Sarrera
30 million Americans are unemployed. Here’s how to employ them.
A chat with the economist pushing the once-radical idea of a federal job guarantee.
By David Roberts@drvoxdavid@vox.com May 4, 2020, 2:00pm EDT
In the last six weeks, there were a staggering 30 million unemployment claims in the US — unprecedented at least since the Great Depression, possibly in the country’s history.
The flood quickly overwhelmed America’s already rickety unemployment system. The underfunded patchwork of different offices, laws, and procedures across states has meant wide disparities in who receives benefits and how much. Overall, less than a third of the unemployed received their benefits in March. Surveys indicate these failures are ongoing.
For many of America’s unemployed, already so close to the financial edge, failure to receive benefits will mean food insecurity, skipping medications, or losing a home, with accelerating social costs in depression, domestic abuse, drug abuse, suicides, and sickness. In the US, unemployment is allowed to metastasize into something much worse.
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That is one reason some economists and activists on the left — including the authors of the Green New Deal resolution — have advocated for a federal job guarantee. It would be better, they argue, if all those unemployed people could be slotted into public service jobs. They could maintain their incomes, their homes, and their health.
In US politics, a job guarantee was seen as hopeless lefty radicalism as recently as a month ago. But the shock of the virus has opened the conversation to bigger ideas. As unemployment spirals into a range of social pathologies, history is catching up to economist Pavlina Tcherneva.
Chair of the economics department at New York’s Bard College, Tcherneva studies macroeconomics and full employment and has been a key figure in the emergence (or reemergence) of Modern Monetary Theory, the newly popular idea that the only limit on the spending power of federal governments (at least governments that print their own currency, like the US) is inflation. It argues, contra the scarcity mindset of fiscal austerity, that we can have nice things.
(Tcherneva is also responsible for a graph that went viral on Vox back in 2014.)
In July, Tcherneva’s new book is coming out. It’s called The Case for a Job Guarantee, and as the title indicates, it makes the case for a federal program that ensures a job for anyone who wants one. When she began making this case in her academic work, with unemployment at 4 percent, she was dismissed as a fringe figure. Now, as unemployment rockets past 20 percent, toward 30, she sounds more like a prophet.
I reached Tcherneva by phone on April 30 to talk about a job guarantee, how it would work, what it would mean for the larger economy, and why it’s necessary even if other safety net policies like a universal basic income are already in place.
Our conversation has been edited for length and clarity.
Elkarrizketa
David Roberts
How long has the idea of a job guarantee been around, and what is it exactly?
Pavlina Tcherneva
A job guarantee is the idea that people who want decent work should be guaranteed that opportunity. It is a public option for a basic, decent job with basic living wages and basic benefits.
The idea has been around for a while. You can find it in the UN Declaration of Human Rights. Even before that, labor movements pushed for the right to guaranteed employment in various forms. The idea was resurrected, at least in the popular discourse, during the civil rights movement.
Around the world, you see various forms of large-scale employment programs for the unemployed, but a job guarantee is different. It is a missing piece of the safety net. When you think about how we provide the safety net for other things — we have a problem with retirement security? Guarantee retirement income. There’s food insecurity? Guarantee food. A problem with shelter? Guarantee shelter.
Granted, we can do much, much better in all of these areas. But you realize: We don’t think about jobs that way. When people are missing a job, we don’t guarantee a job. We tell them, “go get some training, here’s a little bit of unemployment insurance, help yourself.” We don’t have the same way of thinking about this one fundamental aspect of people’s economic security.
David Roberts
You say the program would be structured in a distributed way, through local organizations. What would it look like exactly? If I’m an unemployed person and I want a job, what is my experience of this program?
Pavlina Tcherneva
It’s not the federal government coming in to your town and saying, “Hey, we’re gonna build a bridge.” That’s not what we’re talking about.
We’re talking about a kind of infrastructure. Some of it already exists, unemployment offices that could be converted into jobs banks. There would be a program that solicits proposals from the community — from municipalities and localities, but also nonprofits. They can come forward with projects and say, “look, we’re doing this important work, but we’re understaffed and underfunded. We would like to staff these projects.” The idea is to create a bottom-up model.
So if you are unemployed, you go on the website of the local job center or walk into the office, and you can leave with a list of employment options, public-service opportunities you’ll be able to access locally.
The buck will ultimately have to stop with the Department of Labor or the federal government, because the goal is to create enough projects for all who want work. So if for some reason there aren’t enough proposals at the local level, there’s got to be some sort of mechanism to encourage that process, or even create some federal programs.
David Roberts
That seems like a level of administration that is way beyond what the infrastructure is capable of today.
Pavlina Tcherneva
I hear this all the time: “But how would you do it?” I think it’s the wrong litmus test. People have to first understand why it is required and important.
We don’t have the same litmus test for other programs. We believe that public education is a basic right. Does it work well everywhere? No, of course there are poorly run schools. Do we say we should scrap them because they are an administrative nightmare? We don’t do that. And it’s the same idea for various other programs. We see that unemployment insurance is broken — Florida seems to be denying claims, etc. Are we saying scrap unemployment programs? We’re not.
The reason I talk about this nonprofit, bottom-up model is because nonprofits are already trying to fill the gaps left behind by the government and the private sector. There are lots of social needs that tend to be provided through nonprofits. There’s so much environmental work that is done because it’s important; it doesn’t have a commercial return. So what I’m suggesting is we scale up those efforts and we use those providers locally to create employment opportunities.
There are programs for ex-convicts, for example, that lower recidivism rates. There are models out there. You don’t necessarily have to reinvent the wheel.
David Roberts
Whatever standards the federal government sets for these guaranteed jobs in terms of wages and benefits will end up serving as national minimums, right? Can you say a little bit about that aspect of a job guarantee?
Pavlina Tcherneva
It’s going to be the minimum for the whole economy, so what is the appropriate wage level? I’m proposing $15 [an hour], which may well be inadequate. We might want to do $17, just because our minimum wage is so pitifully low. So that becomes the effective federal minimum wage; cities and municipalities could pass wage ordinances and pay more if they wish.
What would be the basic minimum benefits? Well, Social Security is one we all agree on. I would much prefer that there is universal health care that is not tied to a job, but if somebody is working, they absolutely should have health care. The other is paid leave — the US is the only major country that doesn’t have paid leave.
