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3. How much will the program cost?
The JG program is a separate program that pays a living wage. It is not tied to other anti-poverty programs and does not require people to work for their benefits. When a person opts to take the JG job, they will no longer receive unemployment insurance (UI) or other anti-poverty assistance, thereby reducing spending on these programs. As above, a generous JG program that employs between 11.16 million people at $15 per hour plus benefits will result in a net expenditure of 0.8 percent to 2 percent of GDP (Fullwiler forthcoming). These estimates include expected reductions in spending on other programs such as UI, Medicaid, and earned income tax credits (EITC).
However, these estimates are based on very conservative assumptions regarding potential savings on a wide range of other federal, state, and local programs that are targeted to lowincome households. In 2015, for example, the federal government spent $104 billion on food and nutritional service programs, including $74 billion for the Supplemental Nutrition Assistance Program (SNAP), $21 billion for Child Nutrition, $6 billion for the Women, Infants, and Children program (WIC), $17.3 billion on Temporary Assistance to Needy Families (TANF), $50 billion in housing assistance, and $64 billion on EITC, to name some of the main anti-poverty expenditures. Additionally, total direct spending by states for social services and income maintenance for those on public welfare was $505 billion (this does not include spending on health, policing, or corrections). Research indicates that most social problems.from homelessness and child malnourishment, to mental and physical health problems, to certain types of crime.are connected in one way or another to unemployment. For example, the average cost of incarceration in the United States is $35,000 per year per inmate, which is slightly below the $37,440 in wages and benefits that the JG provides. In New York State, the cost is $75,000 per inmate.the equivalent of two JG jobs. And in New York City, it is $169,000 per inmate per year, or equal to four-and-a-half livingwage JG jobs. Many of those who are behind bars for economic reasons (i.e., related to the absence of stable well-paid jobs and the associated pathologies unemployment creates) would be better served by taking up a JG job instead. Thus the federal JG program will also be a boon to state finances, causing large-scale savings on incarceration and other anti-poverty measures. All of these savings are not estimated in the cost calculations above. A more elaborate model will be needed to estimate the reduction in medical expenditures, incarceration costs, and other anti-poverty measures, as well as the positive social multipliers and growth that would result from implementing a JG. It is conceivable that if we included all social and economic benefits.including reductions in poverty, indebtedness, crime and incarceration, and improvements to physical and mental health.the impact on the federal government budget would be far less (and the positive impact on state budgets would be larger) than what we are reporting in Dantas, Fullwiler, Kelton, Tcherneva, and Wray (forthcoming). Finally, it is important to note that the real costs of unemployment (in terms of wasted human and physical resources, forgone output, poverty, and other social ills) are the real burden on our communities and future generations.a burden that we already carry. We are already “paying” for unemployment. In financial and real terms, the costs of unemployment today outweigh the financial and real costs of running a JG.
4. Who will pay for the program?
The program will be federally funded but locally administered. Only the federal government has the capacity to design a countercyclical budget that floats with changes in unemployment. See the discussion in section VI.5 (“Program Budget and Funding Mechanism”).
5. Who will administer the program?
The program is funded by the Department of Labor (DOL) but is locally administered and managed by states, municipalities, One-Stop Job Centers, nonprofits, and social entrepreneurial ventures (see section VI.6, “Administrative Agencies and Project-Executing Organizations”). The goal is to match individual community needs with unemployed resources. A bottom-up approach of management and administration combined with participatory decision-making and budgeting will enhance program effectiveness.
6. Wouldn’t the JG create massive new administration and bureaucracy?
The program is designed to use existing administrative structures as much as possible.One- Stop Job Centers, nonprofits, and municipalities. As discussed in section VI.5, the program can use the same funding channels, currently used to pay UI. It is further proposed that existing unemployment offices (i.e., One-Stop Job Centers) are converted into genuine repositories for work projects.
Since the JG is under a new agency with new program objectives, some additional administrative apparatus will need to be created.a challenge that’s not unique to the JG program, as all essential government programs require administration and management. However, when a person chooses to enroll in the JG, they do not take up some other types of social assistance. Thus any increase in administrative costs of the JG will in part be offset by reduction in administrative costs of other programs. And since we are concerned with the net employment effect of these changes, should the JG produce a net increase in administration and management, it would also mean a net increase in employment.
7. Where will the jobs be?
The jobs are in close proximity to the unemployed. The JG takes the contract to the worker. A targeted approach means that the greatest number of jobs are created in the areas with highest unemployment rates. Since unemployment directly and indirectly causes or exacerbates various social problems, these are also the areas with the greatest number of other social deprivations. It is important that the jobs are in close proximity to the unemployed, to allow the JG to help fill those social-needs gaps and serve as a program that inoculates against other social ills.
8. What types of jobs will the JG workers do?
The JG can be designed as a “National Care Act” that addresses the environmental and care needs of communities across the United States. The program can act as a preparedness response, providing jobs to the unemployed on-demand in monitoring, rehabilitation, and investment projects that serve the public good. The JG is a crucial step toward answering FDR’s call for an Economic Bill of Rights, which means that social, economic, and environmental justice are at the heart of the program. Thus, the JG can take the form of a Green New Deal that prioritizes disaster prevention and preparedness, community renewal, and food desert relief, to name a few. It will support the arts by providing music, theater, and other art initiatives. It will offer youth apprenticeship programs, child and elder care, and special needs programs for veterans, at-risk youth, and former inmates. For details and examples, see section VI.7 (“Types of Jobs: ’National Care Act’”).
9. Wouldn’t the JG displace existing forms of public sector work?
The JG is authorized as a new program, under a new agency. Its primary objective is to provide work to the unemployed at a living wage in projects that enhance the public purpose. As a new program, the JG aims not to replace existing public sector work. In other words, the Food and Drug Administration cannot lay off its food and drug inspectors and transfer them onto the JG payrolls. A library or a school cannot lay off its librarians and teachers and rehire them through the JG. However, because the JG aims to enhance the public purpose, it can provide teachers’ aides to alleviate the burdens teachers face in the classroom. It can also offer and staff activities before and after school that currently do not exist in the school curriculum. If it becomes evident that these teachers’ aides are much needed and must be staffed on an ongoing basis, they should be transitioned out of the JG program and moved to traditional school district employment.
