Pavlina R. Tcherneva - The Case for a Job Guarantee

You are willing to work hard for that job, but the job just isn’t working for you. And this time you are lucky. Remember 2009, the overcrowded unemployment offices, and the many online ads that said: “the unemployed need not apply”? 6

But maybe you are none of the above people. Maybe you have an OK job, at least compared to your friends. The pay is not great but the firm promises opportunities for advancement. You can provide for the family and, after a few more months, you will finally earn that two-week paid vacation. The only problem is that your boss harasses you mercilessly. But you stick around. Could you really give up this “stable” job? And you are so close. You can almost smell the ocean.

Maybe you live in Puerto Rico, and your shop was swept away by Hurricane Maria. Many people died, many more fled, and a year and a half later one in twelve people on the island were still looking for work. Or maybe you escaped the California fires, but you lost your job and the FEMA money for your incinerated home is running out. You and many others in flood- and tornado-ravaged areas still need to pay the bills, and local communities still need rebuilding.

How many of these stories can we tell? In the US – millions; globally – hundreds of millions. The loss of one’s job and livelihood is not just a consequence of unusual circumstances or “acts of God.” It is a regular occurrence. The drumbeat of the economy, expanding in good times and shrinking in bad, along with outsourcing and technological change, creates ongoing job losses. And while new employment opportunities are also created, they are never enough for all jobseekers even at the peak of expansions. Meanwhile many workers are in unstable, poorly paid jobs. In 2018, there were 6.9 million working people earning below the official poverty level. 7For millions of Americans, one job is just not enough.

What if we changed all that and made it a social and economic objective that no jobseeker would be left without (at a minimum) decent living-wage work? What would be the impact on the lives of people, communities, and the economy?

Imagine that you go back to the unemployment office but this time, in addition to every other resource it offers, it also produces a list of local public service jobs, each offering a basic wage (say $15/hour), healthcare, and affordable quality childcare. You can choose from full- and part-time options. As it does now, the office continues to offer additional wraparound services including training, credentialing, GED completion, family-focused case management, transportation subsidies, counseling, referrals, and others.

These are local job opportunities in the municipality or local non-profits (finally, a shorter commute), but they are federally funded (not that you care, a paycheck is a paycheck). The urban fishery is starting a new STEM program with local schools. The historical society is digitizing its maps and records. The Green New Deal has launched a comprehensive weatherization program and green infrastructure projects abound. A project is hiring for that waterpipe replacement that dragged on for years, and the cleanup of the vacant lot behind the municipal park needs workers. Local community groups are running outreach programs for veterans, the homeless, at-risk youths, and former inmates, and community health clinics are offering apprenticeships and training opportunities. A community theater is running afterschool programs for children and evening classes for adults.

All of these jobs were either nonexistent or the projects were sorely understaffed before the Job Guarantee was launched. If your community has been battered by extreme weather disasters or environmental hazards, the program will help staff the cleanup and rebuilding efforts and the region’s revitalized fire and flood prevention programs. And this entire menu of options is organized and supplied courtesy of the Job Guarantee. It is a program in cooperation with local and municipal governments and local non-profit providers to ensure that no jobseeker is ever turned away.

The Job Guarantee office is there to help you transition to better-paid employment opportunities in the private or public sectors. The economy is growing and new job ads promise opportunities for advancement, flexible hours, and telecommuting. With your additional experience and training, you line up some job offers. You say goodbye to the Job Guarantee and are off to the next opportunity.

Or maybe you do not need the Job Guarantee at all. After all, you are a highly educated and skilled individual with an entirely different professional experience – your career ladder is clear, your contacts are many, and you are able to jump from one opportunity to the next with ease. You earn a good income, provide for your family, and would never consider or likely need to apply for the Job Guarantee. But the program has helped rehabilitate your neighborhood, built community gardens in your kids’ schools, organized new programs and community events in the local library, and restored the nearby hiking trails and public beaches.

Can this become a realistic scenario? Can we put in place a program that provides a basic employment safety net for those who need it, while creating some much needed community work that benefits everyone in every state and every county, no matter how small or how remote? Subsequent chapters will argue that the answer is yes, and that we already know a lot about how to make it happen. Such a program would deliver overwhelming benefits – economic, social, and environmental.

Maybe these stories resonate and you can see the impact a public job option could have. With the Job Guarantee, you could find local work in a community project that mattered to you. You could say “no” to an abusive employer if you had a living-wage alternative. You could get a starter job before moving on to other opportunities, and save yourself the frustration of being rejected time and again by employers who may not like your sparse résumé. You would be able to avoid the stress of applying for food stamps and other government programs, because you have a living-wage job and can make ends meet. We are here just scratching the surface of the difference a Job Guarantee could make to the lives of the millions of people behind the unemployment and underemployment numbers.

But maybe these stories don’t resonate. It just sounds too good to be true. Isn’t there something called the “natural unemployment rate”? What can the government really do about it? Can it even create jobs and, if it tried, wouldn’t it distort market incentives? Maybe you worry that people wouldn’t work as hard if they weren’t afraid of being unemployed. Or that the program would ruin productivity. And how much would it cost? Isn’t it very expensive to hire millions of people? All of these concerns and more are addressed in the following pages.

The economics of unemployment is bad economics. One need not share the personal distress unemployed people and their families face to understand that hiring those willing to work is a much better economic approach than the one we have at present. Reaching that understanding is the task of the next chapter.

1 1. The broader measure would include people who want to work but are not counted because they did not look for work in the survey week, or those who work part-time because they cannot find full-time work. For details see, e.g., Flavia Dantas and L. Randall Wray, “Full Employment: Are We There Yet?,” Levy Economics Institute, Public Policy Brief No. 142, 2017.

2 2. Pavlina R. Tcherneva, “Reorienting Fiscal Policy: A Bottom-up Approach,” Journal of Post Keynesian Economics, 37(1), 2014: 43–66.

3 3. T. Piketty and E. Saez, “Income Inequality in the United States, 1913–1998,” Quarterly Journal of Economics, 118(1), 2019 [2003]: 1–39.