We can expand what a good job looks like. In Europe, there is a conversation around a reduced workweek. We did the 40-hour workweek during the New Deal, but it was a compromise, even back then. Thirty hours was very popular. So we could say that 32 hours is a full week, with benefits, and then that would slowly become the acceptable norm.
David Roberts
So we should acknowledge, when we pass a federal job guarantee, we are passing a whole bundle of progressive policies, including job, wage, and safety standards. There’s a lot packed in there.
Pavlina Tcherneva
But think of the comparison. In the ’30s, the kind of reforms we passed were truly radical. Imagine a country without Medicare and Social Security covering millions and millions of people. Imagine a world without minimum wages or working-week hours. That’s radical.
What we’re doing is making sure these benefits cover everyone. They’ve been eroding for such a long time, we need to strengthen them. In the context of what we have done in this country, this is actually not that radical.
David Roberts
What kind of work or work projects could accommodate large numbers of people constantly coming in and leaving? How do you deal with that?
Pavlina Tcherneva
It is an unfortunate misconception about the program.
When you look at how unemployment behaves in the US, it’s volatile. It shoots up, comes down. I think that’s what people are thinking — that’s what will happen to this program. They’re going to be flooding the program and then exiting en masse.
But the program will actually stabilize these fluctuations. There are reasons unemployment feeds on itself. If you have this kind of preventative program, where people trickle into other employment rather than unemployment, their spending patterns are stabilized, so you have smaller fluctuations in the private sector. We see this in countries that have active labor-market policies, that do a lot more public employment than we do.
The employment situation doesn’t have to be this way.
David Roberts
So the idea is that, currently, if someone becomes unemployed, they stop spending, and their lack of spending causes other people to become unemployed. You get a spiral. And you’re saying you could eliminate that spiral by putting people in other jobs so they don’t stop spending.
Pavlina Tcherneva
An argument I’ve been making for a long time is that unemployment spreads like a virus, if you look at it geographically, how it ripples through communities. One unemployed person costs somebody else their job, and on and on and on. That brings all the social costs and social problems that come with the loss of livelihood.
Because our safety net and our protections are weaker, because our labor targeting policies are weaker, we have a lot more of this infectious process going on.
If you have the certainty of a living-wage job around the corner, how would you spend compared to the uncertainty of finding a job and when that job is going to come?
David Roberts
You can still envision circumstances — after an extended virus lockdown, say — where you could get a huge influx of people into the program.
Pavlina Tcherneva
Yes, absolutely. How much better would we have been in addressing this if we had the infrastructure in place? We would already be putting people on the front lines to be dispatchers, to take calls, to do wellness checkups for the elderly. Now we have to start from scratch. I should say, though, we have seen in other countries where there are huge bouts of unemployment that you can get these programs up and running in a short period of time.
The other thing I want to say is, why is it a problem for the public sector to absorb workers like the private sector constantly does?
One big confusion is that people think the job guarantee is going to replace some must-do, ongoing, critical programs. But we are not replacing EPA inspectors or FDA inspectors, who have to be there at all times. If you have a care project — environmental care, community care — you could add a lot more hands, a lot more people to shadow teachers or nurses to do on-the-job training. These programs can be a buffer that absorbs unemployed people, and then, as they are ready to move on to better jobs, they leave.
In recessions, social needs become more acute. We need extra helping hands for the food kitchens or the homeless shelters. It is the nature of the job guarantee that whenever there are more needs, there are more people to do them. Essentially it is a coordinating mechanism.
David Roberts
So the amount of people available to do socially beneficial jobs rises alongside the need for those jobs.
Pavlina Tcherneva
In general, that’s right. How many restaurant workers are out of work right now, and how many soup kitchens are there? You have restaurants trying to convert themselves into food outlets for hospital workers or the homeless. We could have an institutional structure that designs these projects and staffs them.
David Roberts
One question that comes up a lot around a job guarantee is how is it not just a universal benefit that requires work to access it, i.e., workfare? Wouldn’t it be better just to give people money through a universal basic income or other mechanism? Why should their value as humans be tied to their labor productivity?
Pavlina Tcherneva
Unemployment insurance and food stamps should be reformed to get rid of work requirements. It’s completely insane: Right now, we require people to work for their benefits, but we don’t guarantee the opportunity to work. It’s upside down.
The job guarantee says, do you want a job? Come on in, you can get it now. If you don’t want it, and you want unemployment insurance, if you want food stamps and housing assistance, if that is the better option for you, by all means. The job guarantee is an option. It’s an add-on program.
There are different philosophies that guide this and workfare. Workfare is predicated on punishment. People have to demonstrate they are deserving of whatever pittance the government is giving them. The job guarantee says the opposite: If you wish to work, it is the government’s responsibility to guarantee a dignified minimum option.
A job guarantee is not going to be a panacea. It’s just a program for those who wish to work. A lot of people will say that choice is not truly free because they don’t have alternative support or income guarantees. The way I talk about it is, you are going to supplement the job guarantee with other benefits for those who cannot work, and basic income is part of that.
But I see basic income a little bit differently from a lot of folks who say, “just send me the check and let me be.” What we need is not just a check, we need to access certain things to make our lives better. If I get a check but I can’t get housing, what good is it? If I get a check but I can’t buy health insurance, it doesn’t help me.
So for me, a basic income would include aggressive Pell Grants, improved Social Security, much more generous benefits for caregivers at home, a universal child allowance — it’s not just income, but universal services.
David Roberts
So you don’t see cash as fungible with those public goods.
Pavlina Tcherneva
No. In fact, the power structures in this world are such that cash doesn’t really afford you all the things people think it could afford you.
There’s an allure to this solution, send everybody a check. It’s very easy to do that. But what we are trying to do is provide people a decent life. Doing things for the community that are centered around care and rehabilitation is one way to do that.
There’s a magical thinking behind [UBI], that somehow if you get income, the market will provide what you need. We already know the market doesn’t provide what you need, even for people with income! You can still have a middle-income job and not be able to find affordable child care. That’s the problem.
For me, UBI is a false promise. And also, very dangerously, it is always used to eliminate the rest of the welfare programs that are much more targeted.
