it to hire anybody who couldn't find work elsewhere. For those public jobs, it established wildly inflationary wage rates that would have sucked labor out of private industry. The bill contained economic short-circuits that would have blown the fuses in the American labor market, not to mention those in the federal budget.
Since that first draft, the bill has undergone round after round of compromise and excision as its sponsors struggled to win endorsements for it. Most of the implementation disappeared. But as the bill lost substance, it gained momentum as a symbol.
For President Carter, the bill set two crucial constituencies at odds with each other. Mr. Carter could not have been elected without heavy support among black voters. But neither could he have been elected without heavy support among voters who fear further inflation. He has attempted to extricate himself from this dilemma by imposing an ultimate round of compromises on the bill. Now, evidently, the last vestiges of new program authority have been dropped and an anti-inflation pledge has been written in.
The main point of the bill, in its present form, is to set a 4 per cent unemployment rate as a goal to be achieved over five years. How? The bill doesn't say. Why 4 per cent? Because, until recently, that was the conventional definition of full employment. It was the level below which the rate could not be pushed without a surge of wage inflation, as employers bid against each other for scarce manpower. Unfortunately, that threshold has shifted upward in recent years. In terms of inflationary risk, an unemployment rate of 5 or even 5.5 per cent currently is the equivalent of 4 per cent in the 1950s.
If there were a way to reduce unemployment by merely passing a bill, every American would have a moral duty to support that bill. But a bill setting an illusory goal isn't going to help. Mr. Carter has spoken much of his concern to re-establish the good faith of the national government and citizens' trust in it. He will not advance that purpose with legislation setting an unemployment target that neither he nor any other President can hit. The remedy for unemployment is the slow, difficult, tedious process of lifting the pace of economic growth. That's doing it the hard way, but there isn't any other way.