At the left-leaning Economic Policy Institute, Josh Blevins writes Recommendations for creating jobs and economic security in the U.S.:
Outside the Beltway, the idea of government directly providing paid work to all willing workers—a job guarantee—has been gaining steam. Paul, Darity, and Hamilton 2017 and Tcherneva 2012 are recent examples of academic treatments of the job guarantee, and Spross 2017 is a useful popular overview.
On one level, this emphasis on the government’s role in job creation in recent years is a bit of a puzzle. After all, the U.S. economy has created jobs at a pretty respectable clip for most of the past eight years: December 2017 marked the 87th month in a row that has seen private-sector job creation, with a cumulative 16.6 million jobs created since the recession’s trough in June 2009. Further, the unemployment rate has been cut by more than half since its Great Recession peak, and in December 2017 it sat at a level not seen since 2001.
Given these rosy-on-paper employment statistics, it seems worth examining whether or not there’s still a role for public aid in generating jobs. This report examines that question and then provides an overview of a policy framework for ensuring there are enough jobs in the economy. It ends with a discussion of two related labor market issues that the political focus on creating jobs threatens to obscure: the need to ensure that the economy’s jobs (both new jobs and incumbent jobs) are good jobs and the need to ensure that at least some of the economic security that jobs provide is available to those unable to find steady work. [...]
Even when a modest recession strikes, much less a powerful downturn like the Great Recession, there have always been analysts and activists who argue in favor not just of government programs to boost hiring in the private sector but also of the government engaging in direct hiring. This, of course, sets teeth on edge at the Chamber of Commerce, the Cato Institute, and Republican HQ. It also gets a poor reception among some elected Democrats who have bought into the propaganda that such direct job creation programs are unAmerican.
Which is nonsense.
Having overcome the acute job losses of the Great Recession, the unemployment rate is, in fact, at one of its lowest points in the past quarter-century. Not only that, but around a year ago, the inflation-adjusted median household income finally returned to its pre-recession level.
But there are chronic economic problems in addition to the acute ones that arise with every economic downturn—and were so much worse than usual during the Great Recession and its aftermath. For instance, compared with the past, a lower percentage of people are employed in their prime working ages of 18-54. The reasons for this are something that analysts have yet to figure out.
Some of these chronic problems could be removed or at least reduced by putting more people to work in our increasingly neglected and understaffed public sector.
Direct job creation programs are not alien to the United States. New Deal programs such as the Works Progress Administration (employed about 8 million), the Civilian Conservation Corps (employed about 2.75 million), and the National Youth Administration (employed about 2 million students in part-time jobs) were life-lines to people who would otherwise have remained without work. Unfortunately, racism kept these programs from being as widely available as they should have been.
Eighty years later, the results of the WPA and CCC jobs can still be glimpsed in places throughout the nation. Those, however, were temporary programs. What is needed is something more permanent, a universal jobs program, in place whether the economy is soaring or scraping bottom. A job for everyone who wants one. The center-left Center for American Progress has proposed one version of this in its “Marshall Plan for America” to “counter the effects of reduced bargaining power, technical change, globalization, and the Great Recession.”
To say it succinctly, such a program would ensure that anyone ready and willing to work would be hired, given on-the-job training, compensated with wages and benefits set at a living wage level. Those jobs would be models for what we desire jobs to be in the private sector, with vacation and sick leave, and contributions to Social Security.
Note that the program would not be some 21st Century version of digging holes and filling them. These government jobs requiring whatever skill level would set a minimum standard that the private sector would ultimately have to meet. Public policy would thereby establish basic wage levels and benefits, increased as the nation’s ability to do so increases.
Government bureaucrats would not run the programs or meddle in their management. While the feds would fund this direct job creation, most of the jobs would be created by state and local governments and not-for-profit organizations. While our decaying infrastructure could be targeted for improvement as a result of many of these jobs, there are plenty of other potential areas that could benefit: eldercare, childcare, and some new version of the old WPA and CCC, the latter replaced perhaps by a Clean Energy Conservation Corps.
In good times, many of these government workers would be hired by the private sector, often boasting skills they didn’t previously have.
Thus, the program would serve five purposes: 1) providing income to individuals and thus boosting the demand that rebuilds a battered economy; 2) training workers in new fields and/or upgrading what they already know; 3) providing a ready source of skilled workers to the private sector not only when the economy recovers but also when things are going comparatively well; 4) serving as a model for the private sector by setting standards in compensation; and 5) filling some of the service gaps now prevalent in the public sector.
A permanent jobs program would not have to be reinvented every time the economy goes south. It would instead always be available, which would lessen the impact of recessions in the first place, and avoid the kind of partisan battles that attended the passage of the stimulus package that President Barack Obama managed to get turned into law the early days of his first term in 2009.
While the EPI report doesn’t push for such a broad program, it includes recommendations that would mesh perfectly with it. Here’s the outline version of those recommendations that can be seen in considerable detail at the institute’s website:
- We need to maintain aggregate demand at levels consistent with macroeconomic full employment. [...]
- We need to make sure the resulting job growth is widely shared. [...]
- We need to then address remaining stubborn pockets of unemployment through targeted policies and programs, including a “public option for employment.” [...]
- We need to focus on boosting job quality as well as quantity. [...]
- We need to ensure that people’s basic economic security is not so tightly linked to their employment.