David Roberts
I’m sure you’ve heard this a million times, but what about the moral hazard argument? If you have this package of public benefits that can enable people not to work, who is ever going to use the job guarantee? Or if you’re guaranteeing the job, why will people work hard at them rather than just coast and draw a check?
Pavlina Tcherneva
A lot of people say this is like old communism, you’re going to create an underclass of lazy people. What you want to compare, though, is what mass unemployment does to people. It’s mass unemployment that creates all sorts of pathologies.
There’s just this vilification of folks who are on the lower rung of the employment ladder. And it’s becoming very clear that that is wrong. Until yesterday, economists were talking about sanitation workers as the unproductive workers, but it turns out, we can’t live without them.
Think about the people who experience the most abuse and exploitation, who are holding on to private-sector jobs because they don’t have an option. People working in unsafe conditions because they don’t have an option. The job guarantee would put pressure on those firms to match [federal] standards.
Jobs are not a lefty idea. When you survey it, they are far more bipartisan than basic income. I think we’re painting them as lefty liberal ideas, but they’re just the next step in social progress
David Roberts
The conservative knock on the minimum wage — and even more so on a job guarantee — is that it will drive small businesses under if they are forced to pay higher wages. By creating these de facto federal minimum job standards, you are competing with private businesses. Do you risk hurting the overall economy?
Pavlina Tcherneva
The question is, what’s going to be the overall impact on your life? It’s possible that you have to pay higher wages. But is your business going to be better off if all the folks who don’t have jobs today have them? Of course! We’ve modeled this: GDP goes up by $500 billion1, permanently, and private sector employment increases permanently by 3 to 4 percent. There is a positive multiplier effect.
David Roberts
People have jobs, therefore they have money, therefore they spend money, therefore business and employment increase. That’s the mechanism?
Pavlina Tcherneva
Yes. The comparison always has to be: What is your life now under the system of mass unemployment? What are your profits now under a system where there’s neglect in your community? If your community has jobs and people with stable income, your business is going to do better. Your cash registers are going to be ringing.
The second thing is, we’ve seen with large employment programs how quickly they kickstart the economy. You don’t have these jobless recoveries; you have a pro-employment recovery, a stable recovery.
David Roberts
Explain how unemployment is being used today, in macroeconomic terms.
Pavlina Tcherneva
Employment has this unique place in our thinking. We say there is something called “natural unemployment.” Nobody says there’s a natural rate of homelessness or a natural rate of poverty. We don’t say 5 percent of children should not have access to public education.
David Roberts
And we don’t get worried when 96 percent of children are getting educated.
Pavlina Tcherneva
But this is exactly what happens with unemployment. We say the NAIRU [non-accelerating inflation rate of unemployment, or “natural” rate of unemployment] is 5 percent. Because if, God forbid, too many people have jobs, they’ll be able to spend in the economy, and that might cause some prices to go up. Also, God forbid, wages might start rising, and that will increase costs for firms, and more prices will go up. Inflation looms ahead, so you’ve got to throw a few people out of a job.
I’m exaggerating, but that really is behind this idea of “stepping on the brakes” when unemployment gets too low.
David Roberts
Why has that fear of inflation persisted for so long? We haven’t had serious inflation in decades and none is on the horizon.
Pavlina Tcherneva
I’ll tell you, this is Groundhog Day. In about 10 years, somebody is going to tell us that the shock to the labor market was so big that the natural rate [of unemployment] became permanently higher. I’ve seen this ever since I became an economist. It’s really a justification of the inability of the policymaker to resolve the problem. You just label it “natural.”
Economists understand that this crisis has been a massive deflationary shock. But they’re still worried about a surge in inflation, at least over the medium term. https://t.co/cSXlIXcMjM
— Lisa Abramowicz (@lisaabramowicz1) May 3, 2020
David Roberts
Doesn’t preserving some unemployment out of fear of inflation also structurally shift power in the economy to employers? That doesn’t seem like a coincidence.
Pavlina Tcherneva
You put your finger on it. All of the problems people have with the job guarantee are about power relationships. We want to allow firms to pay poverty wages; we don’t want workers to demand higher wages; we don’t want people to have a choice, so they work under duress, beg and crawl and grovel to employers.
Labor has taken a beating since the New Deal. So the job guarantee will definitely restore some of its power, though again, as I say, we have so much more work to do; this is just the beginning.
The job guarantee is a counter-cyclical policy that doesn’t rely on people losing their livelihoods. It just says, okay, we understand private firms will lay people off, but we have an employment safety net that will capture them and help them transition to other employment opportunities.
The comparison is between the job guarantee and the unemployment counter-cyclical stabilizer. Take your pick: It’s either going to be employment or unemployment.
David Roberts
Walk me through how [the job guarantee] works as a counter-cyclical stabilizer.
Pavlina Tcherneva
We have a slowdown in economic activity. All of these housing developments, they’re not selling. So the developer is laying off a whole bunch of construction workers. Where do they go? Well, there’s a project here replacing lead pipes. We can hire them.
Lowe’s is also not doing so well, they’re not selling as many cabinets. So some of those folks are losing their jobs. But we have local projects doing weatherization — come on in.
The infrastructure is there to take some of those folks losing their jobs and provide opportunities as they need them.
Then the economy starts growing. Now, people are renovating again, conditions are improving. Private firms are accelerating economic activities and job postings. So [the jobs bank] is helping place folks. It’s the coordinating mechanism where people can return back to the old employer or find better employment opportunities. You can think about young people apprenticing, then stepping into better-paid jobs.
These flows that happen in and out of jobs, they’re not unique to the job guarantee. It’s the private sector that’s going to determine how many people get private-sector jobs.
It’s a type of [government] budget, right? It’s a budget that goes up with unemployment and shrinks with the reduction in public payrolls when the economy recovers. It is a much more robust counter-cyclical stabilizer and a much more disciplined way of spending than our current system.
David Roberts
If you want the jobs to be green or restorative, how do you enforce that at every one of thousands of local job centers? How do you ensure the jobs are oriented toward some sort of national purpose?
Pavlina Tcherneva
Let me just say this: In my ideal world, I would like the job guarantee to be as small as possible. I’d much prefer a robust public sector, public functions staffed adequately, and then a smaller job guarantee program.
