# Full Employment and Balanced Growth Act of 1978 *Federal statute, Public Law 95-523, 92 Stat. 1887, enacted October 27, 1978* The **Full Employment and Balanced Growth Act of 1978** is a federal statute, Public Law 95-523, 92 Stat. 1887, enacted on October 27, 1978, from House bill H.R. 50 of the 95th Congress.[^1] Federal Reserve History titles its essay on the law with the short name "Humphrey-Hawkins."[^2] The act rewrote the declaration of policy in section 2 of the Employment Act of 1946.[^3] It added numerical goals and timetables for unemployment and inflation.[^4] It also requires the President to set out short-term and medium-term numerical goals each year in the Economic Report.[^5] The Senate Historical Office credits Senator [[Hubert Humphrey]] of [[Minnesota]] with sponsoring the "Humphrey-Hawkins Full Employment bill of 1978."[^6] The same biography records that Humphrey died on January 13, 1978.[^6] The act's enactment date, October 27, 1978, came more than nine months later.[^1] The act's long title states its purpose as to "translate into practical reality the right of all Americans who are able" and willing to work to full opportunity for useful paid employment at fair rates of compensation.[^1] The enacted text makes the "fulfillment of the right to full opportunities for useful paid employment" a national goal.[^3] The same text sets out three limits on that goal: - From the second Economic Report onward, the President may recommend modifying the unemployment timetables.[^4] - "no provisions of such Act or this Act shall be used" to provide for federal control of production, employment, allocation of resources, or wages and prices in the private sector, except where other federal laws authorize it.[^3] - According to Federal Reserve History, Humphrey had proposed government provision of jobs if the goals were not met, and a fifteen-day Federal Reserve response requirement; "Neither proposal passed."[^2] ## Who - The findings and declarations are made in the name of "the Congress." The bill was H.R. 50 of the 95th Congress.[^1] - The statute assigns duties to several officials and bodies: - the President, through the Economic Report and the budget;[^5] - the Secretary of Labor, on differences in unemployment rates between labor-force groups;[^4] - the Board of Governors of the [[Federal Reserve]] System and the Federal Open Market Committee;[^7] - the Council of Economic Advisers.[^1] - Within one year of enactment, the Senate Committee on Human Resources and the House Committee on Education and Labor were each to study establishing a full employment goal and report to their chamber's rules committee.[^8] - The Senate Historical Office gives Humphrey's service as follows: - Senate, 1949 to 1964; - presiding over the Senate as vice president, 1965 to 1969; - Senate again from 1971.[^6] - The same biography records his 1948 speech at the Democratic convention. It also records his work as floor manager of the [[Civil Rights Act of 1964]] with his Republican counterpart, Thomas Kuchel.[^6] ## What - **Findings.** Congress found that the Nation had suffered substantial unemployment and underemployment, high inflation and inadequate productivity growth over prolonged periods.[^9] - The listed costs fall on workers, on business (stated to be especially acute for smaller businesses), on families, and on federal, state and local budgets.[^9] - Congress found that full employment, balanced growth, a balanced federal budget and reasonable price stability are "important national requirements."[^9] - Congress also found that increasing job opportunities and full employment "would greatly contribute to the elimination of discrimination" based on sex, age, race, color, religion, national origin, handicap or other improper factors.[^9] - **Declaration of policy.** Section 102 replaced section 2 of the Employment Act of 1946.[^3] - It places primary emphasis on private employment, in a four-step order of priority: 1. conventional private jobs; 2. private employment through federal assistance; 3. public employment other than under section 206; 4. section 206 methods, only when recommended by the President.[^3] - It states a purpose of relying chiefly on the private sector for new jobs.[^3] - It also states a purpose of encouraging fiscal policies that would hold the federal share of gross national product at the lowest level consistent with national needs.[^3] - **Economic Report.** The President must transmit the Economic Report to Congress during the first twenty days of each regular session.