We Don't Need a Job Guarantee, We Need an Income Guarantee

May 20, 2018

 

In recent weeks, democratic senators Bernie Sanders and Cory Booker have each sponsored legislation that would guarantee a job to every American who desires one. Those who know me personally, and know my passion for policies that help low income individuals pull themselves out of poverty, would think I support such a prodigious undertaking. I don’t. It’s actually a really terrible idea. While I support the sentiment behind a full employment program, I am haunted by the practical components of guaranteeing every American a job.

 

But before I totally write off any policy, I must ask myself a few questions. First, what are the social and economic costs versus benefits? (i.e. can the country afford it, and is it the best use of federal dollars?) Second, is the proposal even doable? (i.e. does the country have the resources to ensure the program in question is successful?) Third, and certainly most important, what are we really trying to accomplish here? (i.e. end goal)

 

First, let’s start with costs and benefits. Such a program would likely cost in the hundreds of billions, if not trillions. How will this be financed? For a country that generally dislikes taxes and already runs a massive fiscal deficit, it’s more than probable such a program would be deficit financed, only exacerbating the nation's ratio of revenue to outlays. But, could the program become revenue neutral over time or at least begin to show signs of fiscal sustainability? Certainly a question the CBO will have to answer before Congress even considers this for a vote. However, when looking at the benefits of such an endeavor, specifically the societal benefits, it does show promise. A job guarantee would give millions of displaced workers—those lower skilled individuals who have been left behind or all around forgotten by our government—a chance to reenter the labor force.

 

Second is feasibility. Does the government even have enough jobs to give out to match those seeking jobs? We certainly don’t want a make work jobs program where a worker digs a hole on Monday, fills it in on Tuesday, rinse and repeat. We want a federal jobs program that provides some national economic utility. But 21st century jobs, even low skill ones, require quite a bit of technical skill and on-the-job training. Think of the hundreds of hours a forklift driver has to log before he receives a license to work in a warehouse moving pallets. Even many labor intensive jobs like construction require significant pre-employment instruction. Will the federal government pay to train workers before they are able to do the job effectively? I highly doubt it.

 

Third, what is the program really trying to accomplish? Are we trying to ensure economic security, or are we trying to legislate the personal dignity associated with employment? If it is the latter, then the federal government will need to invest in workforce training because the jobs of today are not shovel ready. If it’s the former, a more prudent approach would be for Congress to implement a universal basic income. Such a program would guarantee a subsistence income level, wouldn't require a federal agency to oversee workforce training and job placement, and wouldn't encourage employed workers to leave their current job to obtain a higher paying federal job, possibly creating mismatches and labor shortages in the private sector.

 

In conclusion, guaranteeing every American is a noble pursuit, and I applaud the senators for trying to help those left behind, but at the same time, I think we need to more clearly define what we want to accomplish. If the impetus behind a jobs guarantee is financial security, then it’s time we give serious consideration to a universal basic income.  

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