I don’t want overcrowded schools or crumbling infrastructure. But that spending is not counter-cyclical. You don’t stop building a bridge because the economy’s growing, or build another one because of a recession.
At least in the New Deal, the jobs were always green; it was public service dedicated to improving the environment, whether soil renewal in the Dust Bowl or fire prevention.
David Roberts
How much was the [New Deal-era] Civilian Conservation Corps work about conservation versus just being work that was plentiful and didn’t require much skill so it could absorb a lot of people?
Pavlina Tcherneva
It was definitely a type of experimentation. Because we had so many millions of people unemployed, they had to find creative ways of putting them to useful work. That will be also the task for the job guarantee — it doesn’t matter who you are, if you want a job, we will find a way. Environmental work happens to be quite amenable to this. You want to do species monitoring, which is very important for the health of the Hudson River? You need a fish net; we will tell you what to look for and what to write.
I think this whole idea of an unproductive or unskilled person is not terribly useful. You could create useful jobs for anyone who comes along if that was the commitment. There are so many things that are neglected because of decades of austerity starving the public sector.
David Roberts
Are there extant models that we can look to here? Any country with a federal job guarantee?
Pavlina Tcherneva
Not a full national version right now. The only country that has a legal right to a job is India, and it’s not universal, it’s only for rural families. What’s interesting is that it’s a legally enforced right that is surviving under a very conservative new government. And even though it’s going to be under pressure — all of these [job guarantee] policies are always going to be under pressure — it is now an institution that people have the ability to fight for.
I was able to study [a job guarantee] in Argentina that was modeled after work I had developed with some colleagues at [the University of Missouri-Kansas City]. They put the policy in place as an emergency measure when they had 25 to 30 percent unemployment, similar to what we have now. They didn’t really pay good wages, but what was interesting is how it was organized — from the bottom up. It was community groups that decided what kind of projects they would have. The economy recovered very quickly and stayed with high growth rates for quite some time.
When you do these policies as crisis-response policies, you guarantee their untimely death. They will be phased out. People will say, well, we’re not in the crisis anymore, forget about the unemployed, let them figure it out.
But if you put them in place as a legally codified right, then you have an institutional structure to work with and improve upon.
Japan has had an industrial policy that has guaranteed employment to virtually everyone. They used to have between 1 and 2 percent unemployment, in the post-war period all the way through the 1970s. And they are holding on to this much more labor-targeted approach even today. It’s not quite the same thing as a guarantee. It’s more of a social acceptance or understanding.
Suicide rates are highly correlated to unemployment in Japan. And not just in Japan, but across the Western world, unemployment increases mortality. This is a shortcoming of basic income, because research on employment shows that a lot of these costs are non-monetary: the loss of social capital, depression, all these other things. Income alone doesn’t solve this. You also have to empower people in other ways.
If you account for all the costs we already pay, it’s far more bang for the buck to just give somebody a job.
David Roberts
Has anyone made the argument that a job guarantee would fully pay for itself, through all these knock-on social and economic benefits?
Pavlina Tcherneva
There are so many costs we can’t fully model, the social multipliers that bring about thriving communities, so it’s possible. But again, it’s very important to say this should not be a litmus test. Nobody says scrap the education system because we don’t have a good measure of whether it pays for itself.
David Roberts
Pavlina Tcherneva
I know, I know. But it’s an institution. It’s very hard to get rid of; we fight for it because it’s assumed to be guaranteed.
Social Security was declared bankrupt the first year it was passed; 78 years later, it’s still being attacked. But people defend it. They love it. They stand behind it.
When FDR did the [Works Progress Administration] projects, his conservative budget director told him, listen, if you reauthorize this pilot program, you may never be able to get rid of it. It has become so popular with people that folks are beginning to see the right to a job as a genuine right. And FDR didn’t reauthorize it.
That is a lesson to be learned. If you’re going to do these things, fight tooth and nail to make them permanent. Create the institution. And then improve.
Grafikoa
https://www.vox.com/xpress/2014/9/25/6843509/income-distribution-recoveries-pavlina-tcherneva
The most important chart about the American economy you’ll see this year
By Matthew Yglesias@mattyglesiasmatt@vox.com Sep 25, 2014
Pavlina Tcherneva‘s chart showing the distribution of income gains during periods of economic expansion is burning up the economics internet over the past 24 hours and for good reason. The trend it depicts is shocking:
Bideoa
The most important chart of 2014, explained in under a minute
This chart from Pavlina Tcherneva is a shocking illustration of how the US economy is broken. Matt Yglesias explains in 45 seconds.
(https://www.youtube.com/watch?v=SGoWEdGl82M&feature=emb_logo)
:no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/1400916/BuX2fpzIAAAZc77.0.0.jpg)
For a long time, most of the gains from economic growth went to the bottom 90 percent of the income distribution. And, after all, the bottom 90 percent includes the vast majority of people. Since 1980, that hasn’t been the case. And for the first several years of the current expansion, the bottom 90 percent saw inflation-adjusted incomes continue to fall.
The data series ends in 2012 and we don’t know how long the expansion will last, so that negative income trend may evaporate before all is said and done. But unless there’s a massive break with the previous three expansions we will continue to have an economy where the typical family’s living standards grow much more slowly than GDP growth per se would allow.
1 Amerikar bilioi bat = mila milioi europar.
joseba says:
What is a job guarantee—and how could it help us recover from the coronavirus?
What if anytime someone wanted work, there was a societally beneficial job—such as providing eldercare or planting trees—available to them?
(https://www.fastcompany.com/90501353/what-is-a-job-guarantee-and-how-could-it-help-us-recover-from-the-coronavirus?partner=rss&utm_source=twitter.com&utm_medium=social&utm_campaign=rss+fastcompany&utm_content=rss)
By Adele Peters
In the middle of the Great Depression, at a point when around 20% of Americans were unemployed, the Works Progress Administration put millions of people back to work building roads, schools, bridges, and other infrastructure. The Civilian Conservation Corps, another agency started as part of the New Deal, hired a “tree army” that planted 3 billion trees. Now, as so many Americans have suddenly lost their jobs that the unemployment rate could surge to the same level, it raises a question: Should the government begin creating jobs like this again, to make sure anyone who wants to work has work to do?
