You’re Hired! The Democrats are looking for a big idea? Here’s one: a guaranteed job for anyone who wants one. It’s not as crazy as it sounds.

Wednesday, March 22, 2017
Democracy: A Journal of Ideas

"Democrats have begun the presidency of Donald Trump exiled to the political wilderness. They’ve lost the White House, both houses of Congress, a shocking number of state governments, while the “blue state” vote has turned out to be really just the “blue city” vote.

The party has cast about for solutions, battling it out over identity politics, the proper opposition strategy, and more. But Democrats might consider taking a cue from Trump himself. Namely, his relentless promises to bring back good-paying American jobs.

“It’s the first and most consistent thing he discusses,” observed Mike Konczal, a fellow at the Roosevelt Institute, after reviewing Trump’s speeches. The President understands, as The New York Times’s Josh Barro noted, that most Americans think the purpose of private business is to provide good jobs, not merely turn a profit. Even Trump’s xenophobia and white nationalism are not totally separate from this: Kicking out all the immigrants and rolling foreign competitors are critical components of how he would restore jobs.

Democrats tend to treat jobs as the happy by-product of other goals like infrastructure revitalization or green energy projects. Or they treat deindustrialization and job dislocation as regrettable inevitabilities, offering training, unemployment insurance, health care, and so on to ameliorate their effects.

All these policies are worthy. But a job is not merely a delivery mechanism for income that can be replaced by an alternative source. It’s a fundamental way that people assert their dignity, stake their claim in society, and understand their mutual obligations to one another. There’s pretty clear evidence that losing this social identity matters as much as the loss of financial security. The damage done by long-term joblessness to mental and physical health is rivaled only by the death of a spouse. It wreaks havoc on marriages, families, mortality rates, alcoholism rates, and more. The 2008 crisis drove long-term unemployment into the stratosphere, and today it remains near a historic high.

Trump went right at this problem, telling Michigan in October of 2016: “I am going to bring back your jobs.” Period.

Democrats should consider making the same moon shot promise. But unlike Trump, they should back it up with a policy plan. And there’s an idea that could do the trick. It emerges naturally from progressive values. It’s big, bold, and could fit on a bumper sticker. It’s generally called the “job guarantee” or the “employer of last resort.” In a nutshell: Have the federal government guarantee employment, with benefits and a living wage, to every American willing and able to work.

Why We Need It

Before getting into the nuts and bolts of how this would work, a word on the broader goals is in order. The job guarantee’s ultimate aim is sustained full employment: A job for every American who could conceivably desire to work, leaving the labor market unable to find enough workers for all the jobs it wants to create.

The benefits of the guarantee for the formerly jobless should be obvious. But just as crucial is how it would help all already employed Americans. When workers compete with one another over an inadequate supply of jobs, they have no power. Conversely, when employers must compete over an inadequate supply of workers, a subtle but profound shift happens. Freed of the fear that they can be cast off into the unemployed and be unable to find a different job, even the lowest-paid workers can demand higher wages and more generous benefits. They can insist on better working conditions and schedules, and job training on their employers’ dime. They can challenge discrimination, harassment, and mistreatment. Unions and labor organizations are empowered. There’s more family stability, healthier communities, more social trust, and more participation in civic life.
The job guarantee’s ultimate aim is sustained full employment: a job for every American who could conceivably desire to work.

Practically speaking, this would require driving the labor force participation rate—the measure of people employed or actively looking for work—as high as it can naturally go, and driving the unemployment rate—that portion of the labor force not employed—to 1 or 2 percent. And then keeping them there.

That may seem a fantastical goal. But we’ve done it before: During the economic mobilization of World War II, the unemployment rate briefly fell to an eye-popping 2 percent. Then, between 1945 and 1970, the rate spent roughly one-third of its time below 4 percent. It’s no accident this period is remembered as an economic golden age, or that inequality remained low during it.

Things have changed since.

As of this writing, there are 1.4 job seekers for every job opening. At minimum, our goal should be no more than one job seeker for every job opening; better yet, less than one job seeker for every opening. Yet this is the best that metric has been after eight grinding years of recovery. More to the point, the closest the job seeker ratio ever got to parity was 1.1 seekers per opening, just for a moment at the end of the 1990s boom. The data doesn’t go back earlier. But there are other signs for when parity is close: The late ’90s was also the only time since 1970 the unemployment rate went as low as 4 percent. It’s currently at 4.6 percent—again, the best level since the Great Recession.

So even in the fondly remembered midcentury, America’s overall rate of joblessness tended to bob like a cork above the threshold that signals full employment. Occasionally, it dropped low enough to touch it, then rose back up. And for the last 40 years, the cork has basically never touched full employment at all.

This multidecade failure has left workers chronically powerless in the face of employers’ demand for cheap, compliant, and disposable labor. It lies behind the vertiginous rise of inequality, the widespread loss of good job benefits, the expansion of financial precariousness to more households, the spread of contract work and the “1099 economy,” and more.

Meanwhile, what jobs the economy creates, for whom, and on what terms, is determined by the people who own and control the flow of capital and property. This is the nature of private markets in capitalism. Both the left and right accept this arrangement as a fait accompli, and effectively try to bribe this rarified group into creating employment. The right-wing bribe is tax cuts and deregulation. The left-wing bribe is muscular deficit stimulus, welfare state spending, and public investment. The latter works much better at juicing aggregate demand, which is what makes it possible for employers to profit and gain market share by hiring more. But in both cases, the power to shape the job itself and to hire remains with the capitalists.

Inevitably, the most privileged or attractive job seekers are hired first: those who are well-educated, who have histories of stable employment, who are free of criminal records, and (let’s be blunt) those who are white. Only after they’ve been employed does new demand for labor trickle down to everyone else.

The last to be reached are racial minorities, those without college or even high-school degrees, those with longer spells of past unemployment, veterans, and those with felony histories. And their turn is far more brief, since it arrives only at the peak of the business cycle. Then, when the downturn comes, the least privileged are the first to be let go. The result is a bitter dynamic of last-to-be-hired, first-to-be-fired. Even when they’re working, their bargaining position is perpetually precarious, resulting in lower wages and more exploitative treatment.

This is why roughly 5.5 million people are still working part-time when they’d like to work full-time. It’s a big part of why employers can get away with rampant wage theft, abusive scheduling, racial discrimination, sexual harassment, unsafe working conditions, and violations of labor rights. It’s why wages have stagnated for decades for far too many.

That full employment’s absence hits less-privileged Americans harder isn’t just problematic because it’s unfair. It also condemns their communities to repeated cycles of destruction, from which they never have time to properly recover. The unemployment rate for black Americans, for example, is perpetually twice as high as that of whites—a situation that holds within each education level. Same goes for the unemployment rate of all Americans with a college degree versus those with only a high school education.

Conversely, the beneficial effects of full employment, when it happens, are the most pronounced for the least privileged: It’s when employers are finally forced to cater to the people and communities normally exiled from the economy.

Imagine what sustained full employment could do.

So it shouldn’t surprise that African-American thinkers are longtime champions of the job guarantee. Martin Luther King Jr. repeatedly called for it. So did Bayard Rustin, another 1960s African-American civil rights activist, and Sadie T.M. Alexander, the first African-American woman to receive a PhD in economics. Today, black advocates of the job guarantee include Duke economics and public policy professor William Darity, Jr. and New School economist Darrick Hamilton."

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