March 9, 2021

Should the Feds Guarantee You a Job?

Dr. Hamilton, who favors a federal job guarantee, was co-author of a 2018 study — with Mark Paul, William A. Darity Jr. and Khaing Zaw — that sought to estimate the cost. Based on 2016 employment figures, and assuming an average cost per job of $55,820, including benefits, the study found it would cost $654 billion to $2.1 trillion a year, which would be offset to some extent by higher economic output and tax revenue, and savings on other assistance programs like food stamps and unemployment insurance.

And the prospect of a large-scale government intervention in the labor market raises thorny questions.

First, there’s determining the work the government could offer to fulfill a job guarantee. Health care and infrastructure projects require workers with particular skills, as do high-quality elder care and child care. Jobs, say, in park maintenance or as teaching aides could encroach on what local governments already do.

What’s more, the availability of federal jobs would drastically change the labor equation for low-wage employers like McDonald’s or Walmart. Dr. Strain argues that a universal federal guarantee of a job that paid $15 an hour plus health benefits would “destroy the labor market.”

Some wealthy countries have job guarantees for young adults. Since 2013, the European Union has had a program to ensure that everyone under 25 gets training or a job. But those programs are built on subsidizing private employment, not offering government jobs.

Many European countries have also subsidized private payrolls during the pandemic, allowing employers to cut hours instead of laying off workers.

The United States has a limited wage-subsidy program, the Work Opportunity Tax Credit, passed in 1996. It extends a credit of up to $9,600 for employers who hire workers from certain categories, like food-stamp recipients, veterans or felons.

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