10. How do we distinguish between regular public sector work and JG jobs?
See question 9. While the JG has a noncompeting clause (i.e., it is not supposed to do work that is currently being done by the private sector, nor should it displace public sector employees), it has to be recognized that there will always be some overlap in the type of work done by the three sectors (private, public, nonprofit). For example, landscaping and garbage collection are done by municipalities, private firms, and nonprofits alike. Yet there are many public spaces that still require mass cleanup and rehabilitation, either because private firms have no profit incentive to do it or because municipalities and nonprofits do not have the financial resources to address those needs. The JG can serve as a complementary program that employs people to work in environmental cleanup and rehabilitation projects.
11. Can we place JG workers with private contractors?
As a rule, no, but this is subject to some exceptions. Since the JG’s primary objective is to provide jobs to the unemployed on-demand by enhancing the public purpose, private firms will not be acting as project-executing organizations. The JG helps fill the needs gaps in the community by liaising with public sector and nonprofit institutions alike and is not run as a for-profit program. However, apprenticeship programs can be designed in cooperation with private firms to help young men and women gain specific technical skills and transition into these types of private sector jobs.
12. Why do you say that the JG wage is the effective minimum wage and labor standard for the economy?
The JG serves the function as a “public option for work” because it is open to all, irrespective of income or labor market status. Whatever work and pay conditions it offers will become the standard for the economy as a whole. Under special circumstances someone may prefer lowerpaid private sector work, but as a rule the proposed JG wage ($15 per hour, plus benefits) will become the effective minimum wage. There is some empirical evidence that illustrates this effect (Tcherneva 2013). The JG strengthens a family’s working options. Why juggle two part-time jobs under duress to make ends meet if there is a well-paid, full-time JG work opportunity. Furthermore, because some of the benefits the JG provides are very popular (e.g., guaranteed health insurance), many people may flock to the program to get them. If firms wish to retain these workers, they will need to match not just the pay, but also the benefits and working conditions that the JG establishes. There is an important argument to be made in support of providing universal healthcare (and other benefits), irrespective of one’s employment status. But in the absence of such a policy, incorporating health benefits into the JG wage-benefit packages is an expedient way of achieving near-universal coverage. Whatever wages and benefits the JG provides will be the minimum standard for the pay conditions throughout the economy.
13. Why do you say that this program is a better countercyclical stabilizer?
When the economy enters a recession (on average, every seven years in the United States), firms lay off workers en masse. Government spending automatically increases, including on UI, TANF, and other anti-poverty programs. Other government programs attempt to grow the economy, such as tax or interest rate cuts, and subsidies or other incentives to private firms. While government spending always increases countercyclically in recessions, since the 1980s it has failed to produce strong job growth in recoveries. Jobless recoveries have become the norm. With the JG in place, as companies lay off workers in recessions, these same workers can transition directly to the JG. Without the JG, they face uncertain prospects of finding another job, and the meager unemployment assistance they receive ensures that they will curb their spending.they skip shopping trips, restaurant outings, or going to the movies. That ripple effect results in additional laid off workers.servers, cash register operators, movie ticket attendants, and many more. In a sense, one unemployed person throws another one out of work. The JG stops and prevents this vicious cycle. When private employment shrinks and workers are laid off, they transition into the JG. The increase in government expenditure on hiring those workers is the very stimulus the economy and the private sector need to recover from the depths of a recession. Spending patterns are much more stable when someone gets a job (as compared to UI) and the avalanche effect of layoffs is contained. As the economy begins to grow, those workers return to their old jobs or to other better-paying employment opportunities. The program shrinks as the economy expands. Thus the program is a countercyclical buffer, a complement to private sector activity. It expands in recessions and contracts in expansions, thus providing the needed countercyclical stabilization. It is superior to current stabilization methods, because it does not use the unemployed to stabilize growth and inflation, and thus drastically reduces the existing costs of unemployment (see question 15). It makes jobless recoveries a thing of the past by securing true full employment over the long run.in good times or bad.
14. Why is this program sometimes called buffer stock employment?
See question 13. A buffer stock program is one that stabilizes the price of a commodity by selling it when its price is rising and buying it when its price is falling. For example, governments around the world run various full or quasi-buffer stock programs for commodities. In the United States, Section 32 of the Agriculture Act of 1935 authorized the government to purchase the surplus production of various farm commodities. Today the US Department of Agriculture continues to run direct and countercyclical payment programs for eligible commodities. These programs have the effect of ensuring that the price of these commodities never falls below the government-administered price, meaning that the commodities themselves are in a sense “fully employed.” And while we do it for commodities, we do not do it for labor. The JG is that policy. It buys (hires) the surplus labor (the unemployed) at a fixed price (the base wage), ensuring it is fully employed. When private demand for workers increases, the JG buffer stock shrinks as people transition to private sector employment. The analogy with farm commodities may be unpalatable, but the macroeconomic mechanism is very similar. For obvious reasons, it is more important to maintain the price and full employment of labor than of soybeans.
15. Why do you say that the JG has a superior anti-inflationary mechanism?
There are only two buffer stock options with respect to inflation control. Either we allow the pool of the unemployed to expand and shrink with changes in economic activity (the status quo), or we devise a long-run program to directly employ the unemployed that does the same. Currently the Federal Reserve uses unemployment to control inflation. The non-accelerating inflation rate of unemployment (NAIRU) is the benchmark policy guide for deciding when to step on the brakes and slow down economic growth. If the Fed deems that the pool of the unemployed has shrunk to “undesirable” levels (put simply, that too many people have jobs), it increases interest rates with the intent to slow down purchasing power, increase unemployment, and thus remove any inflationary pressures that may result from too many people having jobs and income. This, as the late Nobel Prize.winning economist William Vickrey argued, is the equivalent of economic vandalism. By contrast the JG expands in recessions (deflationary periods) and contracts in expansions (inflationary periods), serving the exact same function of responding anti-cyclically to changes in aggregate demand that the NAIRU is supposed to serve, except it does it by establishing an above-poverty wage floor, providing jobs for all who need them, producing socially useful output, and reducing the outsized costs of unemployment.