In a new book that will come out this summer, The Case for a Job Guarantee, economist Pavlina Tcherneva argues that the policy makes sense now—but it also makes sense even when the unemployment rate is low. The basic idea is simple. “I think of it as an employment safety net,” Tcherneva says. “If you go into the unemployment office, you can collect unemployment insurance. But what if we had a policy where you were provided a choice: either you take unemployment insurance, or if you’re looking for a job, we can guarantee you a basic employment opportunity at a minimum living wage pay with some basic benefits.”
The idea is likely to get more support because of the economic destruction of the pandemic. “I think that one way or another, we’re going to come to the realization that direct employment has to happen to get us out of this extraordinary situation,” she says. That may help lead to support for an ongoing program. “I really am hoping that if we emerge out of this moment, with a realization that we need some big employment policies, that this actually becomes a permanent feature of the policy landscape.”
There’s no reason to accept even a low level of unemployment, she says. In the same way that every child has access to public education, every adult could have access to a fairly paid job. “We don’t think of a ‘natural rate’ of illiteracy—we don’t say 5% of children should be illiterate,” she says. “But we say 5% of the labor force will be without a job at any given point in time, and that’s ‘natural.’ But there’s nothing natural about it. The public sector is still responsible for the unemployed in society. Unemployment brings unconscionable costs from people and their families. It’s costly. There’s a better way.”
There are a multitude of public service jobs that the government could choose to fill, from providing elderly or after-school care to rehabbing vacant properties, building flood control or fire prevention projects, or—as during the Great Depression—planting billions of trees, now with the understanding that massive tree-planting can help fight climate change. The transition that’s necessary to avoid the worst impacts of climate change will require huge changes, including installing renewable energy infrastructure, making buildings more efficient, reinventing economies in towns that once relied on coal mining, and protecting communities near coasts and rivers from flooding as the sea level rises and heavy storms become more common. All of that work can create millions of jobs, as Green New Deal proposals have called for.
Tcherneva suggests that unemployment offices, which exist in every county, could double as employment offices, coordinating with local nonprofits to understand what public service is most needed. People could still get unemployment insurance, and if a basic income existed, it could exist in parallel. But some people, for a wide variety of reasons, might want to leave the house and do some of the tasks that were available. By providing a living wage and basic benefits, Tcherneva says that it would also raise the standard for workers across the broader market.
No national job guarantee exists in any country yet, although several constitutions, based on the Universal Declaration of Human Rights, affirm the idea. (India also has a program that guarantees rural employment.) But there’s evidence that the policy could gain political support. One poll in 2019 found that 78% of voters supported a job guarantee; that included 71% of Republicans and 87% of Democrats. Now, it’s possible that number could be higher.
“This moment is certainly the right moment,” Tcherneva says. “It’s a bipartisan policy. It’s widely supported. A crisis moment will be by necessity a moment in which we put in place a whole host of big measures and policies. We’re not going back to the ‘normal.’ We understand that the normal is gone. And so the future is going to be dystopian, with a lot more unemployed people, with a lot more precarious work, with even what used to be safer jobs becoming more precarious and losing their basic protections. Or, we are going to be very actively engaged and engaged in this conversation of okay, what do we do going forward? That’s the moment where I think I would like to see a kind of rethinking of the safety net, and what is considered to be a basic standard—a basic opportunity for somebody to work.”
joseba says:
Green Jobs Are the Answer to the Coronavirus Recession
The climate case for making the government the employer of last resort
(https://newrepublic.com/article/156962/green-jobs-answer-coronavirus-recession)
By Kate Aronoff
March 18, 2020
The American economy is headed for a recession. As many as three million people could be out of work by summertime, even with a modest stimulus, the Economic Policy Institute predicted on Thursday. A new poll finds that, already, nearly one in five workers in the United States has faced layoff or a loss of hours because of the coronavirus. Among workers making less than $50,000 a year, that figure jumps to one in four. Jobless claims in Colorado have increased seventeenfold since last Monday. Thanks to the coronavirus and the shutdowns needed to fight it, people across professions now face months of lost wages: bartenders, musicians, bouncers, baristas, blackjack dealers, home health aides, waitstaff, retail workers, and flight attendants, to name just a few. Teachers working in public schools, whose funding depends on local tax bases, will also face harsh cutbacks as unemployment skyrockets. A recovery package could simply—and probably unsuccessfully—try to get the economy back up to where it was before the Covid-19 shutdowns took hold, complete with its decades of wage stagnation, exploding carbon emissions, and staggering inequality. Or, with politicians newly willing to spend, it could build a carbon-neutral, significantly stronger and fairer society—and put millions to work doing it.
In recent days, politicians have floated several commonsense short-term solutions—many of them originating with various social movements: paid leave; direct cash payments of $1,000 or more to American adults, possibly every month while the outbreak lasts; a moratorium on rent and utility payments—or at the very least on evictions and shutoffs. But as what may prove to be a deep and painful recession lasting far beyond the coronavirus sets in, more than quick cash and temporary relief will be needed. A breaking wave of corporate bankruptcies—an event the Fed is now scrambling to contain—could leave hundreds of thousands more unemployed in its wake. Helpfully, the magnitude of the Covid-19 threat has broken open the idea that deficits are more important than meeting pressing public health and economic challenges. Even Mnuchin told reporters on Tuesday, “This is not the time to worry about” the deficit, floating a stimulus that could add up to more than $1 trillion—a size Obama’s top economic adviser, Larry Summers, balked at a decade ago.
As the hardly radical New York Times editorial board wrote yesterday, even right now, while many of us are effectively housebound, the government could put to work those rendered wageless or unemployed by the coronavirus shutdowns, in a wartime-style mobilization to blunt its impact:
The government could train America’s newly unemployed to sanitize hospital equipment or to deliver food to the elderly and the immune-compromised. Child care for hospital workers on the front lines is desperately needed. Through a new public works program, corps of people could implement infection control in nursing homes and other high-risk facilities—or teach workers of all kinds how best to protect themselves. There could even be a network of individuals tasked with making phone calls to combat loneliness for people in nursing homes and prisons while they’re unable to receive visitors.
