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The Case for a Federal Jobs Guarantee

Economist Robert Reich. (YouTube screen grab)

We must not forget the economic frustrations that helped fuel Trump’s election.  For too long, too many Americans have faced lousy jobs or no jobs. One answer: A guaranteed job at a living wage.

The Republican answer won’t work

Republicans continue to push for work requirements for recipients of Medicaid, food stamps, and public housing benefits.  But the real problem is there aren’t enough adequately-paying jobs to go around.

Even today, with a low official unemployment rate, millions who work part-time jobs want full-time work. Millions more are too discouraged to look for work, having endured the brutalities of job discrimination for far too long, or unable to move to where the jobs are.

And a large and growing number of jobs don’t pay enough to get people out of poverty.

A federal jobs guarantee would work

At the same time, a lot of work needs to be done – “greening” our nation’s infrastructure, caring for the elderly, teaching in our public schools, adequately staffing national parks, you name it.

So why shouldn’t the federal government create jobs and connect them directly to people who can’t otherwise find one, with decent, predictable hours and at a living wage?

An added plus: The availability of such jobs would give more bargaining power to many low-wage workers to get better hours and wages – because if they don’t get them from their employer, they’d have the option of a public job. In this way, a federal job guarantee would raise the floor for job quality nationwide.

And a job guarantee would act as a giant economic stabilizer during downturns, when the first to lose their jobs are usually the most economically marginalized.

We can afford it

Can we afford a job guarantee today? Yes. It’s estimated to cost around $670 billion in its first year – $30 billion less than the defense budget.

But that tab would quickly shrink. With more people working at better wages, Americans would have more purchasing power to buy goods and services. This would lead to more hiring by the private sector, and eventually, less need for the federal job guarantee.

More people working would also generate more tax revenue, partially offsetting the direct cost of the job guarantee.

Additional savings would come from fewer people needing public assistance. The Center for Labor Research and Education at Berkeley estimates that the federal government now spends over $150 billion a year because workers aren’t earning enough to get out of poverty. Doesn’t it make more sense to use this money to create guaranteed jobs at a living wage?

So, let’s think beyond Trump – to what Americans need. Few things are more important than a decent job. Full employment through a federal job guarantee makes sense – for workers, for the economy, for America.

Robert Reich
Contributor
Robert B. Reich is Chancellor's Professor of Public Policy at the University of California at Berkeley and Senior Fellow at the Blum Center for Developing Economies. He served as Secretary of Labor in the…
Robert Reich

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