The Federal Job Guarantee - A Policy to Achieve Permanent Full Employment March 9, 2018 Mark Paul, William Darity, Jr., and Darrick Hamilton
At today's relatively low unemployment rate of 4.1 percent (January, 2018), 6.7 million workers remain unemployed, an additional 5 million are working part-time though they would prefer full-time work, and job seekers still substantially outnumber job openings. Moreover, this aggregate picture masks the fact that unemployment does not affect all workers equally. Historical unemployment data highlight the persistent trend of discriminatory labor market practices that result in substantially higher unemployment rates for some social groups. For instance, black workers routinely face an unemployment rate that is roughly twice that of white workers, even after controlling for educational attainment. There is recent evidence that narrowing of the racial unemployment gap occurs as the labor market tightens, but these gaps may be exacerbated during economic downturns.
A job guarantee would fundamentally transform the current labor market in the United States. Our current conception of full employment is inadequate; we discuss a bold policy in this paper to bring the United States to a permanent, more accurate indicator of full employment—by which we mean that everyone who seeks a job can find one at non-poverty wages. Beyond providing full employment, the job guarantee could be a turning point for American workers. Workers are faced with stagnating real wages and a continued erosion of labor's share of income. The job guarantee could significantly alter the current power dynamics between labor and capital—particularly for low-wage workers and traditionally marginalized groups.
Benefits of the program reach beyond those directly employed under the NIEC. If a job guarantee were to be implemented, it also would function as a de facto employment floor in the labor market. Private employers would have to offer wages and benefits that are at least competitive with the NIEC in order to attract workers. The universal nature of the program would ensure jobs for all—including those with some forms of disability who may not be employed through the private sector. The universal design is critical to ending working poverty and involuntary unemployment; this is in contrast to other forms of intervention in the labor market, such as minimum wage laws, which do not ensure access to employment in the first place. Nevertheless, complementary changes to the existing social insurance system would be necessary to eliminate poverty entirely, as some individuals may be unable to work for various reasons.
Despite the discussion of full employment as a national priority for nearly a century now, policymakers have failed to deliver an economy that prioritized employment for all. Full employment is a goal that the private market in unable to achieve, therefore requiring government intervention in the labor market. Above, we discuss a transformative policy proposal—a federal job guarantee—whereby the government engages in the direct hiring of workers at non-poverty wages to achieve, and maintain, a full employment economy. Whether or not policymakers agree with the specifics we suggest in our proposal, we encourage them to think about bold solutions to achieve and maintain full employment. Restructuring our public policies to eradicate involuntary unemployment and poverty is within our reach.
Senator Bernie Sanders will hold a televised town hall on March 19th to address the issue of economic inequality. Tune in live as Milano Professor of Economics and Urban Policy, Darrick Hamilton joins Sen. Bernie Sanders, Sen. Elizabeth Warren (D-Mass), and filmmaker Michael Moore on the four-person panel.
"The town hall, called "Inequality in America: The Rise of Oligarchy and Collapse of the Middle Class," will take place from 7 to 8:30 pm ET before a live audience in the auditorium of the U.S. Capitol. It will be broadcast online with the help of the event's digital media partners, The Guardian, NowThis, The Young Turks and ." – HuffPost
National Jobs for All Coalition
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