Can the U.S. Afford a Guaranteed Jobs Program?

Tuesday, August 7, 2018
Filthy Lucre

For a long time, the idea of a government-endorsed guaranteed job program has been pushed by some politicians, particularly those who are more liberal-leaning.  One of the most prominent supporters of the program has been Senator Bernie Sanders.  The debate regarding the guaranteed job program has been a topic of controversy between politicians for years, as those from the left fully support the guaranteed income for all, while those on the right fear that a universal income could lead to the slippery slope of Socialism.  From an outsider’s perspective, the biggest question that remains is, how would a guaranteed job program, provided by the federal government, be paid for?

Looking at the current state of Welfare in the economy, it is clear that money is already being spent to help Americans that do not have jobs.  Currently, unemployed Americans are receiving money through corporate tax breaks and subsidies such as low-income housing.  While it is unclear what proportion of those tax breaks and subsidiaries actually go directly to benefiting the unemployed, it is clear that billions of dollars are allocated to these programs.  In total, these subsidies from state and local governments can amount to as much as $80 billion per year.

In addition to the subsidies, the corporate tax cuts of recent months have served as a means of creating jobs at a much less universal level.  Through the tax cut, the Trump administration aimed to have the money that these corporations saved go towards increased wages and more jobs.  Adding the corporate tax cuts to the equation brings the average annual total of the amount spent by the government to create jobs to $214 billion.

The jobs guarantee proposal, called the Center on Budget and Policy Priorities, as proposed by Mark Paul, Sandy Darity, and Darrick Hamilton estimates that the program would cost about $543 billion for the first year.  In turn, the total cost of the program would be less than this figure, due to the decreased need for Food Stamps, Children’s Health Insurance Program, and other forms of welfare.  In addition, jobs for all Americans would lead to an increase in consumer spending and thus an increase in tax revenue.  With all that said, the Levy Institute estimates that it would cost the federal government between $250 and $350 billion dollars annually for the first five years, a lower cost than the $543 billion forecasted.

Critics of the job guarantee argue that jobs which require advanced skills would be off-limits for the guarantee programs, despite the fact that these jobs are often the most needed. Critics also argue that during different economic cycles it would be difficult, if not, impossible to guarantee positions as job demands rise and fall.

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