Is serious left criticism of government’s share of GDP possible? (7)
Continued from here.
We would like to say there is at least one powerful argument in favor of Hunnicutt’s assertion that,
Roosevelt and the majority of Americans saw this free time as a tragedy that had to be eliminated by increasing economic activity-an activity stimulated by government spending if necessary.
Although true, it is just not related, in my opinion, to the unemployment crisis spawned by the Great Depression.
There is another cause, which predates the Great Depression, and, which Hunnicutt calls the only competing alternative to shorter work time on the part of American voters: the need for higher wages.
What we have to show, simply enough, is that this demand for higher wages became an over-riding concern of American voters by the time of the Great Depression, and, when combined with the catastrophic unemployment of the that event, made it possible for Roosevelt to offer his alternative approach as a conservative, palatable, alternative, bridging both concerns: avoiding unemployment and generating more income.
As the chart below shows, since 1914, and continuing until today, the price level has exploded upward in a persistent, secular, inflationary spiral.
A spiral which, based on figures supplied by the Bureau of Labor Statistics, has, over the past 94 years, made it necessary for voters to earn $2166 today for a basket of goods they could have purchased with $100 in 1914!
An argument could be made here, and we will make it, that even the catastrophic unemployment of the Great Depression affected only 25 percent of the population.
Inflation, on the other hand, though muted by the deflation of that event, continued to exert a powerful psychological pressure on the thinking of American voters – employed and unemployed alike – making Roosevelt’s expansionist policies appear to be a safer alternative to doing nothing, on one hand, and, reducing the work week, on the other.
In a monetary regime of rampant inflation, “free time,” is experienced as a tragedy not just in the obvious form of unemployment, but also in the associated forms of sub-employment, and, stagnant wages.
This free time can exist in the form of a voter unable to find work, unable to find enough work, forced by circumstances to accept lower wages for work, and, forced to accept year over year net negative increases in wages for work.
And, its resolution can appear in the form of extending the voter’s working time on a first job, adding a second job, adding more members of the household to the workforce, and, relying on extended family members to supplement income.
Thus we find, according to one study by Evan Roberts in 2003 – well after Hunnicutt’s paper, of course – this change in the labor force participation of married women:
One of the most important changes in the United States labor market in the twentieth century was the increased participation of married women. In 1900 just 5.6% of married women were in the labor market. By 1998 61.8% of all married women were working or looking for work. The change is all the more notable because the labor force participation rates of single women have grown not twelve hold, but just by half in the same century (from 43.5% to 68.1%). Increased participation by married women in the labor market has occurred because the relationship between characteristics of women and their families, and labor force participation at a point in time has changed.
Of course, the actual relationship between married women entering the labor force and inflation is far more complicated than this simple assertion – and, far beyond this blog’s ability to nail down.
However, the coincidence of these two trends – price level, and work force participation of married women – indicates there is much to be understood on the subject.
To be continued