Before the immediate mobilization around World War II, the years leading up to it saw federal jobs programs employ millions in work the private sector simply didn’t see as important enough to create. The Civilian Conservation Corps and Works Progress Administration paid some 12.5 million people to do everything from planting trees to building bridges to writing plays. Full employment was an animating demand of social movements through much of the postwar era, which led to it being featured in the Democratic Party platform until 1980.
In more recent years, progressive economists and a number of current and former Democratic presidential candidates have backed the idea of a federal job guarantee consistent with a Green New Deal: The U.S. government would permanently become the country’s employer of last resort through a program that’s always in place but kicks into high gear during an economic downturn and then shrinks when people find work elsewhere in the public or private sector. One possible benefit to such a program is that it could provide an alternative to low-paid work bound up in carbon-intensive supply chains like those at McDonald’s and Walmart—currently the only employment on offer in many communities around the country. It could put people to work doing tasks the country urgently needs—including those that actively fight climate change and its impacts, instead of simply spewing carbon into the atmosphere. It’d be popular, too: 70 percent of voters support the idea of a federal job guarantee.
“They must be meaningful jobs,” said Coretta Scott King, a dogged job-guarantee advocate, when asked what government-provisioned work might entail in an interview tweeted out this week by historian David Stein, “in areas where there are human needs and in areas of education, medical care, housing. Those areas where there is a great shortage in terms of meeting people’s needs.”
As in the last recession, there’s a particular benefit to so-called “shovel-ready” projects—ones that can put people to work immediately. While it’s sorely needed, big infrastructure build-outs can now take months or even years to get off the ground, requiring regulatory approvals and bidding processes. Any major new direct-hire program would still take some time and careful planning to set up, but there’s plenty of work that could be done virtually right away. Much of it wouldn’t involve any shovels at all.
Researchers at Bard College’s Levy Institute have proposed that the Department of Labor could, in administering a federal job guarantee, make use of its already-existing American Jobs Centers around the country, which can compile repositories of available work that fulfill the desired set of criteria. “Municipalities, in cooperation with community groups, conduct assessment surveys, cataloging community needs and available resources,” Pavlina Tcherneva, author of the report, wrote in 2018, while the Labor Department itself would make “‘requests for proposals’ indicating that it will fund employment initiatives by community groups, nonprofits, social entrepreneurial ventures, and the unemployed themselves for projects that serve the public purpose,” with an eye toward not displacing existing employment. Much of this work would be green, and—in addition to any sort of bigger public works—could bolster the social infrastructure key to a more resilient and lower-carbon society. And that could start right away.
As The New York Times suggests, direct federal hiring could employ people to make phone calls to the elderly, checking in on people who might go days or even weeks at a time without talking to anyone at all. While for the duration of the pandemic this would have to be over the phone, once it’s safe these conversations could become regular visits, helping to meet the crisis of care head-on alongside federally supported universal childcare.
In cities, the formerly jobless could get to work making coastlines more resilient against future storms and floods. Tending community gardens in dense city areas could help alleviate the urban heat-island effect. And federally hired workers in the South could plant mangrove trees along the water, protecting against erosion as they suck up carbon dioxide, as part of a broader push to plant those Trillion Trees the Trump administration seems so keen on. Workers in the Permian Basin could clean up and reclaim decommissioned rig sites as nature preserves. There’s a multitude of ways we could employ workers to make agriculture more resilient to increasing temperature fluctuations—while simultaneously making it emit less, or even turning it into a carbon sink.
After months of Covid-19-induced isolation, bingeing Netflix and endlessly scrolling through social media, people are likely going to want to go out to be outside and among other people. Leisure was one of the biggest line items of New Deal spending programs, which sponsored everything from trails to hunting lodges and public beaches. Revivals of the WPA’s Federal Theater Project, Federal Writers’ Project, and Federal Art Project could give well-paid and steady jobs to performers who’ve spent months out of work due to coronavirus shutdowns, producing a new generation of plays, books, and even travel guides for all 50 states. Writers could be paid, as Zora Neale Hurston was, to collect oral histories to be archived in the Library of Congress. Direct-hire workers could plan music festivals in public parks around the country, with booths for local small businesses to sell craft beer and finger food sourced from farms in the area.
This isn’t an exhaustive list. It’s also not mutually exclusive with federal support for trade schools and graduate degrees to work in the clean energy sector, or union apprenticeship programs that can train a new generation of workers—including those transitioning out of jobs in the extractive sector—to electrify buildings and make them more energy-efficient. A wide-ranging federal green job guarantee has a number of potential benefits beyond the obvious: For example, by paying workers fairly, such jobs could establish a wage floor at $15 or $20 an hour—against which the private sector would have to compete. It could also institute a four-day workweek, which a growing body of evidence suggests would drastically slash emissions by cutting commutes and reducing the energy load from lighting and heating offices, with myriad benefits for both the climate and the way people live and consume.
Thinking creatively in such a dire crisis—about silver linings and opportunities—can feel inappropriate, even irresponsible. But the American right has already come up with a variety of stimulus ideas to funnel money to its allies. As evidenced by proposals underway to prop up the fossil fuel industry, the choice right now is between crisis responses that double down on the dangerous policies of the past few decades or those that help shift society and the economy in a better direction. How lawmakers respond to Covid-19 and its economic fallout could either protect the next century from the persistent crises threatened by rising temperatures, or make them far worse.
joseba says:
GUARANTEEING EMPLOYMENT DURING THE PANDEMIC AND BEYOND
(http://www.levyinstitute.org/pubs/pn_20_4.pdf)
PAVLINA R. TCHERNEVA
“Economic vandalism” is how the late Bill Vickrey (2004) described unemployment. Everything about the coronavirus response in the United States today suggests one thing tomorrow: guaran-teed and prolonged mass unemployment, the kind that most of us have never witnessed. When the CARES Act loan guarantees (with already extremely weak job protections) expire and firms face continued reduction in demand, the layoffs that did not take place during the pandemic will happen when the economy “reopens.” Whatever cash assistance we provide to families to keep them af loat now, millions of them will be scrambling for the pitifully scarce jobs of the post-pandemic world. And we know what many of those jobs will be: poorly paid, with no benefits or basic employment protections, much like the ones “essential” workers currently have (the delivery drivers, grocery store clerks, and sanitation staff). While lending and cash assistance help firms and families pay the bills, they are not job creation policies. They are not even reliable job protection policies.
