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Radical or Reasonable? The Case for a Federal Jobs Guarantee

The state of the union is in crisis, and a federal jobs guarantee is part of the solution. While it is easy to accept complacency, the American economy has reached a point of decay at which inaction can only be considered cruel and ignorant. Infrastructure is crumbling; income inequality is the highest it has been in half a century; all-powerful corporations prioritize profits over people; and civil unrest is at a boiling point. As Covid-19 continues to ravage the American population, it is time to seriously consider a federal jobs guarantee as both a mechanism for general welfare and socially conscious economic efficiency.

Now, what is a federal jobs guarantee (FJG)? In essence, each and every American is guaranteed a job managed by the government. These jobs range from infrastructure construction and maintenance to community development projects. Along with these employment opportunities comes the benefits expected of a decent job: health insurance, paid leave, and investment plans for retirement. Plans vary, but popular propositions recommend a bureaucratic structure that matches people to jobs needed at the state and local levels – prioritizing the needs and desires of communities in determining production.

A federal jobs guarantee is not a new idea. In fact, President Franklin Delano Roosevelt proposed one in his Economic Bill of Rights. Every American, he asserted, has the right to “a job; an adequate wage and decent living; a decent home; medical care; economic protection during sickness, accident, old age, or unemployment; and a good education.” As part of his famous New Deal to combat the Great Depression, FDR established the Works Progress Administration (WPA), a government agency dedicated to employing unskilled, out-of-work Americans for public infrastructure projects across the nation. Around 8.5 million people gained employment through the WPA. Unlike many New Deal programs which were struck down by the US Supreme Court, the WPA dissolved in 1943 as the US wartime economy boomed and reached full employment.

Several notable Democrats have already come out in favor of a federal jobs guarantee. New York Senator Kirsten Gillibrand advocated for full employment sponsored by the government during her 2020 presidential primary campaign. Known progressives, Rep. Alexandria Ocasio-Cortez of New York’s 14th District and Sen. Bernie Sanders of Vermont, have both endorsed a jobs guarantee. While no Republicans have come out in support of one, a federal jobs guarantee can appeal to the core of both the Republican and Democratic parties. For Democrats, an FJG builds upon the party’s history of commitment to the American working class. Meanwhile, Republicans can rally behind a program that rewards work with a paycheck rather than blanket unemployment payments.

A federal jobs guarantee is also popular among registered voters. In a recent Civis Analytics poll, voters overwhelmingly support a jobs guarantee by a 23-point margin. Even among 2016 Trump voters, 32 percent support such a plan. Support is not concentrated in deep-blue states like California or Massachusetts, either. The same poll, cross-tabulated across all 50 states, reveals a majority favorability in every single state, with its highest favorability in typically deep-red and purple states including Mississippi, North Carolina, and Georgia.

How exactly, though, does a jobs guarantee combat the issues Americans face in the wake of Covid-19? Common criticisms of such a program include its price tag, a reduction in free-market competition, increased inflation, and the logistical challenges for administration and training. However, the very criticisms a jobs guarantee receives largely reflect the current realities such a program would combat. Worries of inflation due to full employment can be assuaged as the Fed can then manage inflation without increasing unemployment. Furthermore, take the predicted price tag of the program. At face value, the program could cost 2.3 percent of GDP – about $450 billion to employ and provide benefits to reach full employment in 2018. However, the reduction in demand for unemployment payments and related welfare programs mitigates this high net cost, as new workers rise above the poverty line. A study conducted by the Levy Economics Institute predicts the actual cost could be as low as 1 percent of GDP. Not only that, but every dollar spent on government workers is a dollar infused into the economy to multiply and is exchanged for the product of the workers’ labor. A jobs guarantee does not work like most social programs in that the economic benefit is based on hand-out spending; the very nature of the program ensures increased production for otherwise idle workers experiencing financial stagnation or hemorrhage. 

Furthermore, contrary to the beliefs of some critics, a government-guaranteed job can actually provide increased competition to the labor market. By providing employment at a minimum wage of $15, the government can effectively set a price floor for the labor-wage market, transferring power to workers and pressuring businesses to provide greater wages, benefits, and working conditions to attract employees. A labor-supply surplus is attenuated in that the demand for labor becomes nearly completely elastic – if there are not enough jobs, the government will then create more. Unemployment without a jobs guarantee is an issue less because there is not work to be done and moreso because the work is not profitable. When providing additional jobs is not profitable as it relates to product demand, fewer jobs are offered. This does not mean there is not work to be done. Many infrastructure projects, such as re-outfitting buildings to be more environmentally friendly or rebuilding bridges and public transportation, are yet to be done. When the government – the agency of the people – becomes an employer, the scope of productive motivation expands to social benefit. By engaging workers in public works projects, the American economy unlocks a collective demand that bolsters the economy further by the multiplier effect.

Another tremendous advantage of a federal jobs guarantee is more difficult to quantify: pride in work. According to a 2017 Gallup poll, only 30 percent of American workers report workplace engagement – that is, feeling an excited commitment to their job. If the people are able to advocate for the jobs they want done in their respective communities, the projects a localized jobs guarantee would pursue are able to positively benefit neighborhoods and, in doing so, give hired workers a boost in workplace pride. Under a jobs guarantee, workers have more say in what they do and how they work by nature of democratic participation. When workers have more power, like they do in unions, there is statistically significant greater job satisfaction. The current destructive economy driven by shareholder profit then evolves to consider societal benefit as a key factor. Workers under an FJG can feel a sense of duty to their employer, effectively the ‘public,’ while many workers under a corporate structure have no explicit notion of duty to the shareholders of their company other than their paycheck.

American capitalism, as it stands, fails its workers and fails its citizens. To combat the greatest economic disaster since the Great Depression, only 12 years after the Great Recession, high-impact government intervention is necessary – and should be geared toward eventual stability. The economy relies heavily on confidence, and American workers become less and less confident every time they are failed. A strong, robust economy with full employment would maximize production and bring back the American Dream. A federal jobs guarantee should absolutely be on the table for the Biden administration.

Photo: Image via Unsplash (贝莉儿 Danist)