Friday, January 13, 2012

What are the lessons of CETA? (a 1973 US jobs program)

Last May I ran into a reference to a jobs program started in 1973 called CETA (Comprehensive Employment and Training Act) that at its peak employed more than 700,000 people. At the time I searched the major MMT blogs as well as the papers I could find on Job Guarantee / Employer of Last Resort policy and implementations, and I didn't find any discussion of it. I posted comments asking about it on a couple major MMT blogs, but no one weighed in at the time. It occurred to me given the recent JG discussions to ask again, and a search in my feed reader hasn't uncovered any new references to it. (Disclaimer: my lack of results could be entirely my failure to search thoroughly enough.)
Overview from wikipedia: “a United States federal law enacted in 1973 to train workers and provide them with jobs in the public service… The program offered work to those with low incomes and the long term unemployed… The intent was to impart a marketable skill that would allow participants to move to an unsubsidized job. It was an extension of the Works Progress Administration program from the 1930s. The Act was intended to decentralize control of federally controlled job training programs, giving more power to the individual state governments.”

An opinion writer at politicsdaily that had came up in my quick search results said: “That was the crux of the policy dilemma: The voters did not want make-work and the unions did not want real work.” And, “CETA employees did perform useful work — from asbestos removal to assisting in libraries and senior citizen centers.” And, “Following the questionable gospel that state and local governments always know best, CETA programs were decentralized.” And, “But the problem with CETA was not that it embodied Big Government, but that it was not big enough.”

The program sounds like it shares a number of characteristics with the Job Guarantee as proposed by primary MMT authors, and it's more recent than the Great Depression work programs that people often mention in comments. So, what did it do right? What did it do wrong? What are the lessons learned? Why is it not being used as an example in these discussions, or mentioned by primary MMT authors? (Perhaps it has been and I've just missed it). Was it successful for its size (despite not being an unlimited offer of work positions at the policy wage, as proposed under a JG) but just not big enough to matter? Were there major unintended consequences that weren't addressed? Was it ultimately sabotaged on ideological grounds by free market fundamentalists? Did the voters and the unions reject it on the grounds quoted above? Anyone know or have useful links that I've overlooked?

UPDATE 1/15/2012: Corrected the first paragraph. It had falsely referenced Jimmy Carter as associated with the start of this program (either I mangled the notes I took a year ago or the original source I found was wrong -- I should have caught that presidential year mistake -- oops!)


  1. Here is the 1982 CBO study of CETA - Ceta Training Programs: Do They Work For Adults? put out under the watch of Alice Rivlin.

    The entire report is available only as a scanned pdf.

  2. I mentioned CETA here:

    But you are right: CETA and numerous other job or work creation systems over the last century and before are not often mentioned by MMTers because many of them have not read up the history. I.e. there is a lot of “re-inventing the wheel” included in this debate.

    I’ve got two books that give some info on CETA (see below). These books devote only a few pages to CETA. Having quickly skimmed thru the relevant pages, the consensus seems to be that the main fault with CETA was thus. It was supposed to employ the disadvantaged. However, it concentrated on creating subsidised jobs in the PUBLIC SECTOR, and (as I’ve said time and again in my own blog posts) the public sector is not good at employing the less skilled. The result was that CETA seems to have “created” jobs for people who would have found work anyway. And of course it provided the relevant employers with a source of cheap labour.

    There WAS an attempt to reduce the latter problem by limiting the CETA subsidy to one year per person. But personally I think that is far too long a period. I suggested a couple of months for this sort of subsidy time limit in a recent blog post:

    Two books:

    “Full Employment and Public Policy: The United States and Sweden” by Helen Ginsburg, published by Lexington Books, Mass.

    “Creating Jobs”, editor: J.L.Palmer, published by the Brookings Institution.

  3. Thanks Clonal and Ralph! I'll dig a bit into these summaries when I get a chance.

    Ralph, I wonder whether the academic MMTers at least really have not read up on this history??? Yet I really was surprised not to find mentions of CETA in the literature by them that I could find. Thanks for your thoughts on it -- I'll be sure to add your blog to my reader.

  4. I'm glad i did find your article. Very often I wonder what happened with that program. I'm product of CEtA, they paid for my computer technology classes,I believed they invested around $10,000.00 in my training,after I did completed the training in 1976 I begun to work for a big corporation and I still working in the same field . That means so far I paid back their investment for many years. I hope the goverment start that kind of program again.