What conversations will fill the halls of economic confer-ences, the Fed’s research offices, the chambers of Congress, and our TV screens tomorrow? Will experts tell us that the unprecedented global shock had created a wave of unemploy-ment that was just… inevitable; that, unfortunately, unemploy-ment has turned into a structural and impossible-to-tackle problem; that the natural rate of unemployment is now perma-nently higher, and the NAIRU1is in the double digits? We have seen this script before.
The avalanche of job losses today and mass unemploy-ment tomorrow are of our own making, created by our seem-ing inability to conceive of policies that protect and create jobs on demand. There is another option: instead of capitulating to a world of guaranteed unemployment, we can demand policies that guarantee employment. During the pandemic, the gov-ernment can protect jobs by acting as a kind of employer of last resort, while in the post-pandemic world it can create jobs directly via mass mobilization and a job guarantee (JG). In this environment, an employer of last resort backstopping payrolls, mass mobilization, and the JG are three different but organi-cally linked policies.
As our European counterparts have done (Carroll 2020), the government can promise to pay the wages of workers whose jobs are threatened by COVID-19. This can be done in mul-tiple ways. In some Scandinavian countries, the government participates in tripartite negotiations with firms and unions, working to minimize the number of layoffs and offering to pay the wages—effectively becoming an employer of last resort—of those workers whose jobs would have been eliminated.
Another method would be for the government to provide direct grants to firms, as several members of Congress have recently proposed,2 that would cover the wages of all workers earning up to a certain amount or of furloughed and laid-off workers only, with additional subsidies for operating costs. Each grant comes with explicit conditions to retain or bring back laid-off workers and use the funds as planned, without stock buybacks, dividend payouts, CEO compensation subsi-dies, or golden parachutes.
The funding is not the issue. The $2.2 trillion authorized in the CARES Act was enough to pay every single wage in the US economy for three months (Tcherneva 2020a). If any of the above methods were attempted (and the government paid a proportion of all wages), the budget could have protected jobs through the end of the year and possibly longer. Since more spending is on the way, it is not too late to pursue this strategy.
The government is essentially bankrolling private firms already and has the prerogative (nay, responsibility) to impose other stipulations, e.g., to require firms to offer hazard pay, guaranteed paid leave, and a minimum wage of $15/hour for all workers. This would have the effect of fortifying working conditions throughout large swaths of the labor market in the United States, where nearly half of all workers earn below $10.22/hour (Ross and Batemann 2019).
This policy would still not be sufficient to combat unem-ployment or poorly paid employment, but it would rapidly stem the hemorrhage. The US economy already lost 30 million jobs in just six weeks, which is greater (by about 7.5 million) than all of the jobs created in the previous 11 years of recovery fol-lowing the global financial crisis. How many million more jobs will we lose next month? The Federal Reserve expects unem-ployment to exceed its Great Depression levels (Johnson 2020).
Now is the time to plan a program that tackles the sec-ond epidemic: the social catastrophe that comes with mass unemployment. If we wait for the private sector to create the needed jobs, we shall be waiting too long. Jobless recoveries have become the norm for half a century now, and even when we managed to reach the lows of 3.5 percent unemployment in the months before the pandemic, economists were begrudg-ingly admitting that there was more labor market slack left.
To restore jobs, and good jobs too, the government must play a direct role in hiring the unemployed. To do this on short order it would need to launch large-scale public investment projects that create millions of good union and other well-pay-ing jobs at all wage and skill levels. There are other existential threats before us and there is plenty of work to do. The Green New Deal is the obvious place to start.
It is important to make clear that large-scale mobilization and direct job creation programs are not the same thing as ensuring that decent jobs are always available to anyone who is looking (Tcherneva 2020b). The only way to do this is through a JG—the third, and indispensable, piece of any comprehensive job creation and job preservation strategy. It is a program that guarantees anyone who walks into the unemployment office can walk out with an employment option that offers a mini-mum living income with benefits. The JG is a public option for jobs in the public service sector that offers on-the-job train-ing and assistance with transitioning to other employment opportunities.
Critically, the JG raises the wage f loor by establishing a labor standard for minimum pay and working conditions for all jobs in the economy. It is a policy that ensures that pre-carious and poorly paid work is extinguished along with the coronavirus by increasing competition in the labor market—competition for workers. Why toil away at $7.25/hour if the local green JG project offers $15/hour and Medicare? As an alternative to the most precarious private sector work, the JG pressures firms to improve their pay and benefits if they wish to retain and attract employees. Many private sector workers will get a pay raise, which in turn will boost spending, growth, and firm profits. Businesses that can only survive by paying poverty wages will no longer be viable; nor will those that use the “threat of the sack” to create the most difficult working conditions (wage theft, discrimination, harassment) for the lowest-wage and most vulnerable workers. The JG will give workers the power to say “no” to abusive employers. It will also act as a stepping-stone for young people entering the labor market, an employment opportunity for caregivers who wish to return to paid work, and a bridge to civilian employment for former inmates and veterans.
The bottom line is this: mass unemployment is avoidable. But having accepted it as an inevitable (even if unfortunate) circumstance during recessions and pandemics—and worse, as a perennial feature of the economy—we have painted our-selves into a corner, unable to envision a world or policies that prevent it and the pain it inf licts on families and communities.
The JG is the assurance that good jobs will be waiting when the economy turns the lights back on. The stronger the job protection policies now, the bigger and bolder the mobi-lization efforts tomorrow, the more nimble and effective the JG program can be. It remains the only policy that secures that essential, most basic economic right for all—the right to a decent, useful, and remunerative employment opportunity—at all times, good or bad.
Notes
1. The non-accelerating inf lation rate of unemployment.
2. See, for instance, the Paycheck Guarantee Act (https://jaya-pal.house.gov/wp-content/uploads/2020/04/OnePager_Paycheck_Guarantee_Act_04092020.pdf) and the Paycheck Security Act (https://www.sanders.senate.gov/download/pay-check-security-act?id=01B1D358-E02E-4D1B-8C20-6B0676414E72&download=1&inline=file).
