of PWA construction against the CWA’s sterling track record of a large “number of employed” compared to “wages earned [and] … costs of materials.”104 Finally, Ross argued that studies of “the present operations of each of the following agencies” would be necessary “to arrive at a judgment as to their relationships with the new program” of direct job creation. Ross believed that these studies would lend weight to his proposal to establish a permanent Public Welfare Department that would unify all aspects of direct job creation, including under one roof offshoot programs such as the CCC or placement bureaus such as the United States Employment Service.105
Naturally, these two research agendas collided. Ross wrote to Witte, arguing, “I think it would be useful to study the methods by which other countries have met the unemployment problem as a whole rather than simply by variations in unemployment insurance.”106 Ross thus positioned FERA on the side of all those policy advocates whom Witte was attempting to exclude from research funding and policy discussions, thus building valuable goodwill for FERA among the members of the Technical Board and advisory committees from organizations outside of the Labor Department—the raw material for future alliances.107
Ross increased the pressure by also insisting on more FERA research projects, arguing that “work programs should be incorporated in addition to social insurance measures” in CES research.108 “Equal time” demands won space for some fifteen reports on direct job creation.109 This was far and away the largest amount of research done by any noninsurance group. By contrast, Children’s Bureau advocates and health insurance advocates only managed to include three reports on their respective policies in the CES’s research program.110 Insofar as reports can be used as proxies for the overall flow of argument within the CES (as official minutes tended to report only final decisions, with little mention of deliberations), direct job creation advocates succeeded in maintaining a significant place in the conversation despite opposition.
Witte’s hostility may well have been exacerbated by efforts of direct job creation advocates to borrow ideas and rhetoric from other groups on the committee. In a proposal titled “A Public Work Program as a Means of Economic Security,” submitted as part of the first round of reports, Ross presented a system of direct job creation that focused on UI’s shortcomings. “Any work program that may be devised must of necessity be more comprehensive than a program of unemployment insurance,” he recommended, at least in part because “the work program would provide for those not covered by the unemployment insurance plan” in light of its stringent eligibility standards.111 Ross joined this emphasis on universality (which appealed to advocates for more universal social insurance programs like the Ohio plan) with arguments that would appeal to the more conservative members of the committee: work projects like roads, schools, and bridges would ensure that the New Deal’s program for the unemployed would return some value to the taxpayer.112
Ross appealed to the members of the “spending caucus” by relying on purchasing power theory. Demand stimulation was important to their analysis of the Depression and he found a way to incorporate it into the direct job creation agenda. His comments about eligibility pressed on the biggest weakness of the UI approach: its failure to provide economic security to blacks, women, the long-term unemployed, and all other workers not covered due to industry or firm size. Job creation was open and hence it appealed to critics of the Wisconsin plan, to social workers, and to labor unionists.113 Most trenchant, Ross pointed to the resonance of jobs in shaping public opinion: UI offered a dole in a political culture dismissive of “handouts,” whereas direct job creation offered work, which would be viewed more favorably by citizens. Social science surveys and FERA interviews provided ample support for the notion that the poor themselves were mainstream believers in the value of work over relief. As part of this rhetorical shift, Ross also sought to distance direct job creation from poor relief by gradually changing terminology, from “relief” to “work relief” to “public employment program” to “work program.” Each step emphasized work more and public relief less.
What were the methods proposed for developing a system of government job creation? The ones under consideration borrowed from social insurance proposals developed by Witte and his fellow Wisconsinites, but they sharply constrained the importance of UI in the CES’s program. The first plan “involves the use of contributions for protections against unemployment for a work program—employment not restricted to those making the payments. This conception regards the funds collected as an additional source of revenue collected and is based on the belief that employees will willingly make payments in return for the protection offered them by a large work program when unemployed.”114 This language borrows directly from social insurance rhetoric. Establishing a contributory basis for direct job creation but not limiting funding or eligibility to those contributing, maximized direct job creation’s fiscal flexibility (and rendered it more open to disadvantaged groups) by giving it a source of funds free from congressional interference, while also keeping the door open to general funds. More important, this option diminished the relevance of UI by establishing an independent system that would be more generous in benefits and duration, in a form preferable to the partial wage replacement characteristic of social insurance, and open to more people than UI (especially agricultural and domestic workers). If such a system were to pass into law, UI experts would find it very difficult to justify an additional payroll tax and an additional bureaucracy designed to provide a less popular benefit. At best, UI would find itself a small, complementary program, if it passed Congress at all.
The second plan put forward by Ross was equally bold. It contemplated “wages on a work program as a means of paying all unemployment benefits.”115 (In other words, while a UI system would still exist for the purposes of collecting taxes and tracking benefits, the actual payoff of those benefits would be done through a work program.) As in the first option, work would become the dominant form of public provision against destitution, guaranteed as “a matter of contractual right to … wages paid for work performed.”116 Once again, one sees the combination of social insurance terminology with a focus on work as the primary mechanism—showing a willingness to appropriate the intellectual clothing of FERA’s rivals. The threat in this option was that, in addition to undermining the cash benefit basis of insurance, direct job creation officials would oust social insurance officials as the primary contact for beneficiaries. Direct job creation administrators would establish their own personnel as the primary contact with almost the entire workforce, ready to link up with clients and congressmen to protect the system politically. To hammer the final nail in the coffin, FERA agencies would maintain budgetary authority over the reserves. “The cost of the work program [for the individual worker] would first be supported by payroll contributions [made by all workers] and at the expiration of the benefit would be supported by public [general taxation] funds,” thus maintaining funding flexibility.117
The third option was something of an olive branch to UI advocates like Witte, especially compared to the previous two. Here UI and direct job creation would remain separate programs: one funded by payroll taxes, the other by “public funds,” thus eliminating any fiscal or programmatic overlap. However, the two programs would cooperate to provide longer and more generous provision of unemployment benefits by “delaying the employee’s eligibility for the work program until after the right to cash benefits under an unemployment insurance scheme becomes exhausted.”118 This setup offered certain advantages from Witte’s perspective. It moderated the UI system’s relatively stingy provision of benefits, while letting the system off the hook for long-term payouts. It counteracted the perception of social insurance as a dole by tying cash benefits to work. Finally, it provided for “workers not covered under unemployment insurance,” a priority for liberals within both the CES and Congress, without having to directly challenge the Southern congressional caucus on the issue of agricultural and domestic workers.
Taken together, these three options—wherein work programs could either replace UI entirely or work alongside it—thus served as ammunition for the battle surrounding the first round of reports by the Technical Board and the Executive Staff. Over at
