What Is A Federal Jobs Guarantee?

Friday, July 6, 2018
Huffington Post

How much would it cost? 

It depends on which version you look at ― and costs would obviously fluctuate based on participation ― but whichever way you cut it, the figures are high.

The Levy plan would come in at around $378 billion a year in the first five years, rising to $415 billion in the second five years. A broadly similar jobs guarantee set out in a paper by William Darity Jr. and Mark Paul of Duke University and Darrick Hamilton of the Milano School of International Affairs, commissioned by the Center on Budget and Policy Priorities, would cost around $543 billion a year, or just under 3 percent of the gross domestic product.

The Center for American Progress has a more limited but cheaper version. Its proposal would focus purely on providing guaranteed, $15-an-hour jobs to people without college degrees. The center estimates this would scoop up around 4.4 million workers at a rough cost of $158 billion, “approximately one-quarter of Trump’s proposed tax cut for the wealthy on an annual basis.”

But all of these plans say the costs would be substantially offset by increases in tax revenue as more people entered the workforce, and decreases in the uptake of Social Security programs as well as GDP growth and increased productivity. 

How would we pay for it?

“It would be funded the way everything else is funded,” Kelton said. “The government will pay for it.” The Levy report doesn’t include new taxes to fund the project, but analyzes what would happen to the economy if the government simply cut a check for the program. “What the models show is that you can do this without creating an inflation problem,” Kelton said, “and therefore why would you pay for it with tax increases of one kind or another?”

The program could even “pay for itself,” the Levy report says, taking into account reduction in crime, better health, better social and economic stability and reductions in Social Security spending. 

The Levy models say that if you bring 15 million people into the jobs guarantee, the private sector would benefit from the subsequent increased buying power, creating around 4.2 million additional jobs. “In the aggregate,” Kelton said, “it’s clear the economy as a whole does far better, and that means that the private sector does far better.”

Darity’s paper is not focused on the financing question, but it suggests the program could be financed through reductions in Social Security spending and through new tax policies like a financial transactions tax, a carbon tax and a modified estate tax. But ultimately, Darity told HuffPost, “the program is, de facto, self-financing ― government makes the outlay and the program will generate the tax revenue to support it.”

Read the full article here