References
Carroll, S. 2020. “The Race to Save Jobs: European Governments Step in to Pay Wages.” France 24, March 25. Available at: https://www.france24.com/en/20200325-the-race-to-save-jobs-european-governments-step-in-to-pay-wages
Johnson, J. 2020. “Fed Economists Warn US Unemployment Rate Could Soon Reach 32%—During Great Depression It Peaked at 25%.” Common Dreams, March 31. Available at: https://www.commondreams.org/news/2020/03/31/fed-economists-warn-us-unemployment-rate-could-soon-reach-32-during-great-depression
Ross, M., and N. Batemann. 2019. “Low-Wage Work Is More Pervasive Than You Think, and There Aren’t Enough ‘Good Jobs’ to Go Around.” The Avenue, November 21. Available at: https://www.brookings.edu/blog/the-avenue/2019/11/21/low-wage-work-is-more-pervasive-than-you-think-and-there-arent-enough-good-jobs-to-go-around/
Tcherneva, P. R. 2020a. “What If We Nationalized Payroll?” The Multiplier Effect, March 30. Available at: http://multiplier-effect.org/what-if-we-nationalized-payroll/
______. 2020b. The Case for a Job Guarantee. Cambridge, MA: Polity Press.
Vickrey, W. S. 2004. Full Employment and Price Stability: The Macroeconomic Vision of William S. Vickrey. Edited by M. Forstater and P. R. Tcherneva. Basingstoke, UK and Northampton, MA: Edward Elgar.
joseba says:
Will We Face Depression-Era Job Losses? Let’s Not Find Out
(https://www.nytimes.com/2020/05/09/opinion/federal-jobs-guarantee-coronavirus.html)
Congress should enact a federal jobs guarantee.
May 9, 2020
On Friday, the Labor Department announced that over 20.5 million Americans lost their jobs in April, bringing the unemployment rate to 14.7 percent. This level of devastation has not been reached since the Great Depression. With more than one in four companies shuttered to minimize the pandemic’s death toll and at least 30 million workers seeking unemployment benefits, we are in the throes of an unprecedented jobs crisis.
Just like the health crisis, economic fallout is hitting black and brown communities particularly hard. Far more black, Latinx, and Native American households are financially impacted or severely harmed by the coronavirus than white households. People of color make up an outsized share of the essential workers — grocery store clerks, bus drivers, janitors and home care workers — who risk exposure to the virus while earning low wages with few benefits.
While Congress has taken some important steps to provide relief, more must be done to keep people safe, prevent job losses and maintain incomes. We face a recession with the potential for Depression-era job losses, and we know from experience that black and brown workers bear the greatest risk of long-term economic setbacks. To ensure an inclusive recovery and a more resilient future, Congress needs to enact a federal job guarantee: a public option for a job with living wages and full benefits on projects that meet long-neglected community needs.
This idea is not new. The Humphrey-Hawkins Act — introduced in the 1970s by Senator Hubert Humphrey, a Democrat from Minnesota, and Representative Augustus Hawkins, a Democrat from California — proposed employment guarantees. The original bill allowed citizens to sue the government if they couldn’t find a job. A version of federal job protections has been percolating for years. In 2018, three Democratic senators — Kirsten Gillibrand of New York, Cory Booker of New Jersey and Bernie Sanders of Vermont — approved of the idea. Hundreds of scholars, leaders and organizations working for racial, economic and environmental justice have signed on to a Jobs for All pledge calling for a federal guarantee.
The coronavirus exposes the extreme vulnerability of a system that actively produces inequality. A job guarantee is a powerful solution that would not only address urgent needs but also bend our economy toward racial and economic justice.
As Pavlina Tcherneva, an economist at Bard College, described, some of these guaranteed jobs could be in disaster preparation and monitoring. We could hire workers to conduct the community-based testing, monitoring and contract tracing necessary to contain the virus and safely reopen the economy. Workers would be equipped with proper personal protective equipment, and could have access to child care provided through the program. Employment (rather than unemployment) offices across the country could identify and fill shortages of ventilators and masks.
The program would be funded by the federal government and administered locally, with community input to identify projects that address long-term physical and care infrastructure needs. Communities could implement energy efficiency retrofits and environmental restoration efforts to fight climate change. They could hire teacher’s assistants, child care providers and elder care aides to support our youth and seniors. And they could remediate brownfields and create new public art.
States and cities could also implement larger-scale projects, for example laying municipal broadband networks that plug disconnected communities into the modern economy — a divide made visible as public schools scrambled to implement distance learning.
By ensuring that everyone can have not just any job, but a good job with dignified wages, benefits, health care, safe working conditions and full worker rights, a job guarantee would deliver long-needed worker reforms. It would tackle poverty by providing a viable alternative for the 40 percent of workers who earn less than $15 per hour. And it would reduce racial employment disparities by guaranteeing good jobs for everyone, including black, Latinx and Native American workers who face hiring discrimination and are disproportionately relegated to low-wage jobs.
A federal commitment to universal employment has deep roots in the New Deal and the civil rights movement. The Works Progress Administration employed 8.5 million people over eight years, building infrastructure that supported and powered the nation over the next century. In 1944, President Franklin D. Roosevelt called for an Economic Bill of Rights, beginning with the right to employment. Martin Luther King, Jr., pushed for guaranteed jobs in his final years and Coretta Scott King led a grass-roots movement championing it.
An updated version of Roosevelt’s vision would increase bargaining power and expand the social safety net for all workers. By hiring workers at the beginning of a downturn, a permanent job guarantee would operate as an automatic stabilizer in perpetuity, maintaining consumer spending and protecting us from recessions — making our economy more resilient as well as more inclusive.
This time last year, no one would have predicted that a global pandemic would bring us to the brink of economic collapse. But we can predict with certainty that Covid-19 will not be our last economic shock. A job guarantee can mitigate this harm and usher in a more just and equitable economic future.
Angela Glover Blackwell is founder in residence at PolicyLink and host of the podcast Radical Imagination. Darrick Hamilton (@DarrickHamilton) is a professor and executive director of the Kirwan Institute for the Study of Race and Ethnicity at The Ohio State University.