Why a 'federal jobs guarantee' is gaining steam with Democrats

Thursday, April 26, 2018

Research published for the Center on Budget Policy Priorities by William Darity Jr., a professor of public policy at Duke University, New School economist Darrick Hamilton and Duke postdoctoral associate Mark Paul has been influential in shaping both the Sanders and Booker plans. In an interview with CNN, Darity said he has also been in contact with the offices of Gillibrand and Oregon Sen. Jeff Merkley, both of whom, along with Sens. Elizabeth Warren of Massachusetts and California's Kamala Harris, are co-sponsors of the Booker bill.

"The domestic models (for these new bills) date back to the Great Depression, with the implementation of the Works Progress Administration and the Civilian Conservation Corps," Darity said. "What would be different about this type of a project is that it would be a universal program of employment -- everyone would be eligible to take advantage of this public option -- and it would be permanent."

Having spent a decade advocating for a job guarantee, Darity reasoned that President Donald Trump's election -- its "shock effect" -- was the blow that pushed mainstream Democrats in his direction. The party, he said, is no longer working under the illusion that Republicans would agree to any form of meaningful compromise and has stopped "self-censoring themselves before they put forth legislation to be considered."

The emerging jobs guarantee debate, like with health care, has tracked the broader left's ideological spectrum. Whether to pursue universal programs at the expense of means-tested or more narrowly targeted ones has roiled Democratic politics for ages. The question lay at the wonky core of the fissure that opened up during the 2016 presidential primary. Naturally, it looks set to divide minds over the prospects of a jobs guarantee.

In May 2017, the liberal Center for American Progress introduced a more modest plan, in scope and cost (at a projected $158 billion per year), which would focus on individuals without a college degree. By contrast, the model preferred by Sanders, as outlined by Darity and his colleagues, would be available to any working American. Neither Sanders or Booker has tallied up a price tag yet, but Darity estimated that a full guarantee would require upwards of $750 billion annually, with the average expenditure, per worker, figured at between $50,000 and $60,000. (CAP's estimate put the direct cost of each job at $36,000.)

Supporters of the universal approach note that in times of severe economic downturns, well-educated workers in professional roles are not immune mass layoffs. They also argue that the increased costs would be offset, or at least be made more palatable, by a resulting cut in unemployment insurance payments, an influx of tax money to state and local governments and the potential for a "consumption stimulus," as Darity described it -- an economic spark created by newly employed workers' new spending.

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