Homenews

A radical fix to America’s stagnant economy: Give people who want to work a job

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Every American deserves a job. But not all who want to work can find employment that will lift them from poverty.

The U.S. Labor Department says the nation’s unemployment rate of 4.4 percent in August, its most recent monthly tally, represents full employment. But that doesn’t tell the whole story. It doesn’t account for the roughly 14 million people who want work but can’t find it.

And in some pockets of the nation, claims of full employment is a cruel misnomer. For black Americans, unemployment was 7.7 percent, almost double the national rate, and for Hispanics it was 5.2 percent, unchanged from the previous month.

At a time when the national poverty rate is 14.5 percent and one in five children are poor, it’s unconscionable that so many Americans can’t find life-sustaining work.

So what’s the nation to do?

William Darity, the Samuel DuBois Cook professor of public policy at Duke University, believes the federal government can come to the rescue of out-of-work Americans by assuring them of a federal jobs guarantee.

It’s an idea that Darity said is gaining support across a wide and diverse spectrum of state and local policy advocates, anti-poverty activists and think-tank economists. In fact, the idea has drawn an endorsement from groups ranging from the Black Lives Matter movement to leading economic theorists to my Center for American Progress colleagues.

Darity and his colleague Darrick Hamilton, a professor of economics and urban policy at The New School in New York, have spent much of the last decade fine tuning how a federal jobs program could work to reduce poverty, especially the disproportionate burden that poverty and unemployment places on black and other minority communities. As Darity told The Pittsburgh Post-Gazzette:

Any American 18 years or older would be able to find work through a federally funded public service employment program — a ‘National Investment Employment Corps’… Each National Investment Employment Corps job would offer individuals non-poverty wages, a minimum salary of $20,000, plus benefits including federal health insurance. The types of jobs offered could address the maintenance and construction of the nation’s physical and human infrastructure, from building roads, bridges, dams and schools, to staffing high quality day care.

I spoke with Darity recently about his proposal and why he believes the nation is missing an opportunity to make full employment a reality. He said the hardships faced by a wide swath of Americans during the recent Great Recession convinced him that now is the time to push policymakers to make employment available for all who want to work. Read on for the highlights from our conversation.

What exactly is a federal jobs guarantee?

The premise is pretty straightforward: The federal government would assure every American who wants to work that they could have a job at above-poverty wages. There would actually be a job ladder, but the entry-level wage would be above the poverty line.

You have said this isn’t a new idea.

No, not at all. It dates at least, if not earlier, to Franklin Roosevelt’s Second Bill of Rights or his economic bill of rights. Some people have argued — I believe David Stein, the historian — that this actually dates to some of the thinking of the formerly enslaved folks in the Reconstruction era, who argued there should be some assurance of employment [for recently freed slaves].

Is the opposition to your idea on the grounds that it’s special pleading for black folks and other minorities?

Actually, there’s some reason to believe that as much as a majority of the American population is in favor of this idea now. There was a study… conducted in reaction to an article published in Rolling Stone, where the author was talking about a set of policies that should appeal to millennials, one of which was a job guarantee.

And there was a national survey that was performed and the only one of those ideas that got significant support was the jobs guarantee. I think it was somewhere in the vicinity of 40 to 45 percent of the respondents said that they agreed with that being a good idea, that the federal government should provide employment to anybody who wants a job. That was actually a plurality of responses because there were a significant number of people who said they didn’t have any opinion.

The most recent iteration of this idea was in the late 1970s with the Humphrey-Hawkins Act that called for federal job programs. Why did it fail to do what you’re suggesting and what’s different now?

Our ideas are an expression of this old idea. That legislation suggested that if the private sector was not able to generate a significant number of jobs to produce full employment, then the federal government will provide those jobs. It characterized the federal government as functioning as an employer of last resort. But it was an unfunded mandate in the sense that there’s no structural or financial support for executing the program. So we’re actually talking about how you would put flesh on the bones of the Humphrey-Hawkins bill.

Why hasn’t your proposal generated more political support?

Well, that’s an excellent question, seen in light of the survey I just told you about. I was quite surprised that no politicians have latched on to this idea and tried to push it. I don’t fully know the answer. It seems like there’s more attention being drawn to it. People are taking this idea more seriously now than they have before and that’s very gratifying to see. But I’m not entirely sure why this has not been put on the plate for any politician’s agenda.

I think that at some of the local and municipal levels, there’s a few political candidates who are talking about this, but I’m not aware of any national candidate who has embraced this idea and I’m not sure entirely why since I don’t think they would be going fully against the grain of anybody.

Could this work on the local, municipal level? Can a city guarantee its residents full employment?

It would be more expensive in a per capita sense for a municipality typically to do this, especially since municipalities — and state governments, for that matter — are sometimes under a legal obligation to balance their budgets. But I think it would be feasible in larger cities because their budgets are such that it would not absorb their entire budgets to try to produce a program like this. But there would be a reciprocal benefit in terms of their tax basis that would compensate for the expenses they would be faced with in executing such a program. It would also reduce any local expenses that are associated with a variety of support programs that are needed for people who are subjected to impoverishment. So, yeah, I think it’s possible but it would be easier to be done in a larger municipality.

What would it cost on the federal level to do this?

We estimated that if you were to put 15 million people to work — which is the approximate number of people who were out of work at the trial of the Great Recession — if you were to put 15 million people to work at an average expenditure of $50,000, which would be inclusive of salaries, benefits, and materials and training costs, that would cost $750 billion.

What’s interesting about that figure is, circa 2012-2013, I think the expenditures on the variety of entitlement programs came to approximately the same amount, $747 billion to be exact. So you could finance the federal program in somewhat of an offsetting fashion by reducing the expenditures on entitlement programs, which would no longer be needed to the same degree because the job guarantee would simultaneously function as a route to full employment and a route toward eliminating poverty. It would definitely eliminate working poverty.

“It would definitely eliminate working poverty.”

Won’t the increasing trend of mechanization — what I call the rise of robot workers — make it impossible for America to reach full employment?

Robots can’t put people out of all categories of work. What we could observe is that certain types of jobs will go out of existence, but we will not observe all work going out of existence. What’s particularly significant, unless we want people to be cared for by robots, is that the care work is something I would presume we wouldn’t want mechanized. So care work would continuously have to be done by humans and preferably by humans who are well-trained and committed to the work. One of the things we propose with the job guarantee idea is that we would have high-quality training and high-quality provisions of child and elder care service, which I think would be a huge benefit to the society in many ways.

Wouldn’t a federal program like this create a welfare state?

I don’t think so. When people think about a so-called “welfare state,” with all the pejorative connotations, it’s associated with people receiving income without working. The premise here is that we’re going to be paying people to work; we’re going to be paying them to do socially useful work. I’m not sure in what way that would constitute a welfare state arrangement.

I’ve argued that folks who tend to lean to the right ought to be in favor of this. They don’t like people to paid income without working and that the premise of this program. In fact, we would find out who didn’t want to work.

Some people advocate for a guaranteed income for all Americans. How does that compare with your ideas?

Let me say at the outset that the job guarantee and the basic income guarantee are not necessarily mutually exclusive. I could conceive of scenarios where we had both polices in place simultaneously and I’m not opposed to that.

But of one without the other, we lose the benefit of the social work that could be done under the job guarantee and we lose the benefit of meeting individual sense of dignity that’s associated with work. Those would be the losses.

The way I like to put it is that if you made me choose between the two, I’d rather have the job guarantee without the basic income guarantee, than to have the basic income guarantee without the job guarantee.

This interview has been edited and condensed for clarity. 

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