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CETA: A '70s Government Jobs Program That Didn't Work

5 years ago
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In the late 1970s in the Jimmy Carter administration, I had a ringside seat for the political collapse of the last modern attempt to replicate a massive New Deal jobs program. This repudiation of public service employment marked the symbolic end of 20th century big government liberalism, although as an aide to Secretary of Labor Ray Marshall I only dimly sensed the coming Reagan Revolution.
Normally, this is not a story that turns me into a prized raconteur at dinner parties. But this half-forgotten attempt to deal with the human cost of high unemployment (7.5 percent when Carter took office) suddenly takes on a new relevance as government-created jobs have emerged as a leading policy option on the left. The program's appeal to those panicked about the deathbed economy is obvious. Instead of trying to indirectly spur employment with tax incentives, public works spending, and aid to state governments, a government jobs program would take a direct whack at the jobless rate.

Related: With 16 Million Jobless, Should the Feds Pay People to Work?

That was the idea back in 1977 when Carter, responding to liberal pressure, spurred Congress to dramatically expand the anti-recessionary CETA program (Comprehensive Employment and Training Act). Peaking at 725,000 public service jobs in 1978, CETA by itself trimmed nearly 1 percent off the unemployment rate before adding in the economic ripple effects from all these new paychecks. Given this statistical success, why did CETA become as derided as Jerry Ford's attempt to tame escalating prices with WIN (Whip Inflation Now) buttons?
Americans have always been skeptical of temporary government jobs dating back to Franklin Roosevelt's WPA, which employed 3.3 million otherwise jobless in 1936. The image of government-paid workers leaning on their shovels was a Depression era staple and the WPA (Works Progress Administration) was mocked as standing for We Piddle Around. In the Labor Department, we recognized that this would be a perception problem with CETA, but public employee unions made it nearly impossible to solve. The unions demanded that CETA employees either be paid comparable wages to existing government workers (impossible for cost and fairness reasons) or else they explicitly should be limited to tasks that were not already being done.

That was the crux of the policy dilemma: The voters did not want make-work and the unions did not want real work.
The unions, of course, prevailed. As a result, I vividly recall that a county in California used CETA workers to conduct a cat-and-dog census. (Truth in anecdotage: I have been unable to find a document to confirm this memory.) CETA employees did perform useful work -- from asbestos removal to assisting in libraries and senior citizen centers. But these workers also got fobbed off to nonprofit agencies, many of them community action leftovers from the 1960s with (shocking revelation ahead) political ties.
What made the problem worse was that Washington only loosely controlled CETA. Following the questionable gospel that state and local governments always know best, CETA programs were decentralized. (I failed to interest anyone in recreating the Federal Writers Program and publishing new editions of the Depression-era state guides). Local officials reaped the credit if library hours in, say, Omaha were extended because of CETA workers. But every scandal ­-- like the brother of a city councilman getting a no-show CETA job -- was directly blamed on the Carter administration. Another memory: someone deliberately set a fire in a downstate Illinois city hall to destroy the records of illegal CETA jobs.
Looking back at that era, I am embarrassed by the earnest naiveté of many of us in the Carter administration. Since the Democrats (after that unfortunate Richard Nixon detour) were America's natural governing party, mid-level political appointees did not have to worry about effective management. Good intentions were enough. Some of the rules that governed CETA were inadvertently self-defeating, such as limiting participation to the long-term unemployed. As a result, workers who could not hold jobs in flush times got many of the CETA slots, while the short-term victims of the economic downturn often were left on the sidelines. That may have been crude social justice, but it did little to enhance the image of CETA workers.
Conservatives reading this brief history may feel justified in their scorn for government programs. But the problem with CETA was not that it embodied Big Government, but that it was not big enough. CETA left behind no lasting monuments like LaGuardia Airport and the Hoover Dam, no evocative art like the WPA murals in post offices and libraries. The administration of CETA was lax, but almost all of its scandals were small-bore local corruption.
Today, even more than in the 1970s, there is a moral argument for public service employment. While Barack Obama's stimulus package was advertised as shovel-ready, a public jobs program would be people-ready. The societal waste and the wrecked lives from double-digit unemployment will leave scars that may take decades to heal. But what liberals should have learned long ago from CETA is that effective management matters – and that an ill-designed program can turn a laudable idea into a laughing stock.
Filed Under: Economy

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