Our Purpose
Cementing Full Employment As A Foundational Policy Priority
Employ America was founded in 2019 with a crucial insight: the failure to achieve a robust recovery after the Global Financial Crisis (GFC) stemmed from misidentifying its root causes. While conventional wisdom blamed individual workers—citing everything from skills gaps to drug usage—we identified specific policy and market failures responsible for weak labor market outcomes at the macroeconomic level.
The consequences of these policy failures were devastating and far-reaching. Throughout the 2010s, inadequate macroeconomic policy response led to a "lost decade" for workers and the American economy. Employment was depressed throughout most of the decade, and those who managed to find jobs faced decreased wages. Millions left the labor force altogether. Business closures hollowed out whole industries and regions, diminishing the economy's productive capacity in ways that continue to affect us today. This extended period of weak labor markets didn't just harm workers—it reduced investment, suppressed productivity growth, and scarred the economy's potential.
These outcomes demonstrated the profound importance of maintaining full employment, not just for workers' immediate well-being, but for the economy's long-term productive capacity. This insight shapes our approach: identifying precise micro- and macro-economic mechanisms that shape critical outcomes, allowing us to spot both risks and opportunities before they become apparent in conventional macroeconomic analysis.
When we launched, our goal was to prevent these failures from occurring again and cementing full employment as a foundational economic policy priority. Recessionary and inflationary episodes will still happen from time to time and put full employment outcomes in temporary jeopardy, but we believe policy can do something about it. Leaving acute business cycle risks unattended comes with permanent costs and consequences. Careful, rigorous, and timely policy responses can help us avoid and respond to these risks as they inevitably emerge.
Our Strategic Process
Crafting and advocating for high-impact policies that can be deployed on a dime requires having a strategic process.
Our strategic process begins with producing evidence-driven macroeconomic analysis, built on a nuanced understanding of how data is constructed and flawed. We are also mindful of how specific microeconomic factors can influence macroeconomic outcomes. In other words, we take a thorough look under the hood of the macroeconomic data to see where the strengths, weaknesses, and potential chokepoints may lie.
Our process also entails conducting scenario analysis to prepare for various risks and uncertainties that may emerge. It is not enough to say that an outcome is unlikely. It is essential to think through the most likely pathway to outcomes that are deemed unlikely but nevertheless highly relevant and adverse-similar to a car manufacturer conducting systems and crash safety tests.
Through a more robust approach, we can gauge where the balance of risks currently lie and where they may be headed. Observers of our work have noted our ability to shift gears if shocks and uncertainties hit the economy and change underlying macroeconomic conditions. This has allowed us to tackle various challenges as economic conditions rapidly evolved multiple times since our founding.
From identifying key dynamics and scenarios of macroeconomic significance, we also have to think about policy design across all relevant constraints. In addition to economic constraints, we engage in robust legal analysis to ensure our proposed policies are legally feasible. That means applying a variety of accepted and established approaches to interpreting constitutional, statutory, and regulatory provisions. It also means understanding of how legislative and regulatory processes may shape the range of policy outcomes that can be advocated for. As with all matters of law and policy, legal feasibility considerations also overlap with political constraints and motivations. Robust policy change must command broad support and legitimacy to be successful.
Finally, we socialize our efforts with leading journalists and policymakers to ensure they are informed and equipped to fight the biggest threats to full employment and macroeconomic stability in a timely manner. When we bring forward deeply researched, rigorously constructed policies that align with institutional realities, decision-makers are far more likely to act swiftly and decisively.
Our Results
Before The Pandemic: Securing The Labor Market Recovery
Our initial work focused on a critical challenge: ensuring that the painfully slow recovery from the 2008 recession would continue rather than stall. Even in 2019, a full decade after the crisis, the labor market expansion remained fragile and was frequently underestimated by policymakers. We approached this challenge on two fronts, developing new analytical frameworks while also engaging in specific policy fights to protect the expansion.
Recognizing that the Federal Reserve's implementation of its dual mandate of maximum employment and price stability often failed to properly prioritize labor market conditions, we developed a framework for monetary policy oriented around achieving a robustly defensible pace of gross labor income growth. This framework provided a more comprehensive and timely way to assess labor market health, offering policymakers a clearer strategy for communicating when policy support was mostly needed across a wide range of macroeconomic scenarios, and not merely those of the recent past. This technical innovation in policy measurement represented a fundamental shift in how the institution could fulfill its maximum employment mandate—an early example of how specific mechanical changes could drive broader economic outcomes.
Our analytical approach was relevant later in 2019, when we identified weakening labor market conditions just as employment rates were close to achieving their pre-GFC peaks. This assessment led to successful advocacy for precautionary interest rate cuts, helping to sustain the expansion.