[^5] - The report must contain annual numerical goals for employment, unemployment, production, real income, productivity and prices, covering the current and following calendar years (short-term) and the three succeeding years (medium-term).[^5] - It must also contain employment objectives for subgroups of the labor force named in the statute.[^5] - **Definitions.** The unemployment rate is defined by Bureau of Labor Statistics procedures in effect at enactment. "Inflation" and "reasonable price stability" are defined by the consumer price index.[^5] - **Monetary policy.** Section 108 amended the Federal Reserve Act.[^7] - The Board of Governors must send Congress written reports by February 20 and July 20 each year.[^7] - The reports must set the Board's monetary and credit aggregate plans against the President's short-term goals.[^7] - The Board is not required to achieve those plans if the Board and the Open Market Committee determine "they cannot or should not be achieved because of changing conditions," but it must explain any revisions or deviations.[^7] - **Budget and inflation.** The President's Budget must be consistent with the short-term goals and carry five-year projections of outlays and receipts.[^10] Section 109 states Congress's finding that relying on fiscal or monetary policy alone to fight inflation can worsen both inflation and unemployment. It directs the President to initiate specific anti-inflation policies.[^11] ## When - **October 27, 1978.** The statute bears this date.[^1] GovTrack's bill record and Federal Reserve History both give it as the signing date.[^12][^2] - **January 13, 1978.** Humphrey died, according to the Senate Historical Office.[^6] - **January 1, 1979.** The Federal Reserve reporting amendment took effect.[^7] - **First and second Economic Reports.** The first Economic Report for the act's purposes is the one issued in the first calendar year after enactment. The interim goals run to the fifth calendar year after that report. In the second Economic Report, the President was to review the goals and timetables and report on progress and obstacles.[^4] - **1988.** Once the 3 percent inflation goal is reached, later reports must aim for zero inflation by 1988.[^4] ## Where - A national Employment Conference "may be convened in the District of Columbia." It was to focus on structural unemployment, disadvantaged youth and incentives for private employers to hire the hard-core unemployed.[^13] - Copies of the Economic Report go to the [[governor]] of each State and to other appropriate state and local officials.[^5] - The declaration of policy calls for private investment in depressed urban and rural areas, to reduce high unemployment there.[^3] ## Why - The findings state: "Aggregate monetary and fiscal policies alone have been unable to achieve" full employment, balanced growth, a balanced budget and price stability. They conclude that those policies must be supplemented by other measures.[^9] - Title I states four purposes: - to declare the act's general policies; - to provide an open process for setting economic goals; - to provide for yearly review of national economic policies; - to strengthen and supplement the Employment Act of 1946.[^3] ## How - **Modifying the timetables.** From the second Economic Report, the President may recommend changes to the timetables for the unemployment goals. Congress may then act consistent with title III, which includes a section on modifying the timetable.[^4][^1] - **Differences between groups.** The act provides that "every effort shall be made to reduce those differences" between group unemployment rates and the overall rate that are caused by improper factors.[^4] The Secretary of Labor is to study and recommend remedies in the annual Employment and Training Report.[^4] - **Choice of means.** In pursuing the unemployment and price-stability goals, means that are mutually reinforcing are to be used to the extent practicable.[^10] - **Inflation proviso.** Policies to reduce inflation must be designed so as not to impede the unemployment goals and timetables.[^4] ## How much - The interim goals are unemployment of "not more than 3 per centum" among individuals aged twenty and over, and 4 per centum among those aged sixteen and over. Inflation is to be reduced to "not more than 3 per centum." Both goals run to the fifth calendar year after the first Economic Report.[^4] - Federal Reserve History describes the inflation goal as reaching zero by 1988, "provided that its reduction would not interfere with the employment goal."