The Case for a Job Guarantee

Pavlina R. Tcherneva

• Publisher: Polity
• Year: 2020
• ISBN:
  9781509542116
• Topic: Volkswirtschaftslehre
• Subtopic: Wirtschaftspolitik
• Edition: 1

One of the most enduring ideas in economics is that unemployment is bothunavoidable and necessary for the smooth functioning of the economy. This assumption has provided cover for the devastating social and economic costs of job insecurity. It is also false. In this book, leading expert Pavlina R. Tcherneva challenges us to imagine a world where the phantom of unemployment is banished and anyone who seeks decent, living-wage work can find it - guaranteed. This is the aim of the Job Guarantee proposal: to provide a voluntary employment opportunity in public service to anyone who needs it. Tcherneva enumerates the many advantages of the Job Guarantee over the status quo and proposes a blueprint for its implementation within the wider context of the need for a Green New Deal. This compact primer is the ultimate guide to the benefits of one of the most transformative public policies being discussed today. It is essential reading for all citizens and activists who are passionate about social justice and building a fairer economy.

1
A Public Option for Good Jobs

It took eleven long years after the Great Financial Crisis to bring the US unemployment rate to a postwar low of 3.5 percent. Still there were millions of people who could not find paid work. The official figure in February 2020 was 5.8 million, but with a proper count that number would be more than doubled.¹ Job loss is not an affliction that touches everyone equally. It disproportionately affects the young, the poor, individuals with disabilities, people of color, veterans, and former inmates.

Growth, we are told, will raise all boats, but drawn-out jobless recoveries have been the norm for half a century now, and jobs have increasingly failed to deliver good pay. When we consider the question “When the economy grows, who gains?” we find a disturbing answer. In the immediate postwar era, as economies expanded after each recession, the vast majority of the gains went to the bottom 90 percent of families. The exact opposite has been true of the last four expansions (Figure 1).² Since the 1980s, a growing economy primarily grew the incomes of the wealthiest 10 percent of families. Worse, during the recovery from the Great Recession, average real incomes for the bottom 90 percent of families fell in the first three years of the expansion.

Figure 1 Distribution of Average Income Growth During Expansions

Source: Pavlina R. Tcherneva, “Reorienting Fiscal Policy: A Bottom-up Approach,” Journal of Post Keynesian Economics, 37(1), 2014: 43–66.

Today, millions of people cannot find paid work, and millions more need above-poverty pay. Wages have stagnated for decades. Real average income for the bottom 90 percent of families was $34,580 in 2017, 2.2 percent lower than it was twenty years earlier. Meanwhile, real average income of the richest 0.01 percent of families grew by 60.5 percent during the same period (Table 1), and was nearly 556 times higher than that of the bottom 90 percent (or 1,000 times higher if we include capital gains).³

Table 1 Runaway Inequality

Source: Author’s tabulations of T. Piketty and E. Saez, “Income Inequality in the United States, 1913–1998,” Quarterly Journal of Economics, 118(1), 2019 [2003]: 1–39.

Behind the unemployment and inequality numbers hide the millions of different faces, experiences, circumstances, and personal challenges of those dealing with joblessness and inadequate pay.

Maybe you are one of them or you know someone who is. Maybe you lost your job in the Great Recession and are now working two part-time jobs, struggling to pay the bills. Maybe you graduated high school, cannot afford college, and are looking to save some money first. Maybe the children have fled the nest and you, the stay-at-home parent, would like to find paid work, but it has been decades since your last job and you don’t know where to begin. Maybe you’ve sent out 215 résumés already,⁴ but even in this “strong economy” you still cannot find stable well-paid work. Maybe it’s because of your age, gender, the color of your skin, or your criminal record. Maybe you are someone with a disability who wishes to work, but getting the kind of jobs you could do seems impossible and, if you do get one, the current law allows your employer to pay you as little as $1/hour.⁵ Maybe the firm found a “better” candidate. You keep knocking on the next door, emailing the next employer, but the call never comes.

