Wednesday, October 16, 2013

The G.I. Bill of Rights, Social Revolution, and the Future

In 1944 Congress passed the Servicemen’s Readjustment Act. It was commonly referred to as the G.I. Bill of Rights, or, more commonly, the G.I. Bill.

"Benefits included low-cost mortgages, low-interest loans to start a business, cash payments of tuition and living expenses to attend college, high school or vocational education, as well as one year of unemployment compensation. It was available to every veteran who had been on active duty during the war years for at least ninety days and had not been dishonorably discharged; combat was not required."

The G.I. Bill is considered as possibly the most effective piece of legislation ever passed by Congress. Ira Katznelson devotes a chapter to it in his book When Affirmative Action Was White. Katznelson’s subject was the systematic way in which New Deal legislation was biased in order to favor whites over minorities in general, and blacks in particular. While the G.I. Bill was unique in being written in a race-neutral manner, its implementation was left to local customs and situations where discrimination was common, particularly in the South, but also in the other parts of the nation. The topic of race-based affirmative action for whites is important and will be discussed in a subsequent post.

Of interest here is Katznelson’s reference to the G.I. Bill as a "social revolution." Political scientists might argue about the application of such a term in this case, but to the uninitiated it seems quite appropriate.

The government faced the prospect of 16 million military personnel returning to a home that no longer existed. They men had been changed by the war experience, and the homeland had also been changed. War had changed the economy and society in so many ways that a social revolution was inevitable. The task for the government was to devise a means whereby the returning soldiers could be accommodated in this new world.

The main features of the law were designed to provide time and resources to help those returning make the transition to civilian life. Katznelson provides this perspective:

"Even today, this legislation, which quickly came to be called the GI Bill of Rights, qualifies as the most wide-ranging set of social benefits ever offered by the federal government in a single comprehensive reached eight of ten men born during the 1920s."

"One by one, family by family, these expenditures transformed the United States by the way they eased the pathway of the soldiers—the generation that was marrying and setting forth into adulthood—returning to civilian life. With the help of the GI Bill, millions bought homes, attended college, started business ventures, and found jobs commensurate with their skills....this legislation created middle class America. No other instrument was nearly as important."

The scale of the investment in human capital is staggering to those accustomed to today’s parsimonious legislators.

"More than 200,000 used the bill’s access to capital to acquire farms and start businesses. Veterans Administration mortgages paid for nearly 5 million new homes. Prior to the Second World War, banks often demanded that buyers pay half in cash and imposed short loan periods, effectively restricting purchase to the upper middle class and upper class. With GI Bill interest rates capped at modest rates, and down payments waived for loans up to thirty years, the potential clientele broadened dramatically."

The government spent more on educating its returning soldiers than it spent on rebuilding devastated Europe.

"By 1950, the federal government had spent more on schooling for veterans than on expenditures for the Marshall Plan....On the eve of the Second World War, some 160,000 Americans were graduating from college each year. By the end of the decade, this number had tripled, to some 500,000. By 1955, about 2,250,000 veterans had participated in higher education. The country gained more than 400,000 engineers, 200,000 teachers, 90,000 scientists, 60,000 doctors, and 22,000 dentists....Another 5,600,000 veterans enrolled in some 10,000 vocational institutions to study a wide array of trades from carpentry to refrigeration, plumbing to electricity, automobile and airplane repair to business training."

"For most returning soldiers, the full range of benefits—the entire cost of tuition plus a living stipend—was relatively easy to obtain...."

The numbers quoted above indicate the scale of the investment in a population that was a bit less than half of the nation’s current population. Another way to examine the immensity of the program is by looking at expenditures.

"By 1948, 15 percent of the federal budget was devoted to the GI Bill...."

Today, 15 percent of the federal budget would amount to about $570 billion per year.

One could summarize the goal of the G.I. Bill as guaranteeing the means for the returning soldiers to develop skills to the limit of their abilities in order to be able to earn a living. Note that popular opinion appended the term "Rights" when referring to the program. That was a noble goal and sentiment then. Why has this sentiment and the concept of a "right" to earn a living been allowed to evaporate rather than be applied to successive generations?

One could argue that the economic situation viewed by young adults today is just as unnerving as that the soldiers would have encountered after World War II without the G.I. Bill. The economy is not providing enough jobs for everyone, and most of the jobs being created are of the low-wage—non-living-wage—variety. It is not the economy returning soldiers faced so many of the actions taken then would not be appropriate today. But surely some action seems to be called for.

The phrase "full employment economy" occasionally emerges in political and economic dialogue as a specific national goal. Over the last several decades economic conditions have changed dramatically. During that period public economic policy has hardly changed at all. We have one political party that is paralyzed by nostalgia for past solutions, and one party that believes the best way to solve a problem is to do nothing.

The nation exited World War II with a more dire debt problem than the one we face today. Yet they managed to fund a very ambitious and very expensive program to revolutionize our society. The return on investment was huge and an age of prosperity ensued.

It is time for another social revolution.

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