Sixty Million Jobs

MR. WALLACE has painted a stimulating picture of what sixty million jobs and 200 billion dollars of product would mean to wage earners, farmers, and business. He shows plainly that the achievement of these goals by 1950 would simply mean that the nation would be making economic progress at the normal rate. His vivid chapter on the enormous backlog of unsatisfied needs is an encouraging forward step in New Deal thinking — a recognition that it was wrong to describe America as a mature economy destined to stagnation unless the government maintained a chronic deficit. Mr. Wallace believes in balancing the budget — in fact in doing more than balancing it, because he looks to the gradual reduction of the national debt. This is a second important forward step in New Deal thinking. He does specify (quite properly) that the balance be achieved over the business cycle, not each year.

An excellent feature of the book is the picture of how sixty million jobs might be distributed. Almost 90 per cent of them would be in private industry and over one fourth in trade and various service industries, including domestic service. Significant is Mr. Wallace’s estimate that agriculture would supply only about eight million jobs — a drop of over a million in comparison with pre-war years. Let us hope that Mr. Wallace is correct, because chronic overemployment in agriculture has long kept farm incomes as a group far below city incomes.

Although the book vividly describes the backlog of needs which ought to make possible the realization of sixty million jobs, we find little space devoted to detailed suggestions of policies which might promote full employment. Mr. Wallace has some excellent suggestions on making technological discoveries more widely available to industry, and on tax reform. He does not, however, come to grips with the problem that the people who do most of the saving are taxed at such severe rates that they are bound to prefer safe investments to risky ones. Full employment requires that a large proportion of savings go into risky ventures.

Mr. Wallace advocates higher wages and low prices as a way of getting full employment. He would have done well to warn against raising wages so rapidly that payrolls fall rather than increase, as they did during the decade of the thirties. Wage rates went up faster than ever, but the nation’s payrolls in 1939 were smaller by 8.5 billion dollars than in 1929, and there were nine million unemployed. Mr. Wallace says little about profits, but he appears to appreciate their importance in getting jobs created because he forecasts corporate profits after taxes of about 18 billion dollars when the national product is 200 billion dollars. This works out at considerably higher profit per dollar of sales than prevailed in 1929. My guess is that somewhat smaller profits will provide an adequate incentive.

Mr. Wallace proposes that the President submit to Congress each year a guess as to what production and employment will be during the following twelve or eighteen months. It would be a sobering and informing experience for the country to watch the President attempt to call the economic turns. The forecasts of the government’s revenues and receipts in the President’s budget messages during the last ten years have been substantially wrong about one fourth of the time.

I forecast, however, that the President will refuse to indulge in guessing economic trends. Can one imagine the President’s predicting a downturn in business? What would be the results if he did? And suppose a downturn came which the President failed to predict. What a field day the opposition would have in the next campaign!

SUMNER H. SLICHTER