On A Federal Jobs Guarantee

In the malebolgian circles I travel, one tends to hear a lot about a pair of policies that purport to offer the solution to rampant inequality and the incipient robot uprising: A Universal Basic Income (UBI) and a federal Job Guarantee (JG). I’ve written before on the idea of a UBI; others like UBI evangelist Scott Santens have written quite a bit more, as has one of Vox’s foppish hipsters, Dylan Matthews, but I’ve never tackled a JG.

What Is It?

If a UBI is simple to understand (“The State gives every Citizen money”), a JG is even simpler: The State gives a job to everyone who wants one. The Center for American Progress, in a proposal titled “Toward A Marshall Plan For America,” suggests ” a large-scale, permanent program of public employment and infrastructure investment—similar to the Works Progress Administration (WPA) during the Great Depression but modernized for the 21st century.”

For advocates of the program, a JG solves all of the same problems as a UBI: salvation from poverty, a backstop against the job loss of automation, a solution to stagnant wages. According to Jacobin, “Giving everyone a job is the best way to democratize the economy and give workers leverage in the workplace.” The Atlantic says that: “[A JG] would pull millions of families out of poverty…It would push up the wages of workers with private-sector jobs by creating a hotter labor market overall. It would address income stagnation and the decline of the middle class. It would improve and expand public services. Rural America would get a boost, and the government would have a strong standing measure to counter recessions and end long-term unemployment.”

I have certain Doubts about this (I have Doubts about a great many things; they’ve been gnawing at my limbic system for a while now, and usually, the only way to deal with that kind of psychic infection is to lance the whole thing and let it leak out onto the internet. These Doubts are of the milder, more benign variety, and gentle expression is usually enough to bring the swelling down). It’s tied up in a bunch of questions, but there’s really one I want to wrestle with here.

“Hole-Filling Work”

Jeff Spross writes that “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.”

This brings to mind an old joke:

A man is sitting on his front porch, looking out to the road. He sees a truck drive up, and two men get out, both with shovels. The first man digs a hole on the side of the road. When he finishes, the second man fills in the hole. This continues every twenty feet or so. The man on the porch gets more and more curious until he can no longer stand it, and he hollers at the workers: “What are you two doing?”

“Well, we work for the county,” the first man says. “We’re part of a tree-planting team. I dig the holes, and he fills them in, but the guy who plants the trees is out sick today.”

10-7-2016-17-10-57-6ea2

Of course. DC Comics.

That’s the main criticism I hear about a JG, and it’s rooted in the idea that the State can’t actually provide jobs of substance. It’ll be makework, useless busy chores. You’ll be hiring men to dig holes and men to fill them in.

I disagree with this assessment of the State’s capacity to provide work, and if you think I’m wrong, look at the military–that’s a government job. So are the firefighters, the DAs, the park rangers, public school teachers, and countless other vital jobs. In fact, we tend to think of the government as providing societally-necessary jobs–jobs that we can’t afford to go without, that we can’t risk losing in a market contraction.

And I further disagree with the presumption that the only work that the State could offer is useless busywork. I think this is a sense shared with most JG proponents. There’s necessary work to be done, JG advocates say, and people who could do it. 

That’s where it starts to break down for me. Let’s look at infrastructure specifically–and that’s a fair target, since CAP explicitly says their JG is part of “infrastructure investment.” It’s unquestionable that we have a lot of work to do. In 2012, a little more than 1 in 10 bridges were classified as “structurally deficient.” 1 in 3 ports need at least $100 million in investments and repairs to keep up with anticipated demand. There’s a projected $46 billion annual shortfall for school funding. Drinking water (which, you might recall, you need in order to live), needs a stomach-churning $1 trillion over the next 25 years (which is “only” $40 billion a year). A lot of work to do, indeed.

I’ll say again: I don’t want to get too twisted up around the idea that a JG is only applicable to infrastructure. It’s not, but it’s a useful, handy shorthand for the idea that we could put people to work doing meaningful jobs.

Here’s the problem. Back in the days of the Great Depression, the TVA, and the WPA, there were staggering numbers of young, fit men out of work, and plenty of work that needed nothing more than a strong back and a working pair of hands. But it’s not 1930 anymore. You can’t just scoop up people to lay pipe or dig ditches or whatever it was they did. We’re sitting at 4.4% unemployment. So that compels a question: where are the workers going to come from?

As Tim Worstall said in Forbes, “[W]e just don’t have homogeneous labour. It’s hugely, highly, heterogeneous. This is, of course, just the side effect of that much greater division and specialisation of labour which makes the modern world so rich. But it does mean that there isn’t anything that we do which either requires or benefits from the mobilisation of large amounts of untrained, in this task, labour.” (I disagree with the second half of his argument, which is that governments are inherently incapable of producing good outcomes when they participate in the economy; the entirety of Scandinavia would like to have a word with you, Mr. Worstall.)

