Inflation Low; Sudden influxes in the cost of labor for businesses through a Federal Jobs Guarantee would trigger hyper-inflation.

#4: Inflation would rise. A sudden increase in the cost of labor for businesses will lead to inflation throughout the economy because of higher business costs that will need to be passed on to consumers. In addition, when only those at the bottom of the income distribution get a defacto raise to $15, there are upstream consequences. Workers who were making $15 an hour may demand $20 an hour now. Workers making $20 an hour might want $25 an hour and so on. This may seem like a benefit, but “this is a story of serious wage-price spiral, unless we introduce other measures,” warns progressive economist Dean Baker.5 We have been very fortunate that inflation has been well under control for the last few decades. A federal jobs guarantee could change that pretty quickly.

#5: It would be an administrative nightmare. Finally, matching millions of workers to the jobs envisioned under a jobs guarantee would be an administrative nightmare to implement. State and local governments will be tasked with finding the productive work to do, but how do we train millions of people to do these jobs? How does the Department of Labor oversee the millions of new jobs to make sure they’re legitimate? What are the qualifiers for the kind of work that’s eligible? What if a right-leaning state wants jobs done that a left-leaning federal government deems unproductive or socially unacceptable like building an oil pipeline or opening up a coal mine?

Finally, how does the federal government fire workers who are guaranteed a job? Tcherneva argues that workers can be fired for not showing up or threatening the safety of others, but what about extremely poor performance?

Conclusion

The gravitational pull of a jobs guarantee is understandable. Uncertainty around job stability and the future of work has left many people very nervous. They don’t know when their next raise is going to be, and they don’t know if their job is going to exist ten years from now. Some on the political left believe the federal jobs guarantee provides comfort to voters by ensuring that anyone who wants a job will be provided one by the government. But behind this catchy slogan are a series of substantive issues that potential supporters should seriously consider.