A Federal Jobs Guarantee: Ending Unemployment

Rep. Ayanna Pressley
In February, Rep. Ayana Pressley (D-Mass.) introduced a Congressional resolution for a jobs guarantee, with the support dozens of groups.


By GREGORY N. HEIRES

Advocates describe a Federal Jobs Guarantee as an affordable solution to the challenges of short-term and structural unemployment.

If enacted, the jobs guarantee would ensure that nearly all job seekers are able to find work, and it would significantly diminish government spending on unemployment relief and the many individual, family, and societal problems caused by unemployment.

“A Federal Jobs Guarantee would virtually end unemployment,” said Trudy Goldberg, chair of the Nation Jobs for All Network.

“I am absolutely convinced that a jobs guarantee would ultimately save tax dollars through reducing the cost of unemployment while bringing in more revenue thanks to the new employment opportunities it would create,” said NJFAN board member Phillip Harvey, a professor of law and economics at Rutgers University.

The pandemic-induced economic downturn has created a growing interest in a federal jobs guarantee.

Earlier this year, Rep. Ayana Pressley (D-Mass.) unveiled a proposal for a jobs guarantee with the support dozens of groups, including the NJFAN and PolicyLink.

The Right to a Job

In our modern political era, the roots of the proposal go back to the New Deal.

As early as 1932, Franklin D. Roosevelt, in a major campaign speech, stated that “Every man has a … a right to make a comfortable living.” It was the achievement of full employment in World War II that convinced him that it was possible for the federal government to guarantee living-wage work.

The first tenet of President Roosevelt’s 1944 Economic Bill of Rights called for the “right to a useful and remunerative job in the industries or shops or farms of the nation.” The second tenet supported the right to “earn enough” to lead a life of dignity.

Goldberg points out that FDR regarded the job guarantee as “the most fundamental, and one on which the fulfillment of the others in large degree depends.” By this he meant that the right to employment would make it easier to achieve guarantees of decent housing, health care, and education. In short, Goldberg emphasizes, the Job Guarantee is central to the achievement of essential economic rights.

The Universal Declaration of Human Rights adopted in 1948—and inspired by Roosevelt’s Economic Bill of Rights–states that everyone has the right to work, to free choice of employment, to just and favorable conditions of work and to protection against unemployment.

For decades, NJFAN has been a leading voice in the country for a federal jobs guarantee.

In 1994, Goldberg and NJFAN board members Sheila D. Collins and Helen Lachs Ginsburg wroteJobs for All: A Plan for the Revitalization of America,” which launched the National Jobs for All Network (formerly Coalition).

In the book, the authors outlined a plan for full employment that would guarantee a living-wage work “based on the philosophy that work and production, exchange and distribution should be redesigned in ways that are conducive to the full development of the innate potential of all people and to the sustainability of the ecosystem.”

A Federal Job Guarantee would set a new, higher standard — not only for wages but also for hours, schedules, and benefits — that private employers would need to compete against to find workers, according to a PolicyLink.

A proposal developed by NJFAN board member Darrick Hamilton and economists William Darity and Mark Paul envisions creating a National Investment Employment Corps. The U.S. Labor Department would run the new agency, which would allocate funds for state, county, and local governments, as well as Native American nations. It would work with other federal agencies to provide funds for training and jobs in infrastructure and care giving.

The price tag for a federal jobs program would be hefty, requiring the spending of billions of dollars on new jobs and training.

One estimate places the tab at $612 billion a year, which assumes that official unemployed workers and others who are seeking work but not covered by the official government unemployment statistics would be paid $20 an hour and work 40 hours a week, according to a 2020 Insider article by George Pearkes. But put that in perspective: The Bureau of Economic Analysis reports that the government spends substantially more on military consumption and investment every year: 3.94 percent as of the third quarter of 2019, versus 2.7 percent of GDP on all discretionary non-defense spending consumption and investment by the federal government, which does not include transfer programs like Medicare and Social Security.

While the spending on a federal jobs guarantee would be high, its expenditures would be partially offer by spending related to job loss. With a federal jobs program in place, the need for unemployment insurance ($33 billion in fiscal year 2016) would plummet, as a study by the Center for Budget and Policy Priorities points out. Demand for Temporary Assistance to Needy Families ($16 billion) would largely disappear. Thanks to boosted wages, millions of families would not have to rely on Supplemental Nutrition Assistance Program ($368 billion) and the Children’s Health Insurance Program ($14 billion). Affected workers would not need to be covered by health care coverage, so they would no longer need to rely on Medicaid ($368 billion) as they would health coverage in their new jobs.

Apart from addressing the persistent problems of poverty, inequality, structural unemployment and low-wages, a federal jobs guarantee would benefit the economy overall. A federal jobs guarantee would help address the business cycle and be “smoother” than one-time traditional stimulus packages, according to Harvey. Historically, governments have responded to major economic downturns and employment crises with Keynesian-inspired policies of injecting huge sums into the economy. These expenditures, however, generally do not target specific jobs and specific areas where unemployment is high, and there is a lag of about 18 months before the stimulus works.

With a permanent program in place, the government would be able to act more quickly to provide jobs to unemployed workers to help jump-start the economy. “The program would be faster, better targeted and cheaper,” Harvey said.

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