16. Is the JG a substitute for other fiscal or monetary policies?
No. See questions 13, 14, and 15. Fiscal or monetary policies are required for other policy objectives, but the JG is a powerful macroeconomic policy tool. It obviates the need for fiscal or monetary fine-tuning that maintains a given unemployment buffer stock and replaces them with an employment buffer stock policy. However, to achieve other goals.such as strategic investments, better income distribution, comprehensive inflation management, financial stability, etc..different monetary and fiscal policies would be needed.
17. Why implement a JG?
Why not simply add work requirements to existing benefits programs like TANF, SNAP, or, as has been recently proposed, Medicaid? As discussed above, unemployment is a persistent problem. There are more people who want jobs than there are jobs available, even in the best of times. Requiring people to work for their benefits is a cruel game of musical chairs. And since the government has already placed work requirements on some social benefits, it is also incumbent on the government to guarantee those job opportunities. In the current policy context the JG is mandatory. Since the JG offers decent work at decent pay and is open to all, it is a very appealing alternative to existing punitive welfare policies, as it lifts families out of poverty and removes the necessity of applying for these programs.
18. Isn’t the JG just a workfare program?
No. See question 17. The program is based on the principle of “fair work” not “workfare.” It does not require people to work for their benefits. It is instead an alternative to existing workfare programs. The JG is “fair work” in the sense that it provides a fair opportunity to any person to secure decent, well-paid employment. It not only provides the needed employment safety net, but also changes the very macroeconomic conditions that people face as they search for a better life. A JG meets the call of the United Nation’s Universal Declaration of Human Rights and FDR’s Economic Bill of Rights by recognizing that the access to decent work is a basic human right and a precondition to social and economic justice.
19. Aren’t JG jobs just “make work”?
No. Direct employment programs around the world demonstrate that it is not difficult to find “useful things” to do. These programs have strong positive effects on people, communities, and the environment. For the lasting impact of direct job creation in the United States, refer to this map: https://livingnewdeal.org/map/. While some public projects may fail, as is also the case in the private sector, in general public job creation programs tend to be successful and popular. Not only do these programs fill important needs gaps and make a material impact on communities and peoples’ lives, but they also empower. The JG removes the existing threat of unemployment, which private firms use in their hiring practices. The JG puts upward pressure on wages at the bottom of the income distribution. It also provides opportunities for cooperative work arrangements. It can socialize some forms of production that are done for profit and demonstrates that people are capable of running and organizing their communities on their own. Therefore, the challenge these programs face is not that there aren’t enough useful things to do, or that they will create make-work projects. The challenge is that, because of their effectiveness, they tend to run against private interests, which then mobilize and exert considerable outside pressure to underfund and privatize them.a challenge that is serious, though not insurmountable (see question 47).
20. You have proposed a nonprofit/social entrepreneurial model for the JG (Tcherneva 2014).
How can you be sure that enough projects will be proposed by nongovernmental organizations (NGOs) and social-entrepreneurial ventures (SEVs) to provide work for all? The JG works as a hybrid program that uses the best practices established by states and localities, NGOs, SEVs, and other public institutions. The DOL and Community Jobs Banks can solicit projects from NGOs, SEVs, and municipal governments, but the final responsibility that enough projects have been solicited and/or designed rests with the new DOL agency created to manage the program. The DOL will provide guidelines and directives to localities to create enough work for all. The unemployed would register with the One-Stop Job Centers and indicate whether they would like to get UI or to enroll in the JG. If they prefer the work opportunity, they will not qualify for UI. The One-Stop Job Centers are responsible for providing all types of work to the unemployed. If there are private job openings, they can try to place the unemployed there, or in other traditional nonprofit or public sector work. But if those opportunities are in short supply, the One-Stop Job Centers will also serve as public job banks that will present the unemployed with several public work options provided though the JG program. The public job banks will already have an arrangement with local schools, libraries, nursing homes, environmental groups, and other community organizations to accept newly unemployed people as trainees, where they can shadow teachers, coaches, nurses, and librarians and assist them with ongoing work until such time when a more appropriate work opportunity may be found for them. If local project-executing organizations are unaware that there are many more locally unemployed people who need work than the projects they have proposed and designed, it will be the responsibility of the local One-Stop Job Centers to reach out to various local providers and, in cooperation with the municipality, initiate new projects. This is one blueprint for the program’s implementation. Some trial and error, experimentation, and ongoing improvements will be necessary for the program’s long-run success. This program design achieves true full employment, as per Beveridge’s (1944) definition, ensuring that there are “always more vacant jobs than unemployed men [sic], not slightly fewer jobs.”
21. Who is the employer of record?
The project-executing organizations, i.e., municipalities, localities, local nonprofits, and SEVs. The DOL approves the projects and disburses the payments, as it currently does with UI. If JG workers were classified as federal employees, that would require additional new legislation to allow the new agency to hire millions of people into the program. For this reason, it is proposed that the program is federally funded, but locally administered.
22. If an NGO hires JG workers along with other NGO workers, who decides whose wages will be paid by the government?
When project-executing organizations apply for the program and request funding and staffing for new projects, they will need to demonstrate that they are not displacing existing projects or workers. This is a standard practice when firms or organizations get government contracts. One challenge for these employers will be the level of the JG wage. The proposed JG wage is $15 per hour plus benefits, while an NGO may pay some of its workers $10 per hour or the federal minimum wage. Thus the NGO will be pressured to raise the wages of their existing employees to match the pay of the JG workers. This is a one-time wage shift that one would expect to occur throughout the economy as a result of implementing the JG. It will impact not just the hiring NGOs, but also private firms and public institutions that pay under $15 per hour. This wage effect is a feature rather than a bug of the program. How disruptive it ends up being for these employers would depend on how the JG is phased in. The goal is to establish an effective minimum living wage floor. Note that, had the minimum wage kept pace with increased worker productivity, it would have been more than $19 per hour in 2017 (Economic Policy Institute 2017).
