By John Henry
In the current debates surrounding various jobguarantee programs (in association with the Chartalistor Modern Money perspectives), it might prove helpful to review some aspects ofthe Works Progress Administration (renamed in 1939 as Work ProjectsAdministration). While the WPA was not a“job guarantee” program, it nevertheless points to a number of issues that areunder current discussion, including those of the nature of the projectsundertaken, impact on the larger economy, concerns surrounding bureaucraticimpediments, etc. Let’s begin with an introductory statement pertainingto the political and economic orientation of Franklin Delano Roosevelt (and hisAdministration).
Roosevelt was nota progressive. He ran on a balanced budget platform, and initially attempted tofulfill his campaign promise of reducing the federal budget by slashingmilitary spending from $752 million in 1932 to $531 million in 1934, includinga 40% reduction in spending for veteran’s benefits which eliminated thepensions of half-a-million veterans and widows and reduced the benefits forthose remaining on the rolls. As well, federal spending on research andeducation was slashed and salaries of federal employees were reduced. Suchprograms were reversed after 1935. And one might recall that Rooseveltattempted to return to a balanced budget program in 1937, just as the economyappeared to be slowly recovering. The result was a renewed depression thatbegan in the fall of that year and ran through 1938.
Thus, the Roosevelt Administration was forced into progressive activism becauseof massive—and organized—popular discontent based mainly in working class andsmall farmer organizations. The union movement was rejuvenated through theformation of the CIO, farmers organized to prevent the forced sales of theirproperties (and this often included the threat of armed action), rent strikeswere rampant, etc. Chicago, New York, other cities saw massive demonstrations.“Riots” shook the Kentucky coal fields. One must remember that the communistparty was large (as these parties go), active, and popular. The specter ofrevolution was in the air and some politicians responded. HamiltonFish Jr. instructed his fellow Congressmen, “(i)f we don’tgive (security) under the existing system, the people will change the system.Make no mistake about that.”
The WPA was one of several programs developed torespond to this supposed threat. Initially,the Roosevelt Administration authorized the Federal Emergency Administration ofPublic Works in 1933 (renamed in 1939 as the Public Works Administration). The PWA allocated over $6 billion to privatefirms that actually undertook the large scale projects ordered by government.Dams, including Grand Coulee, hospitals, bridges (the Triborough Bridge andLincoln Tunnel in New York City), etc.
Inthe same year, the Civilian Conservation Corps (ostensibly Roosevelt’s favoritesuch program) was organized. Exceptionally active in erosion control,reforestation, the creation of public parks, etc., the CCC hired 2 millionyoung men over the course of its history. The fundamental difference between the CCC andthe PWA was that workers on CCC projects were hired directly by the government.And this funding relationship served as the model for the WPA.
TheWPA was under the direction of Harry Hopkins, a notable figure in his day. While the program was officially terminated in1943, U.S. entry into WWII effectively ended its existence. On average through1941, the WPA employed about 3 million people each month. If we includeemployees in the CCC and the National Youth Administration (a separate programunder the WPA), total employment in government contracted work came to roughly4.3 million per month. This represented 8-9% of the U.S. labor force. Originally,the WPA was an extension of the Federal Emergency Relief Administration—thefirst federally-funded welfare program in the U.S. One rationale for the WPA was that it wasbetter to put people to work performing useful tasks rather than merelyreceiving assistance: off the dole and on the job.
Amaximum work week was set at 30 hours, and pay was set at “the prevailingwage.” This latter standard raised some unintended humorous criticism. Senator Richard Russell of Georgia complained that: “Inthe State of Tennessee the man who is working with a pick and shovel at 18cents an hour is limited to $26 a month, and he must work 144 hours to earn$26. Whereas the man who is working in Pennsylvania has to work only 30 hoursto earn $94, out of funds which are being paid out of the common Treasury ofthe United States” (In Couch, 2008).
The WPA was not intended as a“full employment” program. Only one household member could be employed underthe program (it was usually males), though one does find female heads ofhouseholds so employed. It should alsobe noted that state and local governments were required to contribute 10-30% ofthe costs of the various projects undertaken. Over its life, total spending on WPA projectsamounted to about $13.4 billion, roughly 2% of GDP over those years.
