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Thinking About (Much) Better Pro-Work Ideas Than a Cartoonish Federal Jobs Guarantee
The idea of a federal jobs guarantee, perhaps last seen in the enjoyable 1993 film Dave, is the hot-take economic policy on the left at the moment. (Sorry, universal basic income, your 15 minutes appear to be up.)
Now there are many, many problems with a federal jobs guarantee. In a recent blog post, economist Timothy Taylor highlights lots of them, at least regarding the undercooked Bernie Sanders version. There’s a government managerial problem, a jobs-skills mismatch problem, a geographical mismatch problem, a worker displacement problem, a worker discipline and incentive problem, a “what happens to existing anti-poverty programs” problem, and, of course, a budgetary problem. Lots of problems. You really can’t hand-wave these away.
Taylor also includes some commentary by Mother Jones’ Kevin Drum, which really shows why the jobs guarantee fails the sniff test. Drum:
Since this is just a proposal, let’s also suppose that Bernie is proposing universal health care and a minimum wage of $15, which we know he supports. In that case, everyone with a job would be just as well off keeping it. However, there would still be millions who don’t have a job and want one, and more millions who might not like their jobs and would prefer a government job that’s a little cushier. How many is that? Maybe 5 million? 10 million? And probably more like 15-20 million during a recession.
That’s still pretty damn close to insane. It’s about 3-10 percent of the labor force effectively nationalized forever by the federal government, which makes it roughly comparable to the emergency labor force employed for a few years by the WPA during the depths of the Depression. This is why even our lefty comrades in social democratic Europe don’t guarantee jobs for everyone. It would cost a fortune; it would massively disrupt the private labor market; it would almost certainly tank productivity; and it’s unlikely in the extreme that the millions of workers in this program could ever be made fully competent at their jobs.
That’s what we in the commentary business call a reality check. But, of course, government should not be indifferent to encouraging work. This from my AEI colleague Michael Strain in a piece for Bloomberg:
Published in EconomicsThe right place to start is with policies to help individuals become more successful workers. One example is the federal earned-income tax credit, which uses taxpayer dollars to subsidize the earnings of low-income, working households. By increasing the financial rewards of working, previous EITC expansions have pulled people into the workforce. Or take work-based learning programs, like apprenticeships, which can be successful by combining skill-building with formal instruction in order to increase workers’ productivity and wages.
But in addition to focusing on workers — and beyond monetary policy’s role in sustaining a full-employment economy — there is a place for (microeconomic) solutions involving employers. Senator Sanders’s proposal is cartoonish, but targeted efforts to help ensure that jobs are available can be reasonable. The goal of such efforts should be the creation of new jobs, in the private sector, that would not exist in the absence of the program. These policies should be in place during economic downturns, when the demand for workers is weak. Their focus should be on particularly vulnerable workers, with the goal of building skills and experience that will help people succeed over the long term, after the economy has recovered.
Every version of Keynesian economics always boils down the government hiring people to dig holes and fill them up again. But perhaps Bernie can find something even less productive for these people to do.
Let’s suppose too that we have open borders and that undocumented aliens are eligible as the left desires.
I wonder if some of the surprisingly high approval for this weird idea comes from people thinking “Better to put them to work than have them on the dole”?
I’m not sure I agree with Drum’s assumption that the relevant population is only people who have no job. First, I think with a $15 minimum wage and additional “benefits” (if there’s any direct employer cost for “universal” medical insurance), I think a bunch of current jobs will disappear to automation. Second, there seems to be a non-trivial population of “under-employed” people – people who want full time jobs but find only part-time, or for some reason have jobs that do not use their full skill set. A flood of such people into a government jobs program would really set off the problems.
They miss the obvious solution. Ship all the underemployed illegally across the borders to other countries. Everybody knows that an illegal immigrate immediately becomes more competent, more intelligent, harder working. Doing the jobs that citizens of that country are too lazy and stupid to do. Imagine how success Mexico, Central and South America will be with millions of our unemployable ex-citizens. The GDP of Canada would go through the roof as they embrace our society’s superior unproductive members.
I agree that the Guaranteed Govt job idea is nutty. But that is where the Centerists (if there is such a thing) in the Democratic Party are. It’s not just crazy uncle Bernie, but Corey Booker and Kirsten Gillibrand. The actual Left wing is at Universal Basic Income and reparations for slavery.
An aside – Why does every solution proposed by James P involve some new government policy or project or program? Why is less government never a viable JP solution?
I know you mean that as sarcasm, but I actually like the idea. Of course, you would have to dress it up a little to make it acceptable to Democrats. Let’s take anyone who can’t find a job and draft them into the Peace Corps. The Peace Corps is a good Democratic program which is “obviously” beneficial to both the participants and the countries where they serve. “Mandatory volunteerism” is also an idea popular with Democrats. So draft these people and ship them all off to one of those S-hole countries that Trump talks about, where they can work to redeem the sins of our imperialist culture. Best of all, Peace Corps participants get paid peanuts (but that must be okay, because it’s a Democratic program) so it won’t bust the budget. I really like it.
Most discussions of the silly proposal, even among its critics, seem to accept that the Federal government should play some role in the matter. Since governments are a significant cause of chronic unemployment in the first place it’s a strange assumption. Temporary unemployment on the other hand has as many causes as there are people, business and technological changes and is completely beyond the capacity of remote unaccountable officials who by necessity operate without real time information on any of these causes. So what should our governments do? Stop causing it.