Jobs for everyone: What is universal employment? - JobAdvisor : JOB SEARCHING , CAREER ADVICE

Monday, April 16, 2018

Jobs for everyone: What is universal employment?

Since the recession officially ended more than five years ago, many of the gains in employment, income and wealth have failed to circulate through the entire economy.
It's getting less controversial to suggest that everyone should have a job.
For years, two ideas have percolated among the farther reaches of the American left. The first, a universal minimum income, can stretch its roots back to Martin Luther King and earlier (arguably the 16th Century). The second is a twist on that formula, a universal jobs guarantee.

It's exactly what it sounds like. Everyone who wants a job gets a job, with health care, retirement benefits and a paycheck sufficient to put a roof over their head and food on the table. Those jobs would differ based on need and skill, but whether through direct hiring or third party contract the government would guarantee that anyone willing to work would get it.
Democrats first started to line up behind this idea during the New Deal. The Roosevelt Administration used its so-called Alphabet Agencies, and in particular the Work Projects Administration, to employ vast numbers of Americans who needed work.
The theory was simple: The government can create an endless series of safety net and welfare programs to help someone in poverty, or it can simply give that person a job. Despite losing its popularity during the 20th Century, that logic has begun to return in force today. Institutions as credentialed as the left-leaning Center for American Progress and the centrist Center on Budget and Policy Priorities have begun to look seriously at whether a jobs guarantee could actually work.
The answer is … maybe.
Practicability
A major challenge to any jobs program would be implementation. A modern WPA would need offices that someone could visit and jobs sites at which they could work, and it would have to reach every American from Supai, Ariz., to downtown Manhattan.
For most Americans this wouldn't be such a daunting task. Americans in cities and suburbs are relatively accessible. Even despite weak public transportation outside of metro areas, most people can find their way to a government office at need. Reaching rural Americans, where the need is greatest, is considerably more difficult.
Not impossible, though. In fact, when it comes to operating a string of government offices capable of delivering services to the most far-flung of citizens … it's been done before. Again and again.
This is not to dismiss the logistical difficulties in creating a jobs program. It is, however, to say that this is not a problem without solution, particularly in an era where internet access reduces the barriers to program administration and with rural infrastructure needs approaching critical.
Labor Market Impact
The biggest point that advocates push is also the most complicated. A jobs guarantee would profoundly impact the U.S. labor market, not entirely predictably.
First, it would eliminate involuntary unemployment. In today's deeply distorted labor market, one quietly dominated by underemployment and low labor force participation, that would be a sea change.
Ending involuntary unemployment would eliminate the gap between the haves and have-nots in our 4% unemployment economy. Many minorities, poorly educated and rural Americans suffer far higher rates of unemployment than increasingly optimistic economic coverage suggests. A universal guarantee would cover everyone, leaving behind no one to become a hidden statistic.
Second, a job guarantee would set the lower bound in wages, benefits and working conditions.
While minimum- and living-wage laws have historically been implemented to place a floor in the labor market, they fail to provide viable pathways to employment or out of poverty for those looking for work but unable to obtain employment in the first place. The job guarantee would function as a de facto floor in the labor market, greatly increasing the bargaining position of workers throughout the economy. For private employers to attract employees, they would have to offer a job that is at least as good as the one offered by the government.
Labor regulation, while not irrelevant, would grow less complicated for a simple market principle: Every employer in America would have to compete with the WPA, and every worker would have leverage and bargaining power like they've never had before.
Imagine sitting in an interview thinking, "no matter what, I've got an option."
Of course, that's also the problem.
Much like a minimum wage, a jobs guarantee would create a minimum cost to doing business in the United States. In this case, however, it would be considerably higher because every employer in America would have to compete with the WPA.
Just to use the numbers suggested by the CBPP, that means paying more than $24,600 in wages, plus insurance, retirement and other benefits for every full-time job in America.
Would that be enough in San Francisco? Would it bankrupt a hardware store in Traverse City? Could someone run a greasy spoon diner having to pay that for every cook on the flat-top grill? How much more would it cost to hire farm hands, lawyers, party clowns and other widely hated jobs if those workers know that, even if at the cost of a pay cut, they could still live secure lives and not hate their day to day?
A jobs guarantee would set the floor for all jobs in America, big or small. Whatever minimum it offered would be the minimum by which every employer would have to abide.
That's not necessarily a bad thing. There should be a minimum. No civilized economy should function on the idea that some people's lives will simply suck. On the other hand, no economy can function if every moving piece costs too much. Labor market impact isn't a reason that a jobs guarantee can't work, in fact, it's the chief feature of the program, but it would need to be handled very carefully.
Cost
This is where most critics make their chief argument against a jobs guarantee.
"The universal jobs guarantee, much like the universal income guarantee (or universal basic income), is like communism. It sounds great in theory but is a disaster in practice," wrote Stanford professor of economics Nicholas Bloom.
Among other issues, he said, it would be cripplingly expensive.
"We are already at a record deficit and widescale job or income guarantees that would have any noticeable impact could cost 2 percent to 4 percent of GDP," he said. "This could push us to war-time levels of deficits. It's not impossible to borrow this much money, but to do so in peacetime would be unprecedented."
"Government support is great in times of severe recession," he added, "like 2008 or the 1930s, but not in a period of massive booms."
The program would cost an enormous amount. If the government gave a job to every one of the 6.7 million people currently unemployed (that is, looking but unable to secure a job), and if they each got the CBPP's $24,600 per year, it would cost approximately $164 billion in wages alone over a 10-year period. Administrative overhead, if consistent with other government programs of similar scope, could add perhaps 5 percent to that figure.
There is no question that's a vast sum. As the Center for American Progress pointed out, however, it's almost trivial compared to the government's recent expenditures on tax cuts.
While a jobs program could spend more than $160 billion during a 10-year period, the recent package of Republican tax cuts cost $1.5 trillion. That number may go as high as $2.3 trillion according to the Donald Trump administration.
In other words, for all the expense, the government could ensure every single American a good job and a stable future for approximately a tenth of what it just spent on high-end and corporate tax cuts.