Posted 30/04/2018 by Don Arthur
Once considered too radical to be taken seriously, ideas like the universal basic income (UBI) have now become part of mainstream debate. The most recent radical idea to enter the mainstream in the US is the jobs guarantee. Rather than offering unemployed and underemployed workers job-finding programs or training opportunities, under the jobs guarantee, the government would offer them actual jobs.
A number of high profile Democrats have gotten behind the idea and it’s being debated in the pages of respectable publications like the New York Times, the Washington Post, the New Republic, Newsweek, and Vox.
The jobs guarantee is an unashamedly political idea. In a piece for the Nation, Sean McElwee, Colin McAuliffe and Jon Green break down recent polling data to argue that the policy could bring voters back to the Democratic Party. They write:
A job guarantee offers a way for the Democratic Party to return to its roots as a multiracial working-class party. As President Donald Trump recently proclaimed, ‘We know the single best anti-poverty program is a very simple and very beautiful paycheck.’ Indeed, and the government should guarantee one.
As Bryce Covert puts it in the New Republic, ‘If Democrats want to win elections, they should imbue Trump’s empty rhetoric with a real promise: a good job for every American who wants one.’
How would a jobs guarantee work?
As with UBI proposals, there is no consensus on the details. The core idea is that every American who is able to work would have the right to a decent job at a decent rate of pay. As Washington Post columnist Katrina vanden Heuvel explains:
A Good Jobs Guarantee would be a federally funded, locally administered program. Municipalities and towns, linked with nonprofits, would create community job banks that would organize real jobs with good pay and benefits. By addressing needs largely ignored by private markets, the program would avoid competition with private business. By paying a living wage — most plans call for a minimum of $11 to $15 an hour with benefits — the jobs guarantee would lift the floor under workers, insuring that no one works full-time and remains in poverty.
Some supporters, like Neera Tanden and her colleagues at the Center for American Progress (CAP) envisage the program paying workers to undertake full-time training as well as funding actual jobs. Democratic senator Cory Booker proposes funding a pilot program in a number of high unemployment communities.
Who supports it?
Three high profile Democrat politicians have supported the idea: Cory Booker, Kirsten Gillibrand, and Bernie Sanders. The jobs guarantee is also being promoted by two liberal think tanks the Center on Budget and Policy Priorities (CBPP) and CAP.
Academics William Darity Jr (Duke University) and Darrick Hamilton (The New School) have spent more than a decade developing and popularising the idea.
Arguments for a jobs guarantee
Supporters argue that a jobs guarantee would help stabilise the economy during economic downturns and lift workers out of poverty when they are unable to find jobs that offer enough pay or hours of work.
One of the most popular arguments is that it would improve pay and conditions for all low-paid workers. As Bryce Covert argues:
If the government offered a job to everyone who wants to work, private-sector employees could demand adequate pay, humane schedules, and more generous benefits with less fear of getting fired. In effect, corporate America would be forced to compete with the government for employees—which would put pressure on private employers to provide desirable jobs.
Arguments against a jobs guarantee
The idea has attracted criticism from all sides. In New York magazine Jonathan Chait acknowledges that the jobs guarantee co-opts ‘the conservative themes of self-sufficiency and hard work’ and neutralises the objection that Democratic policies subsidise sloth. However, he argues that the proposal suffers from two serious problems—its cost and the practical difficulty of creating such a large number of jobs.
According to Chait, a program that provided good pay and benefits could quickly expand beyond the target group of unemployed and underemployed workers. The cost of running such a large program would probably mean increased taxes on the middle class and this would put an end to its popularity.
Chait argues that an even bigger problem is ‘is that designing a federal jobs program large enough to usefully employ all applicants is a devilishly complex challenge that none of the proposals currently circulating have worked through.’ If the program funded jobs such as child care that communities rely on, how would it respond when the labour market tightened and workers left for jobs in the private sector? The jobs guarantee would need to be restricted to performing work that the community could afford to do without. Starting with workers and designing jobs that match their skills, experience and availability for work would be a huge challenge.
At the People’s Policy Project, Matt Bruenig makes a similar point. Breunig points to the work of Australian political economy student Hugh Sturgess who wrote his 2016 honours thesis on the topic. In the conservative National Review, Theodore Kupfer references both Bruenig and Sturgess in a piece that dismisses the idea as an attempt by Democratic candidates to shore up their progressive credentials.
The Australian debate
Australian academic Bill Mitchell at the Centre of Full Employment and Equity has long promoted a version of the jobs guarantee. Journalist Claire Connelly discussed his work last year in a piece for the ABC on the UBI and jobs guarantee.
Where to next?
If a future government decided to move towards a jobs guarantee, policymakers may decide to adapt the idea to make it more affordable and easier to implement. This could mean restricting eligibility to the long term unemployed, limiting the amount of time an individual can remain in a job guarantee job, capping the number of jobs, and combining part time work with part time training to reduce the cost of wages.