Similarly, we also recognized the stakes of nominating and appointing qualified candidates to the Federal Reserve Board of Governors. While some of the Trump administration’s nominees were highly qualified and committed to the Fed’s dual mandate, such as Jay Powell, Richard Clarida, and Chris Waller, some nominations were more questionable. Herman Cain, Steve Moore, and Judy Shelton were also named, with the latter two going through a more extended nominations process. At a time when most organizations were held captive to a highly polarized political climate, we specifically sought to educate Congressional members on both sides of the aisle so that they understood the issues with these nominations, and the risks at stake. We view it as critical to achieving full employment for there to be a competent, apolitical, and operationally independent Federal Reserve that faithfully seeks to achieve its Congressionally mandated objectives for “maximum employment” and “stable prices.” We carefully analyzed and communicated the implications of past policy positions to the Senate banking Committee and relevant journalists. The Federal Reserve Board and the Federal Open Market Committee would look very different today if those nominations were successful.
During The Pandemic: From Market Mechanics To Macroeconomic Stability
When the COVID-19 pandemic hit, the economic policy community found itself in uncharted territory. Traditional economic models and forecasting tools, built for more conventional business cycles, proved inadequate for understanding an economy experiencing synchronized shutdowns and rapid reopenings. While many economists and policymakers struggled to adapt their frameworks to these unprecedented circumstances, our focus on detailed, data-driven analysis of specific market mechanisms gave us unique insight into emerging economic dynamics.
When the financial phase of the crisis first hit, our experience analyzing specific market mechanisms proved invaluable. Just as we had previously identified how Federal Reserve operational details affected broader employment outcomes, we now spotted how dysfunction in fixed income markets were also showing signs of unearthing much deeper tail risks. Corporate borrowing costs were surging while the municipal bond market echoed the turmoil in early 2009, which likely aggravated the state and local government layoffs we saw in 2010 and 2011. Without the CARES Act enacted yet and the Federal Reserve still unwilling to step in to backstop certain markets, we published pieces and shared memos with Congressional offices demonstrating how the range of existing Fed authorities could be more fully utilized. By showing how these authorities could be utilized, Congressional offices were able to encourage the Fed to work cooperatively towards novel legislative and policy solutions that more directly backstopped these markets. As a result, we saw markets quickly backstopped and avoided a sharper real economic fallout from the financial market turmoil in the spring of 2020.
Our deep knowledge of the Federal Reserve Act and the legislation passed during the 2020 pandemic also allowed us to provide effective oversight of the Federal Reserve and Treasury Department’s actions. When it was proclaimed by the Treasury, with cooperation from the Federal Reserve, that the Fed’s emergency credit facilities could and must be unilaterally closed by the Treasury department, we highlighted how these claims and actions directly contravened the plain meaning of enacted legislation. Congressional offices, once fully educated on the legal context behind these actions, were well-positioned to highlight the legal issues at stake to the Treasury Department and the public. As a result, these facilities were not prematurely closed without first achieving broader legislative consensus on the requisite economic policy response to the pandemic.
As the recovery progressed, we identified another critical mechanism: how the tax treatment of expanded unemployment insurance in the pandemic could potentially serve as a financial burden to millions of Americans. At the time, the US economy was unique in facing substantially more depressed levels of employment. Unlike other economies that chose to maintain existing labor market matches and a high level of employment, the US had accepted a uniquely high level of separations from the pre-pandemic labor market and used the unemployment insurance system as the main safety net mechanism. By educating Congressional offices on how the tax burden would disproportionately affect those who were most acutely affected by the pandemic, a legislative solution was enacted to address this technical issue.
The uniquely depressed levels of employment in the United States did not persist. Not only did employment recover quickly, but the usage of unemployment insurance likely supported greater labor market dynamism. Superior labor market matches appear to be a key reason labor productivity outperformed in the United States, both relative to peer countries and relative to its own long-running trends. While there remain plenty of ways to refine and rationalize future recession responses, there are some clear positive lessons for how to support rapid recoveries and long-term productivity.
After The Pandemic: Tackling New Problems
The post-pandemic period presented entirely new challenges, but our approach of identifying specific mechanisms driving broader outcomes remains a fixture. Our approach allowed us to track and forecast inflation patterns before they became major political and economic issues, demonstrating how careful attention to specific market mechanisms could provide early warning of broader economic developments. When inflation became the primary macroeconomic risk, voices ranging from academic economists to political commentators to even Fed officials argued that the historically low levels of unemployment were to blame for inflation. According to them, unemployment was going to have to rise, perhaps drastically, in order to bring inflation back down. We responded by producing detailed dissections of why those models were wrong, and where policy should be focused on responding.