23. What if the JG workers are doing very important work and it is unwise to let them go?
That people move in and out of jobs (private or public) is not a new phenomenon. The JG is expected to improve people’s ability to find employment opportunities, because they are not trapped in forced idleness (unemployment). If we find that some JG projects are absolutely crucial and cannot afford to lose workers, these workers can be moved out of the JG program and incorporated into conventional public sector programs that pay higher wages to retain them.
24. What if people do not wish to exit the JG program?
It is possible that some people will find the local, living-wage community job to be their dream job. The JG welcomes them. This may prompt a reclassification of some of these jobs as permanent public service jobs if they continue to serve the public purpose. Suppose that community gardens become an indispensable part of an urban landscape. They may be transitioned to a different program or agency that permanently funds them. Even in this case, community gardens can still serve as project-executing organizations, providing jobs to the unemployed and hiring additional JG workers. Suppose that other people wish to exit but are having difficulty transitioning to private sector work. The JG will provide them with additional training and education resources, apprenticeship opportunities, and private sector job placement programs.
25. The needs of the structurally vs. cyclically unemployed are different. Can the JG really create jobs quickly for all?
From the point of view of the unemployed, it makes no difference if one is structurally or cyclically unemployed. For the architects of the JG program, this distinction may make some sense, though there is considerable overlap between the two categories.many who are laid off during recessions increasingly find it difficult to secure work in recoveries and eventually become structurally and long-term unemployed. The JG is designed with the person and their needs in mind, thus with respect to the actual operation of the JG, there are several different considerations. For example, especially soon after program launch, some of the unemployed may fail to enroll in the JG because they are unfamiliar with the program. It is the responsibility of the One-Stop Job Centers (aka, the unemployment offices) to provide the needed information and a menu of job options. Second, once people enter the program, they may have trouble transitioning out of it, either because they were previously unemployed for a long period of time or because they face other barriers to private sector employment. The JG will be tasked with assisting them with this transition, so that people do not end up staying in the program longer than they hoped for. Yet others may prefer the JG job option to any other alternatives. The JG welcomes them (see question 25). Finally, if the cyclically unemployed want to enter or exit the JG quickly, they can be placed in jobs that do not cause significant disruption to the work being done. For example, such nondisruptive work could include shadowing teachers, nurses, or librarians or joining ongoing small infrastructure, rehabilitation, or green projects that can easily accommodate extra workers, but will not be shut down if some of them leave. Again, the ability to absorb or shed employees is not a unique challenge for the JG. Indeed every labor market segment within the private, nonprofit, or public sectors deals with new entrants and job leavers on an ongoing basis. Once the program is in place and has become well-known, cyclically, structurally, or seasonally unemployed individuals may want to avail themselves of the program on regular basis. The program will accommodate them because the JG is designed as a preparedness response to joblessness, with preapproved shelved projects and agencies that could execute them should there be a sudden increase in demand for jobs.
26. Can JG workers be fired?
Yes. People are paid to work. If they do not show up to work, they will not collect a check. If they threaten the safety of others, they will be let go. However, when considering this question, it is important to note that the JG is not run for profit. It produces public goods and services. The program’s success and individual performance in the program will not be judged by private sector “efficiency criteria.” Its reason for existence is fundamentally different.it is to fit jobs to people; to serve the needs of the environment, community, and people; and to enhance the public good. Its purpose is not to minimize costs and maximize profit. Therefore what constitutes nonperformance in the JG will differ greatly from that of a private firm. A person cannot be fired for doing work that is considered “not profitable.” They can be let go for nonperformance, as defined above (e.g., not showing up or safety concerns), but only after they have been mentored and provided ample assistance to be successful on the job. Because the JG fits jobs to the person, it may be that “the match” is not a good one. Then, every effort will be made to move that person to another work opportunity where they can be successful. If external factors impede one’s ability to hold onto their JG job.drug or alcohol abuse for example.they can be referred to the necessary rehabilitation programs, which can be provided through the JG itself. The JG is a step toward a more holistic approach to addressing the multiple deprivations many families face. The point of the JG is to help enhance the public purpose. One component of that public purpose is to find a mechanism for anyone who wants to work to be able to perform and benefit from the JG job.
27. How do you judge program success?
The first criterion of success is whether the program has provided work for all who have shown up to ask for a job at the One-Stop Job Center. Second, has this work been suitable for them, and has it offered training, education, or apprenticeship opportunities (as needed)? Third, have jobs filled specific community needs? How many abandoned lots have been cleaned up and rehabilitated? Has the JG program helped reduce the food desert problem in the United States? Has it used sustainable agriculture practices? Has it supplied enough quality afterschool activities and care for the elderly? Other efforts will be measured strictly by technical criteria. Have soil erosion and fire prevention methods followed best practices? Has there been sufficient progress made on levee construction/fortification? Program success is again measured by fulfilling public purpose objectives.
28. If you can fire people from the program, then the threat of unemployment is not eliminated?
The existing threat of unemployment is eliminated. The JG fundamentally changes the way the labor market works. Tight full employment is secured, a base wage is firmly established, and the existence of a public employment option changes the bargaining power of workers in the most precarious forms of employment.those at the bottom of the income distribution. Not only is mass joblessness a thing of the past, but conditions in the private sector change, as firms must (at a minimum) match conditions offered by the public option in terms of wages and benefits.
