Against a guaranteed jobs program
Every one who wants a job should ideally have a job. But the government shouldn't "guarantee" it.
President Trump made many wild claims about the U.S. economy during the 2016 campaign. He frequently asserted that official job numbers dramatically understated unemployment. Fake government news! The real unemployment rate, he speculated, could be as high as 42 percent, far worse than at the depth of the Great Depression.
Today, of course, President Trump has fully embraced those very same job stats as evidence that Trumponomics is working. After all, the official unemployment rate is 4.3 percent — though lowest number since 2001, and a level that probably puts us at or near full employment.
Oddly, though, liberals seem to think we're on the verge of a permanent jobs depression — or that we're already there.
Some progressives are calling for the sort of large-scale, public jobs program not seen since the 1930s. The left-leaning Center for American Progress wants the government to create some four million jobs — home-care workers, teacher aides, EMTs, and so on — paying a "living wage" of around $36,000 a year. Over a decade, the plan would cost some $2 trillion, based on CAP estimates. The point of this jobs guarantee would be to "counter the effects of reduced bargaining power, technical change, globalization, and the Great Recession." Jeff Spross, my colleague here at The Week, argues that such a jobs guarantee could even be married to the other popular idea in liberal wonkdom: the universal basic income.
The two ideas have a lot in common. Both are big, sweeping proposals — something the cautious Hillary Clinton campaign failed to provide. Both have a simple, straightforward elegance. In the case of a universal basic income, government cuts everyone a check. In the case of a jobs guarantee, government supplies everyone a job. And both offer a happy ending to the modern economic scare story of robots taking all the jobs. Indeed, many job guarantee advocates hope the program would make Americans so comfortable with a much larger welfare state that a job guarantee would become a policy bridge to a UBI.
But the more you look at the idea of a jobs guarantee, the more it seems like a bridge to nowhere. There is nothing simple about it, and the plans so far offered provide loads more questions than answers. First, there's its novelty. This isn't a case where government would fund jobs in reaction to some one-off, severe economic shock — say, how the New Deal responded to the Great Depression. CAP wants a permanent plan with an arbitrary goal of "maintaining the employment rate for prime-age workers without a bachelor's degree at the 2000 level of 79 percent."
Little consideration is given to the fact that these permanent government gigs might, as economists say, "crowd out" existing jobs. The new jobs might replace existing jobs, or jobs that would have been created anyway. Good luck figuring it out! As economist Adam Ozimek notes, the supposedly simple job guarantee might require Washington "in perpetuity" to "micromanage the number of employees at these firms and local government entities." And people who already have jobs might flock to government-guaranteed jobs — especially if they can't be fired from them.
Obviously, in an ideal world we would aspire to providing paying work to everyone who wants it. But the arbitrary, bloated, and (probably) ineffective plans of progressive think tanks are not the way to achieve this goal.
There seems to be an assumption among many left-wing activists that mass unemployment is a given without government intervention. Maybe they're right. Yet it seems just as reasonable to suppose history will echo, and with smart public policy, our era's booming tech progress will be broadly beneficial for American workers. As tech entrepreneur Steve Case recently told Politico, "Before we jump to a defeatist attitude about a jobless future, why don't we take a shot at actually creating a bunch of jobs?"
Exactly. Let's work harder at creating productive, interesting jobs for the next generation of robots to take. And then more new jobs after that. More innovation and better education are really the only true guaranteed jobs program for America.