Employ America was also at the forefront of raising the alarm when, in the fall of 2022, the Fed publish projections signaling their intention to catalyze a recessionary rise in unemployment to fight inflation. We briefed legislators and journalists on how to challenge the Fed on their projections and their implicit assumptions. We also challenged conventional wisdom by showing how specific supply chain constraints—in semiconductors, housing, port capacity, and other infrastructure—were driving broader inflation pressures, and if given a chance to unwind, could substantially lower inflation with no adverse impact to unemployment. As it would turn out, the disinflation of 2023 and 2024 coincided not only with strong employment outcomes, but also abnormally strong productivity and real GDP growth. The supply side was evidently a substantial part of the inflationary surge, and more than the Fed had expected in late 2022. By late 2023, the Fed formally acknowledged that a recessionary rise in unemployment was indeed not necessary for bringing inflation closer to the Fed’s target.
Our detailed analysis of the semiconductor shortage proved particularly influential: by mapping how specific features of semiconductor manufacturing and supply chains contributed to both immediate shortages and longer-term economic vulnerabilities, we helped shape discussions that ultimately led to the CHIPS Act. This legislation represented a significant shift in U.S. policy, providing support for domestic semiconductor production to address both immediate supply constraints and long-term strategic concerns. This work, along with our broader supply chain analysis, demonstrated again how understanding specific market mechanisms could inform policies that addressed both immediate economic pressures and structural challenges. This analysis, reminiscent of our earlier work identifying specific market mechanisms, led to the development of targeted anti-inflation policies that didn't rely on raising unemployment.
As the labor market recovery coming out of the pandemic started to look stronger than most had anticipated, we started to become worried about upside risk to oil prices due to oil price crashes clobbering oil investment during the pandemic, so we applied our market analysis capabilities—already developed during our Federal Reserve 13(3) crisis facility work—to energy markets. By mapping the specific mechanics of oil markets and the main drivers of marginal investment behavior, we started to map various policy responses that would address the actual constraint to more investment in domestic oil production. Then, in early 2022, Russia invaded Ukraine, which led to a major global energy and commodity shock–sending oil and gas prices soaring. Unlike convenient partisan narratives, we focus on trying to develop rational explanations for firm- and industry-level behavior, and it became clear that investors were spooked by the volatility risk that materialized over the prior decade.
We developed a policy solution aimed at delivering certainty to producers in downside scenarios through the Strategic Petroleum Reserve’s existing statutory authorities. We advised the White House National Economic Council (NEC), the White House National Security Council (NSC) and the Department of Energy (DOE) on how our proposed solution could both relieve immediate price pressures and strengthen incentives for future investment and production. The plan entailed releasing barrels of oil from the SPR, at the time trading at triple digit figures, to relieve upward pressure on spot oil and gasoline prices, while contractually committing to replenish the SPR in the future at a lower price than spot but still high enough for producers to invest today.
Implementation of our preferred policy solution took time and many iterations, but we managed to successfully advocate for the DOE to successfully execute repurchase contracts averaging roughly $70-$79 per barrel, a win for domestic energy security. The Congressional authorities for the Department of Energy to steward the SPR in a manner that protected producers from financially debilitating downside risk scenarios had long existed, but it took our policy advocacy for the DOE to consider revising its SPR regulations to ensure greater alignment with Congressional goals. With the funds that the DOE had available to it, they fully allocated those funds to refilling the SPR. Going forward, we see this episode as a clear example of how supply-side stabilization policy tools can work, and will highlight that Congress can do more to help and less to harm the long-term viability of the SPR.
Our Future
Employ America’s track record has been based on a consistent approach: identifying specific economic mechanisms, developing targeted policy solutions, and advocating effectively for their implementation. Our methodology has delivered remarkable results—from the fastest labor market recovery in American history to successful stabilization of energy markets during international crises.
The pandemic years have conclusively demonstrated that full employment is not only possible but essential for a thriving economy. When conventional wisdom predicted a slow, painful recovery, our targeted interventions helped achieve historic employment gains. Similarly, our work during the inflation challenges of 2022-2023 proved that price stability need not come at the cost of jobs, as we showed how sector-specific supply constraints—not excessive employment—were driving price pressures.
Looking ahead, Employ America is expanding our framework to address three interconnected challenges: sustaining full employment, preventing shortages and inflation, and accelerating investment and productivity. This approach recognizes these goals as mutually reinforcing rather than competing. Full employment drives business investment in productivity-enhancing technologies, which allows wages to rise without triggering inflation, while targeted policies to prevent shortages ensure growth doesn't create its own constraints.
The disruption of recent years has yielded valuable lessons about what's possible when economic policy is guided by evidence rather than outdated conventions. As new challenges emerge—from energy transition to geopolitical tensions—our proven methodology will remain our foundation for creating an economy that delivers sustained prosperity, maintains price stability, and enhances productive capacity simultaneously. The future of American prosperity depends on applying these lessons thoughtfully and maintaining our commitment to policies that benefit all Americans.