29. If you can fire people from the program, then it is not a true JG, is it?
Of course it is. We guarantee access to a public library to everyone. There may be some circumstances when a person is asked to leave the premises, but unless they threaten the public’s safety, they are not denied access to the public library the next time they show up. Another example is public education, which is guaranteed to all children. Sometimes students get into trouble and are suspended or expelled. As a matter of principle (though it can surely be improved upon in practice), we seek ways to help these students.we make referrals and find rehabilitation programs, or connect them with community liaisons and at-risk youth programs to help them stay in school and be successful. Again, while some kids fall through the cracks and much more is needed to help them, this is the principle that underpins public education.that it is guaranteed to all, and that everyone has the right to education. The same commitment governs most programs that guarantee other rights.not only the right to education and public libraries, but also to postal services, fire prevention, public safety, and security. The JG offers the same “guarantee.” It is an assurance that no one will be denied access to a job if they need it, just like no one can be denied a visit by the fire department in case of fire. As above, if someone wishes to work but is unable to do so because of mental health issues, for example, the program will look to connect them to other programs that are more appropriate to address that person’s needs. Separately, if individuals want to work but caregiving responsibilities or lack of suitable transportation prevent them from doing so, the JG will aim to alleviate these obstacles by making the appropriate investments.
30. What about people who do not want to work in the program?
This is a voluntary program. No one is required to work in it. Nonparticipants would still benefit from the program. People who are outside the labor market benefit from the enhanced public services. Those who only wish to work in the private sector still face better employment opportunities because the JG improves overall economic conditions. And if they cannot find suitable private sector work, they still have the option of enrolling in the JG or in other family and income support programs. As discussed above, the JG is not a panacea for all social ills. It is best understood as a program situated in a broader policy agenda that would strengthen the social wage and provide other universal benefits that are not dependent on one’s labor market status.
31. But isn’t this program prone to inefficiency, corruption, and abuse?
As above (see questions 26.28), the private sector efficiency criteria do not apply here. The question is: Are public schools, blood banks, libraries, and community health centers more prone to corruption, inefficiency, or abuse? Are farms, daycare centers, theaters, and fishmonitoring efforts uniquely susceptible to these problems? It is not clear that they are. Arguably, there are many private sector initiatives more prone to corruption and abuse than these examples.
32. Won’t the JG increase the size of government?
Not necessarily. Depending on the program’s impact on the social costs of unemployment, it could arguably even shrink government. Most people fear the financial costs of these programs. As discussed in question 1, they are still relatively modest given our bold assumptions about the size of the program: 0.8 percent to 2 percent of GDP. However, that number is rather meaningless unless it is compared to the social benefits derived from these programs. The JG does aim to increase the supply of public goods, while reducing the outsized social, economic, and political costs of unemployment. Second, our model indicates that it permanently increases GDP and private employment. Finally, the JG moves countercyclically.the stronger the economy, the smaller the program. It will swell in recessions, providing the countercyclical stabilizing force that restores private sector payrolls. As a consequence, the program shrinks with recoveries. As was discussed above (e.g., question 3), the real costs of unemployment are enormous and already paid for. The physical and financial resources US states dedicate to dealing with incarceration, poverty, poor health, and other social ills are already very large. If the JG has the preventative effects discussed above, it may in fact shrink the size of government and redirect the resources currently used for battling the social ills of unemployment towards the operation of the JG program. The JG is a “preventative” policy. It is in many ways “cheaper” in real and financial terms than the status quo. In terms of costs, we will do well to focus on the real costs and real benefits from implementing a JG and distinguish them from the financial costs and financial benefits. 33. People will just get stuck in the JG program and will never leave. The primary objective of the JG is to provide decent work opportunities to people who need them. As above, the size of the program will depend on the employment trends in the private sector and other government policies.
If someone wants work and has not found a job through the JG, then the program is “too small” relative to needs and should be expanded. But just like there are always some unemployed people at all phases of the business cycle, with the JG in place, there will always be some people who will be enrolled in the JG, even in the best of times.
34. Are you saying that the government should employ everyone?
No. (See questions 32, 33, and 35). The vast majority of employment is in the private sector. The JG does not change that. According to the Bureau of Labor Statistics, in January 2018, 85 percent of all working people were employed in the private sector (profit and nonprofit). The federal government employed only 2 percent of the total labor force; states and municipalities employed the remaining 13 percent. At the same time, the cost of unemployment burdens all, but is predominantly borne by the public sector. Under the boldest assumptions about the size of the program (see question 1), and depending on how the program is phased in, it is possible that the JG program employs, at its peak, about 10 percent of the labor force (that’s essentially equivalent to the existing amount of unemployment and underemployment). The workers would be distributed across states, localities, and nonprofits. In strong expansions, that number would be much smaller, as people transition to other forms of traditional private or public sector employment. The private sector will remain the primary engine of employment growth. Note that one way or another, unemployment is already “paid for,” so the JG simply ensures that we pay for employment and generate positive social value in the process.
35. Didn’t the former Soviet bloc have a JG? Isn’t that what you are proposing?
No, the JG is nothing of the sort. First, the JG operates in market conditions and serves as a complement to private sector employment (see buffer stock features in questions 14 and 34). The stronger the private sector labor market, the smaller the JG program. In the former Soviet bloc, under command economy conditions, the government served as the employer of first and (in many places) only resort. The JG by contrast is the employer of last resort and the federal government doesn’t normally do the actual hiring.
States, municipalities, nonprofits, and SEVs are the employers of record. The federal government only pays for the program. Depending on how the program is implemented and how employment in the private sector adjusts, the program would employ a small fraction of the population.
36. Seems like a daunting task. Can we phase it in and how?
Historical examples indicate large-scale employment programs can be launched in a short period of time and run quite effectively (see question 37). However, one way to phase in the JG is to implement a youth JG first (see examples of such programs in question 37). There have been many successful programs around the world that show the overwhelmingly positive results of direct employment programs for young people. Such a youth JG can serve as the pilot that can be expanded to different cohorts and eventually to everyone who is of legal working age and wishes to work.
