Government Job Creation Programs-Lessons from the 1930s and 1940s
Long, Jennifer, Journal of Economic Issues
The recent period of relative full employment has diverted the attention of the public, and of economists, from the problems associated with providing enough quality jobs for those who want and need them. But the disappearance of manufacturing jobs and the growth of relatively low-paying, less secure service sector employment has caused much concern about the quality of the jobs currently being created [see, for example, Bluestone and Harrison 1982; Burtless 1990; Lerner 1994; Loveman and Tilly 1988]. An important facet of this apparent full employment composed of arguably worse jobs is that it has facilitated the replacement of welfare with workfare without a need for government-sponsored job creation.  However, in the debates leading up to the Clinton administration's changes in the welfare programs, and in the literature concerned with the maintenance of full employment across the business cycle, there has been considerable discussion of ways in which the number of jobs can be expanded [see Wray 1998; Gordon 1997].
In this paper, I begin with the assumption that the recent changes in welfare policy, accompanied by the public sentiment that all able-bodied, non-retired adults work in paid employment, will at some point in the future meet the reality of the business cycle and produce a revived interest in how new jobs can be created. It is also reasonable to assume that federal, state, and local governments will need to be involved in that process of job creation. In this paper, I conclude that public acceptance of such government job programs--and thus their success--will depend on the reconciling of the economic need for employment with the need for employment that meets social definitions of proper work. The process of job creation through government programs as it happened some 60 years ago illustrates this connection between public perception of the created jobs and the programs' success.
All three of the government programs discussed here--the Tennessee Valley Authority, the relief programs of the New Deal such as the Works Progress Administration, and the Oak Ridge nuclear weapons complex--succeeded in employing people. All did not succeed, however, in attaining the same level of public acceptance. Three factors specifically influenced the perceived success or failure of the job creation programs: the levels of government intervention in the programs; the scope of the projects; and social hierarchies of work, including ideas about gender-and race-appropriate jobs. Programs that succeeded were those with a scope of purpose that helped people overlook their distrust of government involvement in the economy and that created jobs appropriate for the workers according to the social dictates of the day. The programs that did not do this met with less enthusiastic public response.
The Case Study: Knoxville, Tennessee, in the Great Depression
Knoxville, a mid-sized Appalachian city that serves as a regional hub, offers examples of infusions of government money on a large scale that resulted in both direct and indirect employment creation. Direct employment relief came with the New Deal in the 1930s, especially with the Works Progress Administration (WPA). Indirect employment came with expenditures for the Tennessee Valley Authority (TVA) and, about 10 years later, for the nuclear weapons facilities at Oak Ridge. The interesting story is not so much the different levels of employment that resulted from the government programs, but the differing social responses to the programs.
The depression brought unemployment and economic misery to Knoxville, as it did to the rest of the nation. Factory closings hit the city hard, adding to the problems of the manufacturing sector that had been in decline since the 1920s.  At the onset of the depression, 32 percent  of the city's work force was still employed in low-grade manufacturing that was sensitive to cyclical activity in the economy [McDonald and Wheeler 1983, 62]. …