What would a CCC or WPA do today?
On a recent trip to northern Minnesota with my brother (otherwise known as the Mississippi Valley Traveler – http://mississippivalleytraveler.com), I had a chance to visit Camp Rabideau – one of a handful of remaining CCC (Civilian Conservation Corps) camps left standing in the US. The camp is six miles south of Blackduck, MN in the Chippewa National Forest, and is a fascinating remnant of a bygone era.
For those who’ve forgotten their history, the CCC was the first of many New Deal programs that President Roosevelt put into place to counter the impact of the Great Depression. Begun in 1933, the CCC was later followed by the Works Progress Administration (WPA) and a slew of other programs that were intended to address chronic unemployment and a country struggling with a crippled economy.
The CCC and WPA directly employed those who needed work but were unable to find it– largely men, and typically one per household. The CCC was organized to build projects that the Interior and Agriculture departments needed, but the camps themselves were run by the Army. Enrollees thus lived in a disciplined environment, complete with structured daily working times, opportunities for education and recreation. Most of the enrollees for the CCC were from rural areas where unemployment was often the worst, and they were often uneducated and unskilled. The WPA was more generally targeted towards cities and towns, though it did complete work in some rural areas as well.
Over the course of 9 years, the CCC employed about 2.5 million people, and the WPA employed another 8 million from the years 1935-1943. The peak year for the CCC was 1935, with about ½ million enrolled, and 1938 for the WPA with about 3 million enrolled. CCC enrollees were paid $30/month, but $25 of that went directly to their families at home. WPA pay was more generous, at $50/month. All told, the total bill for the CCC was about $3 billion over its lifespan, and the WPA about $13 billion over its 8 years. That $16 billion (averaged in 1940 dollars) equates to about $250 billion today.
Of course, all of this got me to thinking about our economic predicament today, what we’ve attempted to do about it, and what else we might do. To deny the seriousness of our current economic climate is to deny reality. It’s clear that today’s total unemployment and underemployment rates are exceeded only by the Great Depression in recent memory. National U6 unemployment (a more complete measure than the U3 that is typically reported) is over 16% - still double what it was four years ago. In some cities/counties, that rate approaches 30%, and the same is true of unemployment among specific demographic groups. Many economists believe we’re headed for another dip because of lingering problems with the banking and real estate industries. Most respected observers agree that employment will not return to more “typical” levels any time soon, and that that will continue to be a drag on the overall economy. Worst case –we could see an even further dip with U6 levels nationwide exceeding 20%.
So, what do we do about it? This isn’t an economics blog, so I won’t debate the merits of taking a Keynesian approach vs a “free market” approach. What I can do, though, is rehash what we’ve attempted, and look at it in light of historical efforts.
For example, let’s look at the 2008 Stimulus bill that was passed to address our current malaise. The $787 billion bill contained $288 billion in tax cuts, $224 billion in entitlement spending – largely for unemployment insurance, and $275 billion for projects that were capital or infrastructure in nature. The goal was to protect between 900,000 and 3 million jobs, though the most recent reports suggest something in the neighborhood of 600,000 have been protected so far.
It’s very hard to look at just that $275 billion number and not feel that we’ve wasted it in comparison to the New Deal programs (again, which totaled about $250 billion in current dollars). Those programs employed over 10 million people for that dollar amount, over the course of about 8 years. It seems we will be fortunate to hit 1 million in employment with the stimulus bill. In addition, the $275 billion has been spent on many projects of a very dubious nature, including no shortage of road expansions and new highways. The CCC and WPA spent billions on projects and efforts that we still benefit tremendously from today – 3 billion trees planted, 800 parks built, 125,000 public buildings built, 120,000 bridges built and much, much more. The projects were thoroughly reviewed and debated by a bipartisan commission. Nearly every community in America can point to a WPA-era building or public space with pride.
Of course the primary difference on the efficiency side is that the New Deal programs had the government directly hiring and managing the projects. Today, we rely on contracting out all of the work, which obviously sends a great deal of money to company profits rather than direct employment. In the 1930’s, this wasn’t done without some amount of consternation. Both labor unions and employers were wary of the effect of the government directly hiring laborers, but ultimately a deal was struck for the good of the entire economy.
As much as anything, I also wonder what we would have a CCC or WPA do today? What kinds of projects would make the most sense, as we plan for the next 100 years? What are the easy, more inexpensive efforts that any laborer could be trained to do? Here’s a few off the top of my head: road diets throughout our cities and towns, creating bicycle infrastructure, urban tree planting, improvements to civic spaces, repair work on historic properties. In the rural areas, we could work to improve communication infrastructure, help with energy efficiency, plan for more localized, small agriculture, and improve a long list of state and national parks.
What would you suggest? This is a realpolitik discussion – we’re spending the money already, whether through the stimulus bill or in other appropriations. How can we employ the most people until the economy recovers, and leave a lasting legacy for future generations?