[^2] - For section 104, "middle-aged and older persons" means individuals forty-five years of age or older.[^4] ## How many - The table of contents lists four preliminary sections and four titles, for 29 sections in all.[^1] | Part | Sections | Count | |---|---|---| | Preliminary | 1–4 | 4 | | Title I | 101–111 | 11 | | Title II | 201–207 | 7 | | Title III | 301–305 | 5 | | Title IV | 401–402 | 2 | - Section 106 lists twelve lettered priority policy areas, (A) through (L), for the President's Budget.[^10] - Section 109 lists eight structural anti-inflation policies the President may use.[^11] - The Economic Report's subgroup objectives name six groups: - youth; - women; - minorities; - handicapped persons; - veterans; - middle-aged and older persons.[^5] ## In the Minnesota record ### Who - Hubert Humphrey represented Minnesota in the Senate from 1949 to 1964 and again from 1971. The Senate Historical Office credits him with sponsoring the Humphrey-Hawkins Full Employment bill of 1978.[^6] ### What - The Economic Report the act requires is to be copied to the governor of each State, including Minnesota's.[^5] - The act's declaration of policy calls for federal cooperation with state and local governments.[^3] Title II includes a section on coordination with state and local government and private-sector economic activity.[^1] ## Notes [^1]: U.S. Congress, *Full Employment and Balanced Growth Act of 1978* (October 27, 1978) — Pub. L. 95-523, 92 Stat. 1887: long title, H.R. 50, short title and table of contents. https://www.govinfo.gov/content/pkg/STATUTE-92/pdf/STATUTE-92-Pg1887.pdf [^2]: Federal Reserve History, *Full Employment and Balanced Growth Act of 1978 (Humphrey-Hawkins)* (n.d.) — enacted targets, October 27, 1978 signing, and Humphrey's unenacted proposals. https://www.federalreservehistory.org/essays/humphrey-hawkins-act [^3]: U.S. Congress, *Full Employment and Balanced Growth Act of 1978* (October 27, 1978) — §§ 101–102, 92 Stat. 1890–1892: Title I purposes and amended section 2 of the Employment Act of 1946. https://www.govinfo.gov/content/pkg/STATUTE-92/pdf/STATUTE-92-Pg1887.pdf [^4]: U.S. Congress, *Full Employment and Balanced Growth Act of 1978* (October 27, 1978) — § 104, 92 Stat. 1893–1895: medium-term goals, timetables, review, group differentials and definitions. https://www.govinfo.gov/content/pkg/STATUTE-92/pdf/STATUTE-92-Pg1887.pdf [^5]: U.S. Congress, *Full Employment and Balanced Growth Act of 1978* (October 27, 1978) — § 103, 92 Stat. 1892–1893: Economic Report, short- and medium-term goals, subgroup objectives, and unemployment and inflation definitions. https://www.govinfo.gov/content/pkg/STATUTE-92/pdf/STATUTE-92-Pg1887.pdf [^6]: U.S. Senate, Senate Historical Office, *Hubert Humphrey: A Featured Biography* (n.d.) — Humphrey's service, sponsorship of the Humphrey-Hawkins bill, and death on January 13, 1978. https://www.senate.gov/senators/FeaturedBios/Featured_Bio_HumphreyHubert.htm [^7]: U.S. Congress, *Full Employment and Balanced Growth Act of 1978* (October 27, 1978) — § 108, 92 Stat. 1897–1898: Federal Reserve reports and the January 1, 1979 effective date. https://www.govinfo.gov/content/pkg/STATUTE-92/pdf/STATUTE-92-Pg1887.pdf [^8]: U.S. Congress, *Full Employment and Balanced Growth Act of 1978* (October 27, 1978) — § 3, 92 Stat. 1889: committee study of a full employment goal. https://www.govinfo.gov/content/pkg/STATUTE-92/pdf/STATUTE-92-Pg1887.pdf [^9]: U.S. Congress, *Full Employment and Balanced Growth Act of 1978* (October 27, 1978) — § 2, 92 Stat. 1888–1889: general findings. https://www.govinfo.gov/content/pkg/STATUTE-92/pdf/STATUTE-92-Pg1887.pdf [^10]: U.S. Congress, *Full Employment and Balanced Growth Act of 1978* (October 27, 1978) — §§ 105–107, 92 Stat. 1895–1897: choice of means, national priority policies (A)–(L), and the President's Budget. https://www.govinfo.gov/content/pkg/STATUTE-92/pdf/STATUTE-92-Pg1887.pdf [^11]: U.S. Congress, *Full Employment and Balanced Growth Act of 1978* (October 27, 1978) — § 109, 92 Stat. 1898–1899: overcoming inflation. https://www.govinfo.gov/content/pkg/STATUTE-92/pdf/STATUTE-92-Pg1887.pdf [^12]: GovTrack, *H.R. 50 (95th Congress)* (n.d.) — bill record: Pub. L. 95-523, signed October 27, 1978. https://www.govtrack.us/congress/bills/95/hr50 [^13]: U.S. Congress, *Full Employment and Balanced Growth Act of 1978* (October 27, 1978) — § 4, 92 Stat. 1889–1890: National Employment Conference. https://www.govinfo.gov/content/pkg/STATUTE-92/pdf/STATUTE-92-Pg1887.pdf