37. Have there been programs we can learn from?
Yes. There have been countless direct employment programs around the world.small and large.that we can use as examples. Often these have been targeted or time-limited programs. For example, Argentina’s jobs program was implemented during the serious economic crisis in the early 2000s; it was phased out as the economy recovered. Similarly, the United States created the New Deal jobs programs during the Great Depression to deal with its employment crisis and, like Argentina, shut down those programs when economic conditions improved. On the other hand, over the past decade, India has been running a permanent JG program. Smaller programs, such as youth employment guarantees and programs for the homeless and exconvicts, also point to overwhelmingly positive results. The following is a brief discussion: a) Large-scale employment programs: Plan Jefes y Jefas, Argentina National Rural Employment Guarantee Act (NREGA), India New Deal, the United States b) Youth employment guarantees: Youth Incentive Entitlement Pilot Projects (YIEPP), the United States Future Jobs Fund, the United Kingdom c) Small direct employment programs, the United States Localized programs in distressed communities that serve the homeless and exconvicts a) Large Employment Programs in the United States and Abroad Around the world, there have been large-scale direct job creation initiatives that offer useful insights. Plan Jefes y Jefas in Argentina Argentina created the Plan Jefes y Jefas in the depths of the 2001 economic crisis. It guaranteed four hours of daily work paid at the minimum wage to an unemployed (male or female) head of household. While it was not a universal public service employment program, its significance lies in the fact that it was explicitly modeled after a public service employment proposal developed in the United States by researchers at the University of Missouri.Kansas City (aka, the employer of last resort). The program grew quickly to two million workers (5 percent of the population and 13 percent of the labor force participated) but it also shrunk as the economy recovered. Though the program was discontinued as the economy recovered, it exhibited key features of the JG proposal that were discussed above.it showed countercyclical features, the Jefes wage served as a base wage, it produced valuable public goods and services, and it had significant positive impact on the workers and their families, especially on marginalized communities and on women. Administration and institutional capacity were not obstacles to the program’s speedy launch and operation. The program was up and running within six months after it was signed into law. National Rural Employment Guarantee Act (NREGA) in India As discussed above, the JG is a permanent, universal program that provides jobs to all, in good times or bad. The program in India comes close to such a program. The NREGA guarantees at least 100 days of wage work to each household per year. The program enshrines the right to paid work into law.a right that has been written into the constitutions of many countries, inspired by the United Nations Declaration of Human Rights, though signatory countries have yet to meet that mandate. India’s program guarantees work by household only, not per individual.as in this JG proposal. Though the social and economic conditions of India are profoundly different from those in the United States, the significance of NREGA lies in the fact that it has created a rights-based framework for wage employment programs and has charged the government with the legal responsibility for providing employment to those who ask for it. NREGA, just like the JG, not only guarantees employment on demand, but also aims to create specific productive public assets in communities.wells, ponds, roads, parks, etc..and provide needed public services, like water conservation, horticulture, flood prevention, drought proofing, and other environmental projects. Apart from NREGA’s documented environmental benefits, the program has reduced the pay gap between men and women amongst the poor and has helped raise wages at the bottom for private sector workers. The New Deal in the United States In many ways, the New Deal invented the model of large-scale direct employment programs during the Great Depression. An estimated 13 million workers participated in the Works Progress Administration (WPA).the largest of the jobs programs. As Taylor (2009) argues, the WPA can be credited not only with providing income to its workers, but also with creating the infrastructure that supported the war effort as well as the postwar boom. Indeed, Taylor (2009) argues that the WPA brought the United States into the twentieth century. In the United States, the New Deal was up and running in four months and, as noted, Plan Jefes y Jefas was up and running in six months. These programs were similar in size (relative to the national populations) to the JG program proposed here. And while the JG deviates significantly from these large-scale employment programs, research into each of them has informed this proposal. b) Youth Employment Guarantees Experience with direct youth employment programs suggests that they bring important benefits to young people. Youth Incentive Entitlement Pilot Projects (YIEPP) in the United States In the United States from 1978 to 1980, the YIEPP guaranteed employment to 76,000 youth. In its short life, the program was especially successful in reducing youth unemployment rates, closing the employment-to-population gap between black and white youth, and improving their ability to transition to private sector employment opportunities. The largest and most drastic employment increases were observed among black youth. Program evaluation documents indicate that, once again, delivering the job guarantee was not stunted by administrative challenges. Indeed, despite some startup difficulties, the program boasted significant managerial success (Farkas et al. 1982). Future Jobs Fund in the United Kingdom A more recent youth employment program launched in 2009 in the United Kingdom, the Future Jobs Fund, demonstrated similar results. The program was exceptionally short lived, and was reformed into a workfare program in 2010.from an open-ended job guarantee for youth suffering from long-term unemployment to a punitive program that required them to work for their existing unemployment benefits. Before it was reformed, 43 percent of participants managed to transition to permanent employment within a year. The program enhanced young peoples’ specialized and transferrable skills, increased their employability, and enhanced public service work. The program was well targeted (85 percent of jobs created were taken up by 18. 24-year olds in long-term unemployment.the most disadvantaged group in the labor market in the United Kingdom) (Ali 2013). Program participants also spent less time on welfare compared to a comparison group. The National Institute of Economic and Social Research called it one of the most successful programs in recent history (Ali 2013). c) Small Direct Job-Creation Programs in the United States In the United States, the city of Albuquerque runs a program that gives jobs to the homeless. city vans pick them up from panhandling locations, drive them day jobs, and take them back to a nonprofit hospitality center that connects them with housing, employment, and mental health services. In less than a year since the program’s start, it has created 932 jobs, weeding and cleaning 196 city blocks and removing nearly 70,000 pounds of litter. Within just a few months, more than 100 people have been connected to permanent employment. The mayor of Albuquerque reports that 37 other cities have inquired about the program. Portland, Oregon has a similar program for homeless youth. Programs for youth also operate abroad, e.g., the city of London has a small-scale program that gives the homeless jobs as city tour guides. Programs that place ex-convicts into jobs stem reoffending and recidivism rates. The Jacksonville-based “Ready4Work” initiative provides jobs, training, family counseling, and mental health and wellness services. Ready4Work reports a 29 percent recidivism rate, (compared to a national average of 50 percent) and a youth recidivism rate of 67.7 percent (Hunt and Dumville 2016). A Kansas City nonprofit operation gives jobs to at-risk youth, the unemployed, and other residents of one of the poorest neighborhoods in the city, working in farm lots, cottage businesses, a makers’ space, co-working spaces, greenhouses, solar arrays, a tool library, aquaponics operations, community gardens, classes, afterschool activities, and other programs. The program has brought about a significant community revival and rehabilitation and a 20 percent reduction in the crime rate. These are just a few projects of the very many that exist in the United States that focus on providing jobs to the unemployed. They are examples of what the JG in the United States might look like.
