Connecting state and local government leaders
An old idea for preventing poverty and fighting recessions is gaining traction once again.
Should Uncle Sam give a job to every American who wants one? That question feels awfully theoretical, given the slate of dramatic spending cuts pending in the Republican-controlled Congress. Still, it is one that Democrats are starting to ask.
The policy proposal is called a jobs guarantee, and the Center for American Progress—arguably the most influential think tank on the mainstream left—is officially pushing it as of this week. In a new report, CAP calls for a “Marshall Plan for America” to “counter the effects of reduced bargaining power, technical change, globalization, and the Great Recession.” With wages stagnant, the middle class shrinking, and workers without college degrees falling behind, the government should engage in massive infrastructure investment and start a public-employment program, the report argues.
The specific aim of the proposal is to boost the employment rate for prime-age workers without a college diploma, and to keep it high. Right now, that would mean creating more than 4 million jobs—a number that would surge during a recession. Assuming that those jobs would pay $15 an hour plus benefits, the program would currently cost something like $158 billion a year—again, a number that would surge during a recession. “This is approximately one-quarter of Trump’s proposed tax cut for the wealthy on an annual basis,” the report notes.
For that kind of money, the government would pull millions of families out of poverty, proponents of guaranteed-jobs programs argue. It would push up the wages of workers with private-sector jobs by creating a hotter labor market overall. It would address income stagnation and the decline of the middle class. It would improve and expand public services. Rural America would get a boost, and the government would have a strong standing measure to counter recessions and end long-term unemployment.
Of course, there might be less salutary effects as well, and the CAP proposal leaves a number of questions unanswered. For example, the report suggests turning the current pool of unemployed, displaced, and discouraged workers into teachers’ aides, EMTs, and elder-care assistants. But those are jobs that require a considerable amount of training and skill, and are generally long-term careers rather than temporary gigs. They might not be the right ones for a public-jobs program aimed at disaffected workers, in other words. Moreover, those would not be easy job categories to expand in the event of a recession. Demand for health-, elder-, and child-care workers is mostly based on the country’s demography, after all, and again, those jobs require training. Supplying streets with crossing guards, cleaning up highways and national parks: Those more menial tasks might be better suited for a public jobs program, but are not mentioned.
On top of that, the report seems to underestimate the cost of overhead and infrastructure—the program would need to be physically present in every zip code of this vast country, and the Washington has not run anything like this since the Great Depression. The fact that most government-sponsored worker-retraining programs perform abysmally goes unmentioned, too.
The money might be better spent on a combination of targeted help for the long-term jobless, targeted help for distressed communities, targeted help for displaced workers, and targeted help to connect young people to the labor force, along with policies like infrastructure investment and expanded labor protections. But the report does not break out an estimated dollar-for-dollar impact of a jobs guarantee, or competing proposals. Moreover, it does not discuss how a jobs guarantee might change the Federal Reserve’s mandate to seek maximum employment along with price stability. (One question: Would the Fed allow higher interest rates that would cool off private-employment growth in a world with a jobs guarantee?)
But rather than critique the idea’s policy merits, perhaps it makes more sense to look at the CAP proposal in political terms: another sign that Democrats are moving to the left, not the center, and thinking big, not small. Proposals like a jobs guarantee, Representative Ro Khanna’s $1 trillion expansion of the Earned Income Tax Credit, and the increasingly popular universal basic income might appeal not just to the Bernie Sanders left, but also to Trump voters who felt abandoned and unmoored during the Obama years, the thinking goes. The rise of populist movements and the shrinking of the middle class—with all the economic pain and political turbulence that comes with that—seems to have increased the appetite of both parties for dramatic proposals.
As such, even before the CAP proposal had come out, the idea of a jobs guarantee had been gaining traction on the left. The economists and public intellectuals William Darity of Duke University and Darrick Hamilton of the New School have been pushing for a federal jobs guarantee, for instance, in part to ease the country’s profound racial disparities and to act as a more effective recession-fighting measure than unemployment insurance. The European Union recently implemented a youth-guarantee initiative to reduce the number of young people “not in employment, education, or training,” often referred to as “NEETs.”
The idea itself is a very old one, with proposals for it extending back for hundreds of years. A number of Renaissance humanists pushed cities to provide work for the impoverished, for instance. Here in the United States, during the Great Depression, Huey Long argued for confiscating fortunes and incomes above a certain limit and using the money to ensure every American had work. With World War II raging, President Franklin D. Roosevelt called for a “second bill of rights,” including a jobs guarantee. “People who are hungry and out of a job are the stuff of which dictatorships are made,” he said. Martin Luther King Jr. famously supported one too. “We must develop a federal program of public works, retraining, and jobs for all, so that none, white or black, will have cause to feel threatened,” he said.
Even with mainstream Democrats starting to support a jobs guarantee, such a proposal still might feel airy to consider at the moment. But after another recession, another lost decade, another jobless recovery, the left seems to be betting, it might not.