An Employment Director Who Failed-And Lessons For California Today

Michael Bernick
Counsel with the international law firm of Duane Morris LLP, a Milken Institute Fellow and former Director of the California Employment Development Department

In the Spring of 1975 as a graduate student at Oxford University, I took the train to London one Saturday to attend a session of national Labor Party officials. Michael Foot, was the national Employment Secretary at the time in the Labor government of Harold Wilson, and one of the main speakers.

I thought of this Saturday long ago as I read that Michael Foot died Wednesday at the age of 96. I don’t recall anything of that session other than Foot’s oratory. He was a brilliant orator, as even his many opponents in the Labor Party, such as Dennis Healy, acknowledged. At one point in he declaimed of an initiative he regarded as misdirected, “Do men gather grapes of thorns or figs of thistles”. Indeed.

Foot had a lengthy career in government and politics, starting in 1934 when he joined the Labor Party. He served in Parliament from 1945 to 1955, and later from 1960 through 1992. He actually led the Labor Party from 1980 through 1983, when he lost in a landslide to Margaret Thatcher and was replaced by Neil Kinnock.

Foot is most relevant here at Fox and Hounds for the lessons of his time as Employment Secretary. Employment in Great Britain did not decrease during his time as Employment Secretary from 1974 through 1976, and subsequent time as Deputy Leader of the Labor Party from 1976 through 1980 and the government of James Callaghan. Instead, unemployment increased from 2.6% in 1974 to 5.6% in 1976, rising to 7.3% in 1980.

Foot came in as Employment Secretary at a time when globalization was gaining steam and the large traditional manufacturing and mining industries were under attack and finding themselves no longer competitive on the world market. Foot’s response was to try to prop up these industries with government subsidies, as well as to expand the unemployment insurance system.

It did not work. Great Britain did not succeed in isolating itself from the world economy, and these industries were not able to remain immune from productivity gains in other countries. Unemployment rose even before Ms. Thatcher gained office in 1980, and then increased more dramatically during the 1980s, as the government subsidies were withdrawn. The safety net of unemployment insurance did not lead to a population content to live on the dole. Instead, it predictably led to a range of social unrest and community disintegration that continues to plague regions of Northern England to the present. In the name of helping workers, Michael Foot put forward policies that stymied worker progress.

Michael Foot never altered his views on employment over the next 30 years, just as he kept to his views on nuclear disarmament and nationalization of industries. The rest of us, though, cannot be stuck in 1934, if we want to truly attack the north-of-20% unemployment/underemployment that continues to characterize California’s economy.

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