The Full Employment and Balanced Growth Act (known informally as the Humphrey–Hawkins Full Employment Act) is an act of legislation by the United States government.
Impetus and strategy
Unemployment and inflation levels began to rise in the early 1970s, reviving fears of an economic recession. In the past, the country's economic policy had been defined by the Employment Act of 1946, which encouraged the federal government to pursue "maximum employment, production, and purchasing power" by cooperation with private enterprise. Some Representatives, dissatisfied with the vague wording of this act, sought to create an amendment that would strengthen and clarify the country's economic policy.
The Act's sponsors embraced a form of Keynesian economics, advocating public intervention to increase economic demand and to secure full employment. Economists in the Carter administration, in particular the Council of Economic Advisers, pushed for an inflation target in the bill. The economists made references to the Phillips curve, arguing that there was a trade-off between unemployment and inflation.