H.R. 870, “The Humphrey-Hawkins 21^st Century Full Employment and Training Act”

Summary

Representative Conyers has introduced legislation that is tailored to fit our current economic realities, but which also embodies the spirit of the original Humphrey-Hawkins “Full Employment and Balanced Growth Act:” the “21^st Century Full Employment and Training Act.”  The Act aims to provide a job to any American that seeks work and to, ultimately, create a full employment society. 

·         The Act establishes of a “Full Employment and Training Trust Fund” with two separate accounts.  These two accounts will direct funding to job creation and training programs.

·         If at the beginning of each fiscal year, the Chairman of the Federal Reserve determines that the economy is not operating at a level of full employment, 90 percent of the funds in each account will be automatically disbursed.  

·         67 percent of all revenues deposited into the trust fund will accrue in the job creation grant program account and 33 percent of the total funds will accrue in the job training account.       

Dual Job Creation Focus: Direct Jobs Grants and WIA Training Programs

·         The first trust fund account will direct funds to a new innovative direct jobs program.  Funds will be distributed by formula through the Department of Labor to larger cities, and to states to be passed through to smaller localities and rural areas.

o   The program would allocate funds based on the CDBG formula modified to consider unemployment data. Local elected officials who are closest to our communities and needs on the ground would work with community groups and labor leaders to identify critical projects and connect workers to projects right away.

o   Jobs could be located in the public sector, community-based not-for-profit organizations, and small businesses that provide community benefits.

o   The Program will adopt a two stage approach to ensure immediate job creation and allow for a longer term planning process that involves community input and a focus on education and career development.

o   The program will be open to individuals who are either:

§  Unemployed for at least 26 weeks; or

§  Unemployed for at least 30 days and low-income.

o   Positions will be for up to 30 hours per week, for at least 12 months. They will pay comparable or prevailing wages, averaging $12-15 per hour, as well as benefits.  Appropriate safeguards and strong anti-displacement protections will help to prevent substitution and ensure that workers are placed in new positions.

·         The second trust fund will distribute funds to job training programs covered under the Workforce Investment Act.

o   These funds will fund innovative job training initiatives including 1-Stop Job Training Programs and the Job Corps.    

Revenue: Taxing Wall Street Speculation to Pay for Main Street Jobs

·         Revenue for the trust fund will be raised through a tax on Wall Street financial speculation, i.e. on stock and bond transactions.    The financial transactions tax will cover:

o    Stock transactions (tax rate will be 1/4 of 1 percent--0.25%),

o   Futures contracts to buy or sell a specified commodity of standardized quality at a certain date in the future, at a market determined price (tax rate will be 0.02%),

o   Swaps between two firms on certain benefits of one party's financial instrument for those of the other party's financial instrument (tax rate will be 0.02%)

o   Credit default swaps where a contract is swapped through a series of payments in exchange for a payoff if a credit instrument (typically a bond or loan) goes into default (fails to pay) (tax rate will be 0.02%),

o   And options, which are contracts between a buyer and a seller that gives the buyer the right, but not the obligation, to buy or to sell a particular asset on or before the option's expiration time, at an agreed price (at the rate of the underlying asset). 

For additional information, please contact Michael Darner on my staff at 202.225.5126 or michael.darner@mail.house.gov.

The Shortening Hours and Retaining Employees (SHARE) Credit Act

• The SHARE Act proposes that the United States dramatically expand a proven job creation tax proposal: paying employers to shorten employee hours in order to promote new hiring. 

• The SHARE ACT will be a tax credit to employers. The government can give employers a tax credit of up to $3,000 to shorten their workers’ hours while leaving their pay unchanged. The reduction in hours can take the form of paid sick days, paid family leave, shorter workweeks or longer vacations. The employer can choose the method that is best for her workers and the workplace.

• If take-home pay is left unchanged as a result of the credit, then demand should be left unchanged. If workers are putting in fewer hours and demand is unchanged, then employers will need to hire more workers.

• This logic is as simple as it gets. The process is also quick and cheap. In principle, the government can go this route to save jobs at a cost of a bit more than $20,000 per job - far less than the cost per job saved through the stimulus package.

• Germany has used this policy to keep its unemployment rate at 7.6 percent, about the same as it was before the recession. Imagine if workers in the United States, like workers in Germany, were dealing with the recession by putting in four-day weeks (while getting paid for five) or getting an extra two weeks of paid vacation. This sure beats being unemployed.

• In addition to putting millions of Americans to work, the SHARE Credit Act will enable workers to spend more time with their families and in their communities through extended paid vacations, additional sick days, and shorter work weeks. 

• This idea has been vetted by the best economic minds.  It originally came from Dean Baker of the Center for Economic and Policy Priorities and has been supported by Nobel Prize-winning economist and New York Times columnist Paul Krugman.