The unemployment office is here to help – you take additional classes, spruce up your résumé, and practice your interview skills. You put your best foot forward but strike out again. Or maybe you are hired, but it’s only another low-paying job with no benefits. You barely make ends meet and the long commute and unpredictable shifts make coming home for dinner or doing homework with the kids a challenge.

You are willing to work hard for that job, but the job just isn’t working for you. And this time you are lucky. Remember 2009, the overcrowded unemployment offices, and the many online ads that said: “the unemployed need not apply”?⁶

But maybe you are none of the above people. Maybe you have an OK job, at least compared to your friends. The pay is not great but the firm promises opportunities for advancement. You can provide for the family and, after a few more months, you will finally earn that two-week paid vacation. The only problem is that your boss harasses you mercilessly. But you stick around. Could you really give up this “stable” job? And you are so close. You can almost smell the ocean.

Maybe you live in Puerto Rico, and your shop was swept away by Hurricane Maria. Many people died, many more fled, and a year and a half later one in twelve people on the island were still looking for work. Or maybe you escaped the California fires, but you lost your job and the FEMA money for your incinerated home is running out. You and many others in flood- and tornado-ravaged areas still need to pay the bills, and local communities still need rebuilding.

How many of these stories can we tell? In the US – millions; globally – hundreds of millions. The loss of one’s job and livelihood is not just a consequence of unusual circumstances or “acts of God.” It is a regular occurrence. The drumbeat of the economy, expanding in good times and shrinking in bad, along with outsourcing and technological change, creates ongoing job losses. And while new employment opportunities are also created, they are never enough for all jobseekers even at the peak of expansions. Meanwhile many workers are in unstable, poorly paid jobs. In 2018, there were 6.9 million working people earning below the official poverty level.⁷ For millions of Americans, one job is just not enough.

What if we changed all that and made it a social and economic objective that no jobseeker would be left without (at a minimum) decent living-wage work? What would be the impact on the lives of people, communities, and the economy?

Imagine that you go back to the unemployment office but this time, in addition to every other resource it offers, it also produces a list of local public service jobs, each offering a basic wage (say $15/hour), healthcare, and affordable quality childcare. You can choose from full- and part-time options. As it does now, the office continues to offer additional wraparound services including training, credentialing, GED completion, family-focused case management, transportation subsidies, counseling, referrals, and others.

These are local job opportunities in the municipality or local non-profits (finally, a shorter commute), but they are federally funded (not that you care, a paycheck is a paycheck). The urban fishery is starting a new STEM program with local schools. The historical society is digitizing its maps and records. The Green New Deal has launched a comprehensive weatherization program and green infrastructure projects abound. A project is hiring for that waterpipe replacement that dragged on for years, and the cleanup of the vacant lot behind the municipal park needs workers. Local community groups are running outreach programs for veterans, the homeless, at-risk youths, and former inmates, and community health clinics are offering apprenticeships and training opportunities. A community theater is running afterschool programs for children and evening classes for adults.

All of these jobs were either nonexistent or the projects were sorely understaffed before the Job Guarantee was launched. If your community has been battered by extreme weather disasters or environmental hazards, the program will help staff the cleanup and rebuilding efforts and the region’s revitalized fire and flood prevention programs. And this entire menu of options is organized and supplied courtesy of the Job Guarantee. It is a program in cooperation with local and municipal governments and local non-profit providers to ensure that no jobseeker is ever turned away.

The Job Guarantee office is there to help you transition to better-paid employment opportunities in the private or public sectors. The economy is growing and new job ads promise opportunities for advancement, flexible hours, and telecommuting. With your additional experience and training, you line up some job offers. You say goodbye to the Job Guarantee and are off to the next opportunity.

Or maybe you do not need the Job Guarantee at all. After all, you are a highly educated and skilled individual with an entirely different professional experience – your career ladder is clear, your contacts are many, and you are able to...