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A Job Guarantee Costs Far Less Than Unemployment

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tags: economic history, Great Depression, New Deal, WPA, full employment, Job Guarantee



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The current moment calls for bold thinking of the kind that the United States hasn’t dared since the New Deal. Roosevelt responded to the economic calamity of his time—the Great Depression and a second, devastating world war—with far-reaching economic policies and a call for what he named a Second Bill of Rights, designed to procure basic economic security for all people at all times. Chief among the rights he enumerated was the right to a job. Today, a proposal for a federal job guarantee, grounded in the same logic, holds particular promise for the nation’s recovery.

The job guarantee is a public option for jobs: a permanent, federally funded but locally administered program that would provide voluntary public-service employment opportunities at living wages to anyone looking for such work. The ambition to secure the right to work for all people through policy is not new. The Universal Declaration of Human Rights affirms the right to employment, a right that is etched into many nations’ constitutions but whose mandate remains unmet. Civil rights leaders in the United States, including Martin Luther King, Jr., and Coretta Scott King, made the right to work a signature issue on the grounds that securing it would help remove economic insecurity as a tool of racial subjugation. The architects of the Employment Act of 1946 and the Full Employment and Balanced Growth Act of 1978 tried, but ultimately failed, to secure such a right with policy and legislation. Today, it has become a pillar of the Green New Deal.

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THERE IS NO MINIMUM WAGE WITHOUT WORK

In a few short years (1933–38), Roosevelt implemented policies that were truly transformative at the time. Imagine a United States without minimum wages, mandated days of rest, collective bargaining, unemployment insurance, and Social Security. But the country endorsed no guaranteed right to decent employment for all, and so its early labor laws were built on weak foundations. The threat of the sack loomed in every negotiation between unions and firms. Employers could easily outsource jobs and hire cheap migrant labor. Job insecurity broke the postwar social contract, eroded workplace solidarity, and helped bust unions, as firms held the threat of unemployment over their workers as a powerful cudgel. 

Conventional wisdom accepts unemployment as the inevitable collateral damage of economic fluctuations, trade, and shocks, such as pandemics and financial crises. But the social costs of this status quo are staggering. The unemployed often endure permanent loss of income, physical and mental health problems, and increased mortality. Their spouses and children suffer reduced health and educational prospects. Crime, homelessness, recidivism, and political instability are strongly correlated with unemployment. The job guarantee would prevent many of these outcomes and provide a minimum labor standard for all jobs, including a robust wage floor.

The road to establishing a labor standard has been long. When Roosevelt called on Frances Perkins to serve as Labor Secretary, she agreed on the condition that he support a federal minimum wage, a reduction in the workweek, and a revitalized public-service employment program (among other groundbreaking pieces of legislation). The 40-hour workweek she helped pass was a compromise: a very popular earlier bill for 30 hours had been narrowly defeated. The minimum wage she fought for did not extend to all workers, and over the intervening decades, it has in any case failed to keep pace with the cost of living. More than 40 percent of working people in the United States earn less than $15 an hour, and a campaign to raise the minimum wage has made slow progress in state legislatures.

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Read entire article at Foreign Affairs

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