And what were those projects? Was this simply a “make work” program thatmade little difference in the long run? Or, was the WPA integral to the largereconomy and its contributions socially useful? A truncated tally follows. (See below for a slideshow of projects under the WPA)
- 560,000 milesof roads built or improved
- 20,000 milesof water mains, sewers constructed
- 417 dams built
- 325 firehousesbuilt; 2384 renovated
- 5,000 schoolsconstructed or renovated
- 143 newhospitals, 1,700 improved
- 2,000stadiums, grandstands built
- 500 landing fields; 1,800 runways (includingparticipation in the construction of LaGuardia Airport, NYC)
- State and municipal parks, including the foundation ofthe extensive California state park system.
- 100 milliontrees planted
- 6,000 miles offire and forest trails created
- Education: Through 1941, 1 million enrolled in adulteducation courses, 37,000 children in classes and nursery schools;280,000 received music instruction, 67,000 art instruction.
- Libraries werebuilt. These were especially directed toward poor and rural communities.
- Zoo buildingsconstructed
In addition to the above, oneshould note the WPA’s contribution to the cultural life of the country. Underthe direction of Hallie Flanagan, the Federal Theatre Project mounted 1,200productions including 300 new plays. Audiences were estimated at 25 million inforty states, many of whom had never before seen a play. As well, WPA programsincluded Federal Music, Federal Arts, and Federal Writers’ Projects. Thislatter program produced the most notable “Slave Narrative Collection,”consisting of 10,000 pages of interviews with former slaves, a continuingtreasure-trove for researchers. Last, let us not forget the famous murals thatwere produced by artists hired by the WPA. These dot the country from post offices(though these were mainly funded by the Treasury Department through a grantfrom the government) to college buildings, to government buildings. Included inthis array were those painted by Diego Rivera for the City College of SanFrancisco, Anton Refregier in the Rincon Annex Post Office, San Francisco, andThomas Hart Benton in the Missouri State Capitol rotunda.
Let us now turn to some numbers and tell somethingof a story about some of the macro effects of the jobs programs.
|
YEAR
|
FEDERAL
GOVERNMENT SPENDING (BILLIONS $)
|
GROSS DOMESTIC PRODUCT
(BILLLIONS $)
|
INF
RATE
|
FEDERAL
DEFICIT
(BILLIONS $)
|
UNEMPLOYMENT
RATE
(ESTIMATED)
|
ADJUSTED
|
WAGE RATE
MANUFACTURING
(1923-25=100)
|
|
1930
|
4.0
|
91.2
|
-2.7
|
-0.9
|
8.7
|
8.9
|
92
|
|
1931
|
4.1
|
76.5
|
-8.9
|
0.1
|
15.9
|
15.7
|
78
|
|
1932
|
4.3
|
58.7
|
-10.3
|
1.6
|
23.6
|
22.9
|
66
|
|
1933
|
5.1
|
56.4
|
-5.1
|
1.8
|
24.6
|
21
|
73
|
|
1934
|
5.9
|
66.0
|
+3.5
|
2.1
|
21.7
|
16.2
|
86
|
|
1935
|
7.6
|
73.3
|
+2.6
|
3.0
|
20.1
|
14.4
|
91
|
|
1936
|
9.2
|
83.8
|
+1.0
|
4.0
|
16.9
|
10
|
99
|
|
1937
|
8.8
|
91.9
|
+3.7
|
2.6
|
14.3
|
9.2
|
109
|
|
1938
|
8.4
|
86.1
|
-2.0
|
1.2
|
19.0
|
12.5
|
91
|
|
1939
|
9.3
|
92.2
|
-1.3
|
2.1
|
17.2
|
11.3
|
100
|
|
1940
|
10.1
|
101.4
|
+0.7
|
3.1
|
14.6
|
9.5
|
108
|
|
1941
|
14.2
|
126.7
|
+5.1
|
4.7
|
9.9
|
6.0
|
—–
|
|
1942
|
35.5
|
161.9
|
+11
|
19.5
|
3.9
|
3.1
|
—–
|
Source: Historical Statistics of the United States
The first matter to note is the unemployment rate.Official estimates did not count WPA (or CCC) workers as employed. Rather, theyremained on the unemployed lists as they were not working in private sectorjobs. The adjusted rate includes these workers as working—as they were. Thisresults in a roughly 6% differential and paints a much rosier picture of theeffects of the WPA and other programs in reducing unemployment.