See, I’m suspicious of the notion that there’s just a huge, dormant employee pool waiting for activation. I tend to presume a kind of equilibrium in the marketplace, that prices are about as low as they an get and wages are about as high as they’re likely to go. I have enough trust in the free market that I assume, on an intuitive basis, that if there is work that needed to get done, we’d have people getting hired to do it. This means, keeping with our infrastructure example, that if we had a bunch of unemployed construction workers, it would mean we had no jobs for them to do. Conversely, if there are projects that aren’t getting done, there must not be workers for them. Since we have a lot of projects that need to be done, it follows that there aren’t a whole lot of unemployed construction workers. If unemployed people exist, and necessary work exists, I don’t see how a JG would push unemployment down, except maybe on the margins.

Front-row kids might have picked up that this is how supply and demand is supposed to work. I’ll admit that, since we don’t have a free market, this is all, to a certain point, theoretical. I’m not an economist, and I barely understand what the Fed is, let alone how employment trends work. So I’m perfectly willing to accept the possibility that I’m wrong here. This is just how it all looks to me, a laydude. But all that being said, my conviction is that if there are jobs that need to be done parallel to unemployed labor, then it follows that the labor is unsuited for the jobs, and vice versa. 


SIDEBAR

And none of this even touches on immigration, legal or otherwise. If we heard nothing during 2016, it was that unskilled immigrant labor was driving down wages for American workers (whether or not that’s true is a matter of some debate). My uneducated guess would be that part of the reason there hasn’t been a huge hiring boom for American blue-collar labor is the availability of cheap foreign workers, documented or otherwise. I know we’re all supposed to be protectionists now, so maybe we don’t need to worry about Mexicans and El Salvadorans and Guatemalans taking the day labor jobs. I guess I bring this up as an easy counterargument to a JG: if you want to repair the nation’s skeleton, let the brown people come across the border.


Put another way, a job guarantee would necessarily put people into jobs that didn’t need to get done (because, again, if people could get jobs doing work that needed to be done, they’d be doing it). It has to be a job that people can do, but that no one wants them to do (once more: if someone wanted them to do it, they’d have already hired the people willing to do the work). Now, there’s an easy response the this: job training! Investment in skills! STEM! Learn to code! But that again misses the point that a job guarantee is pretty much incompatible with skilled, necessary work.

(For what it’s worth, Mr. Spross acknowledges that there are people who wouldn’t be helped under a job guarantee, and that to really make it work, you’d have to supplement the JG with a UBI, which is so deliriously technocratic that I can’t help but at least be a little bit dazzled by the magnitude of the audacity of it. Anyway, that’s outside the scope of what I’m writing about today.)

Matt Bruenig, who I like and admire a great deal, wrote something similiar, where he points out that a JG, as conceived by CAP and others, acts as the employer of last resort. What that means is that in the market contracts, the JG steps in to pick up the people who get left out. Accordingly, the number of people enlisted (for lack of a better word) in the program would rise and fall countercyclically, which means a JG would be limited in the kinds of jobs it could offer. Bruenig described those jobs on his website:

If the job is an important one that you really need done, then you shouldn’t use the JG to staff it. However, if the job is not so important, then you have a hard time explaining why it should be done at all. The JG thus would seem to only make sense for these middle-ground jobs that are kind of nice if people do them, but really not a big deal if they don’t. I don’t know how many jobs that describes, but it seems kind of narrow…the JG workforce should theoretically turn over a lot and shrink a lot in cyclical upturns, this means that any work that is only valuable over long-term stints is basically ruled out. Training someone up for a job when they may bail at any time doesn’t make much sense, nor does embarking on any project that will fail if people bail in the middle of it. Of course, the possibility that people may bail is a problem all firms face. But the JG does not have the same ability of firms to protect themselves against that possibility. The JG would pay a fixed wage that cannot go up (this is an essential part of its anti-inflation scheme), meaning that, unlike a firm, it could not try to entice the worker to stay by offering a raise. Additionally, because the JG operates off of whoever shows up, it could not, unlike a firm, go out and specifically try to hire someone with the same skills as the person who is bailing. Given this, all jobs must be short-term, low-training type jobs that can provide value relatively immediately

So, taken together, the JG seems to me like it would consist of low-capital, short-term jobs that are not that important to do. That is, it takes on the sheen of a make-work program that doesn’t even probably build much in the way of skills. Add that to the fact that there will absolutely be times across the thousands of JG offices in the country where there simply isn’t anything to do and you are setting yourself up for some rather unfortunate outcomes.

In another post, he wrote that:

The key to the JG is finding jobs that are nice to have, but are not strictly necessary. You need jobs that can go unfilled when the private sector picks up.

Yet, here are all the jobs mentioned by CAP in its JG section: 1) home care workers for elderly people, 2) home care workers for disabled people, 3) child care workers, 4) teachers’ aides, 5) emergency medical technicians.

Do these seem like jobs that can go unfilled when the private sector picks up? Should child care and assistance for the disabled disappear when the economy is booming? No…They should exist on a permanent basis, not as a temporary home for dislocated workers.

 

 

Finally, to round out a three-fer of Matt Bruenig, he responded to Jeff Spross’ piece (quoted earlier in this article), by offering this comment: “What we find that really fits the JG mold are local arts productions and discretionary beautification. That’s supposed to absorb millions of jobless people, including those who want nothing to do with plays? Seems doubtful.”

 Screenshot (136)

 

I don’t think there’s anything I can add to that.

 

 



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