38. Wouldn’t the JG workers crowd out many volunteer opportunities?
Not necessarily. It may enhance volunteerism. Some people who volunteer today may be doing so in hope of getting a paid employment opportunity. Some may prefer to be paid through the JG. Many others, however, volunteer for personal reasons and the JG does not prevent them from continuing to do so. The school librarian may get an assistant through the JG program, but parents can continue to volunteer during school library book fairs or PTA events.
Volunteering is a key community-building practice, but not a particularly good mechanism for addressing social ills comprehensively and on an ongoing basis. Today many people are overworked and underpaid, juggling several part-time jobs to make ends meet. For them volunteering is simply not an option, even if they wanted to do it. They may not have the time or resources to volunteer. It is possible that the economic security that the JG provides would make volunteering more accessible for many.
39. Wouldn’t JG workers be stigmatized?
Universal programs that are open to all tend to enjoy greater popularity than programs that target specific groups. While not a panacea to social antagonism and stigma, the JG is a significant improvement over the status quo. Not everyone can or should be expected to work (see question 30). However, many people who currently face punitive eligibility criteria for existing benefits prefer to work. The JG offers them an “out” by providing an opportunity to earn a living income while training, learning, and transitioning to other forms of employment. For many, the program would level the playing field and provide the economic opportunities they currently lack. Evidence shows that employers are reluctant to hire the unemployed, especially the long-term unemployed. The JG fundamentally changes the worker’s odds of success as they seek employment, income, and other economic opportunities. Evaluation of the US youth guarantee program YIEPP shows that jobs scarcity and discrimination, not lack of motivation or other personal characteristics, were the core reasons for the high unemployment and low employment-population ratios among black youth. Program impact on black youth was drastic as compared to other groups (see question 37).
40. Will undocumented immigrants be eligible for the program?
While current law does not permit it, the JG can serve as an effective “path to citizenship” program. Current federal law limits immigrants.documented and undocumented alike.from accessing various public benefits and programs. However, with additional legislation, the JG can provide employment opportunities to “Dreamers,” protected under Deferred Action for Childhood Arrivals (DACA). DACA recipients are allowed to obtain driver’s licenses, enroll in college, and legally secure jobs, but the JG can ensure that the jobs are actually there. Program participation can be a path to citizenship for Dreamers. Additionally, the program can be opened up to parents of DACA recipients and victims of illegal labor or sex trafficking.
41. By allowing nonprofits to submit grant proposals for JG projects to the government, aren’t you advocating for providing a giant subsidy to religious institutions?
No. The JG is open to qualified nonprofits. Those will exclude religious entities and political organizations. A 2014 presidential executive order expanded the prohibition on employment discrimination by the federal government and nonprofit agencies and corporations that receive federal contracts to include sexual orientation and gender. This provision in the Employment Non-Discrimination Act disqualifies religious entities from applying for the program.
42. Why don’t we just give people cash assistance instead?
Even if UI were increased, other cash assistance programs were strengthened, and a form of basic income guarantee were implemented, people would still want jobs. Research indicates that the nonpecuniary costs of unemployment (85.93 percent) far outweigh the pecuniary costs (15.7 percent) (Winkelmann and Winkelmann 1995). This suggests that interventions that are based on providing income alone will not be successful. People reap a great many benefits from working; income is but one of them (see figure A4 in appendix II). Decent work at decent pay brings significant mental and physical health benefits, it increases and deepens one’s social capital, strengthens educational and labor market outcomes of other family members, and offers institutional support and economic opportunities not available to those outside the labor market, to name just a few. While there are many good reasons why some people cannot or should not work and why other public policies should be designed to offer them economic security, income assistance does not solve the problem of involuntary unemployment.
43. Isn’t universal basic income (UBI) a better program?
See answer to question 42. There are many reasons to doubt the effectiveness of UBI programs. The first is that they do not address unemployment and the associated social and personal costs. Experiments around the world show that, even in places where some form of UBI has been implemented, many people still seek but are unable to find paid employment. Secondly, UBI in and of itself does not guarantee access to needed real resources. Working families today have trouble finding adequate housing, care, afterschool programs, clean public spaces, etc., even if they already have above-poverty incomes. The JG guarantees both: the income and the public goods and services that are currently in short supply. The JG is a type of guaranteed income, except it guarantees both the income.through public service employment.and the provisioning of the very goods and services communities need.
44. You are just accepting and reinforcing the current morality of work.
Shouldn’t we be moving to a post-work society, a world of leisure? Work here is understood very broadly as the human economic activities undertaken to secure the social and economic provisioning of individuals, families, and communities. In modern market economies, work has taken the form of a “job,” i.e., paid work that has also become increasingly punitive. This is largely due to the very existence of mass and ongoing unemployment and its impact on labor market dynamics and paid employment. The modern paradox is that many people want paid work.not just because of sheer necessity, but also because of the many nonpecuniary benefits a job offers. Yet the marketplace has failed to provide what people want.decent work at decent pay. The JG addresses this paradox by rethinking/reimagining paid work, and by supplying a public option for paid work that is based on social value, public purpose, and empowerment (see question 46).