The second issue is that of the relation betweengovernment deficit spending and inflation. Observe that in the 1930-32 period,when private sector spending fell precipitously and government spending wasflat, the economy suffered deflation and tumbling GDP—the worst possible developmentin a capitalist economy as the specter of a declining price level and GDP generatespessimistic “animal spirits” (à la Keynes). The growing federal governmentdeficits of 1932-33 were not the result of increased spending, but decliningtax revenues that resulted from declining incomes and spending in the privatesectors. With increased government spending and accompanying deficits, GDPbegan to increase as did prices. But observe that in the heyday of the WPA, theCPI rose to a mere 3.7% rate: this is in the normal range for a capitalisteconomy and clearly does not represent “real” inflation, but merely risingprices which is necessary to induce more optimistic animal spirits. Indeed,though this is not shown, private investment was rising during this period. Aswell, with rising investment and rising employment (private as well as public),real wages also rose, reaching their 1923-25 level by 1936. (Here, I use wagesin manufacturing as a proxy for economy-wide real wages, as most commentatorsfocus on manufacturing, then a much larger portion of the economy, as a keyindicator of economic health.)
We also observe that when the RooseveltAdministration returned to its balanced budget program in 1937, thingsdeteriorated: GDP fell, unemployment rose, real wages fell, private investmentfell (though not shown here), and deflation once again reared its ugly head. And,as is well known, with U.S. entry into WWII, government spending and deficitssoared, but the economy finally recovered. Had the federal government spent asmuch in the 1930’s to generate useful, constructive activities, rather thandestructive activities associated with war, it can be argued that thedepression would have been over within a year, even with the financial debacleof the late 1920’s.
Last, let’s consider two standard complaints aboutgovernment bureaucracies: they are too large, unwieldy, thus inefficient; andthey are prone to “capture” by private interests, thus do not serve the “publicgood.” Dealing with the second issue first, I have no doubt that this is aproblem in the present period at a minimum. If one puts industry pimps in chargeof the various bureaus, if one perpetrates a campaign denigrating publicservice, if one treats “public servants” as slaves, then government bureaus areripe for such capture. Indeed, an argument can be made that over the last 30years that has been the objective of various administrations—Democrat as wellas Republican. The public servants of the 1930’s seem to fit a different mold,at least in the main. If one reads about the self-sacrificing work of a HarryHopkins, of a Hallie Flanagan, of the government employees in the trenches, a quitealtered picture emerges. These people were, again, in the main,public-spirited, rather selfless, quite competent, and hard-working. We shouldnot hypothesize about the behavior and character of people of different erasusing the rather depraved standard of the current period. (See Quinn, 2008 forsome insight into the character of WPA personalities.)
The other issue is that of the size of suchbureaucracies. The WPA had a central administrative personnel of around 2,000people (depending on month and year). Most of WPA employees were at the stateand district offices where the projects were actually undertaken and the hiringof project employees took place. Again, depending on month and year, thisnumber ranged from 15 to 35 thousand. The ratio of government employees toproject workers—a more telling figure—ranged from 11 to 21 per 1,000 projectworkers, with the average running about 13/1,000 (Final Report of the WPA Program, p. 10). That is, less that 2% ofthe total number of workers in the WPA program consisted of administrativepersonnel. How would that ratio compare with, say, General Motors?
An examination of previous government programs suchas the WPA assists in developing a clearer understanding of various versions ofa job guarantee program, in both its positive and negative features. Obviously,the WPA was not such a program, but it points in that direction. Taking accountof the differences in the eras of the 1930’s and the 21st century,what lessons can be drawn from previous experiments—and the WPA was anexperiment—and what can current imaginations produce in the present period. AsKeynes stated at the beginning of the Great Depression: “As soon as we have anew atmosphere of doing things, instead of one of smothering negation,everybody’s brains will get busy, and there will be masses of claimants forattention, the precise character of which it would be impossible to specifybeforehand” (Keynes [1929] 1972, 99).
References:
Couch,Jim. “Works Progress Administration”. EH.Net Encyclopedia, edited byRobert Whaples. March 16, 2008. URL http://eh.net/encyclopedia/article/couch.works.progress.administration
FederalWorks Agency. Final Report on the WPA Program, 1935-43. Washington, D.C.: U.S.
GovernmentPrinting Office. 1947
Keynes. J. M. [1929]1972. “Can Lloyd George Do It?” In Collected Works, Vol. 9. Pp. 86-125.
Quinn, Susan. FuriousImprovisation. New York: Walker Publishing Co. 2008
