Unemployment in Recessions

December 16, 1970

Report Outline
Mounting Concern Over Unemployment
Recurrent Joblessness and Federal Action
Outlook for Achieving Full Employment
Special Focus

Mounting Concern Over Unemployment

Shift in Nixon ‘Game Plan’ to Job Problems

Unemployment overtook inflation as the most serious domestic issue facing the Nixon administration as 1970 drew to a close. Economic observers noted a basic shift in policy in a speech the President delivered to the National Association of Manufacturers in New York on Dec. 4. While not abandoning the battle against inflation, Nixon's emphasis was on measures to stimulate the economy enough to roll back unemployment—then standing at the highest level in more than seven years. During November, 4.8 million Americans were out of work, about two million more than a year earlier. One worker in 17 was out of a job, compared with one in 30 when Nixon came into office in 1969.

Furthermore, the quality of unemployment in 1970 was disturbingly different from that experienced in four previous recessions since World War II. For the first time, large numbers of white-collar workers, highly skilled technicians, and even managers and scientists were being thrown out of work. And despite month-over-month increases in the unemployment rate, inflation was persisting. Arthur F. Burns, chairman of the Federal Reserve Board, raised the question in a speech at Pepper-dine College in Los Angeles on the same night Nixon was speaking in New York. Burns said it was important for the country to understand that “we are dealing, practically speaking, with a new problem—namely, persistent inflation in the face of substantial unemployment—and that the classical remedies may not work well enough.”

As most analysts saw it, the rising tide of joblessness had forced a change in Nixon's “game plan” for the economy. This term, appropriated from football, was used to describe a classical program of economic restraint involving (1) stringent control over expenditures, (2) maintenance of tax revenues and (3) a restrictive monetary policy. These actions, taken at the outset of Nixon's administration, were designed to moderate the rise in prices and permit the return to a more stable rate of growth by mid-1972.

ISSUE TRACKER for Related Reports
Mar. 06, 2020  Universal Basic Income
Mar. 18, 2016  The Gig Economy
Mar. 06, 2012  Youth Unemployment
Jul. 31, 2009  Straining the Safety Net
Apr. 10, 2009  Business Bankruptcy
Mar. 13, 2009  Vanishing Jobs
Apr. 25, 2003  Unemployment Benefits
Jan. 21, 1994  Worker Retraining
Sep. 09, 1988  Help Wanted: Why Jobs Are Hard to Fill
Mar. 18, 1983  The Youth Unemployment Puzzle
Dec. 24, 1982  Federal Jobs Programs
May 28, 1982  America's Employment Outlook
Jun. 27, 1980  Unemployment Compensation
Oct. 14, 1977  Youth Unemployment
Jul. 11, 1975  Underemployment in America
Dec. 16, 1970  Unemployment in Recessions
Mar. 05, 1965  Unemployment Benefits in Times of Prosperity
Apr. 03, 1964  Overtime Pay Rates and Unemployment
Feb. 01, 1961  Unemployment and New Jobs
Jan. 07, 1959  Lag in Employment
Apr. 16, 1958  Emergency Jobless Aid
May 16, 1956  Lay-Off Pay Plans
Nov. 12, 1953  Jobless Compensation in Boom and Recession
Feb. 25, 1949  Defenses Against Unemployment
Jul. 30, 1945  Full Employment
Nov. 25, 1940  Unemployment Compensation
Jul. 10, 1939  Problem of the Migrant Unemployed
May 19, 1936  Unemployment and Recovery
Sep. 02, 1931  Public Employment Exchanges
Aug. 19, 1929  The Stabilization of Employment
Feb. 21, 1928  The Employment Situation in the United States
Jan. 23, 1926  Unemployment Insurance in the United States
Economic Analyses, Forecasts, and Statistics
Economic Crises
Unemployment and Employment Programs