Reducing the retirement age and the working week are desirable and consistent with the JG. Indeed, since the JG sets the labor standard, if it provides full-time pay and benefits for a 30- or 35-hour working week, then that becomes the standard for the economy as a whole. As for the vision of a post-work society, this vision is not yet widely shared. Most people still wish to work. In light of the enormous environmental and care challenges we face, the goal of having large swaths of the population opt out of paid work seems to be exactly the wrong approach. As in the words of John Bellamy Foster: “I contend here that the idea of near-total liberation from work, in its one-sidedness and incompleteness, is ultimately incompatible with a genuinely sustainable society. ... [T]he real potential for any future sustainable society rests not so much on its expansion of leisure time, but rather on its capacity to generate a new world of creative and collective work, controlled by the associated producers.” (Foster 2017)
45. Does the government have the capacity to manage such a large workforce?
As was discussed in question 37, past programs show that the administration of a large-scale program is not only not an obstacle, but it can also be done quite effectively. Furthermore, the proposal aspires to a true bottom-up design.one that is driven by community job creation organized by states, municipalities, and the nonprofit sector, not the federal government. And where capacity may be lacking for the operation of the actual projects and tasks, part of the JG is to build or fortify existing capacity.
46. Doesn’t technology make jobs obsolete?
Technology will continue to transform our lives and the way we provision ourselves. Many jobs will (and arguably should) be automated. Still, the majority of the jobs of the future have not been invented yet. As technology makes certain jobs obsolete, it creates the need for new ones. And yet, involuntary unemployment will continue to be a problem. There is no iron law of technology that requires certain jobs to be performed by computers/ robots. Despite the innumerable online university courses, society still pays a premium for highquality, in-person instruction. Apps, smart boards, and other programs have transformed school curricula, but not the focus on personal contact and interactive learning. Hospice care cannot be done through the television set and personal care is still the norm.
The JG here is conceived as a National Care Act program that focuses on provisioning for the environment, our communities, and people. Technology notwithstanding, we can still find many useful things for people to do. Finally, robots cannot vote. The adoption of technology is a cultural and political process, as much as it is economic. If the JG deems it important to provide jobs for all who want them, no robot can stand in the way of doing just that.
47. Isn’t Kalecki’s (1943) “Political Aspects of Full Employment” the definitive statement on why the JG is not feasible?
The political obstacles to full employment are historically dependent. The challenge may be considerable, though not insurmountable, as various historical examples indicate. For many decades in the postwar era, the Scandinavian corporatist model ensured long-run full employment via a social contract that was based on the coordination between corporations, unions, and government, where the government served as the employer of last resort (Ginsburg 1983). Japan’s industrial model and active labor market policies had successfully maintained an unemployment rate at or below 2.5 percent for decades in the postwar period. In both cases, the full employment model came to an end with the advent of neoliberal policies in the post. Reagan/Thatcher era. And yet, in 2005, India.a developing country.implemented the largest JG policy in the world (see question 37). While the program faces opposition from corporate interests, it continues to garner a lot of support (Ghosh 2015). The tumultuous history of the minimum wage in the United States is also instructive about the viability of important labor market policies. Today, every increase in the minimum wage is met with steadfast resistance by private firms, and yet the minimum wage policy is here to stay. Many guaranteed public services enjoy strong support, despite the constant threat of defunding and dismantling them. The case for guaranteed jobs has entered the mainstream conversation.
The task at hand is to articulate the program’s economic and social merits. Like other key public policies, the JG may walk a difficult path, but if it is put in place, it will likely become an indispensable employment and macroeconomic program.
48. Will my taxes go up to fund this program?
No. One novel deign feature of this program is its explicit countercyclical funding mechanism. As section VI.5 of the main text explained, it is essential for the JG to be able to offer jobs on demand at all times, in recessions or expansions. This is necessary not only because it is an employment safety net, but also because it is a key macroeconomic countercyclical stabilizer. Program enrollments swell in recessions and shrink in expansions. It is therefore necessary for the funding mechanism to allow the program’s budget to swell and shrink correspondingly. It is also important to point out that government programs cannot be “prefunded” via tax collections. Program budgets are appropriated ahead of time, allowing the necessary spending to take place. Tax collections are a reflux, after the spending has occurred, and the amount of taxes collected varies with the health of the economy and in precisely the opposite direction to the needs of the program. In recessions the JG requires increased funding, exactly at a time when tax revenues decline. So raising taxes to prefund the program is not only impossible, but trying to do so will be counterproductive.the income that the government provides to the unemployed needs to be a net injection in the economy, not offset by taking away income somewhere else in the economy. The task is to allow the budget to float. Since the program always spends neither more nor less than what is needed to hire all people who are in need of a job, spending is, in a sense, at the “right” level because it responds to the needs of the economy.
49. Is there one final feature of the program you wish to highlight?
We have the ways and means to hire the unemployed. This proposal aims to do so via a universal public service job guarantee, whose aim is to secure the right to paid work to even the least fortunate among us. The program’s task is to raise and establish a floor to pay, below which no working person will ever fall.
While the program is open to all, it does not aim to provide medium- or high-wage work to highly skilled individuals (i.e., unemployed engineers, accountants, managers). They are, of course, welcome into the program should they wish to perform some public service at the base pay. But since these groups tend to experience shorter spells of unemployment and generally have the assets that allow them to weather them, they would not normally enroll into the JG and/or would be the first to transition out of it. The present concern is with providing a living wage for anyone who wishes to work. By raising the floor and providing a public job option, the JG will go a long way to breaking the vicious employment dynamics at the very bottom of the income distribution.last hired.first fired dynamics, labor market discrimination, and unfavorable prospects for parents and caregivers, to name a few. The JG fulfills a basic promise.that anyone who is looking for a decent job at a decent base pay will always be able to find such an opportunity.
50. Makes perfect sense. Why haven’t we passed a JG already?
Good question.
REFERENCES Ali,
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