The cost of implementing a Federal Jobs Guarantee would skyrocket inflation and the program itself will be a Kafkaesque nightmare 🪲 which forces small businesses into wage competition with the Federal Government, decimating economic growth.

The costs, too, are daunting. Both the CBPP and LEI reports project costs ranging from $450 billion to more than $600 billion, which put the proposed programs in the same league with the Pentagon in terms of discretionary spending.

And while it is true that the cost of any of the federal jobs guarantee programs would be offset by savings in current unemployment insurance and poverty mitigation programs, neither of the estimates include costs of designing, staffing, and managing the proposed agency.

In terms of potential enrollees, estimates start at roughly 10 million. According to LEI's high-end estimate of 17.5 million enrollees, the program would have more employees than the combined head count of the U.S. Department of Defense, the Chinese People's Liberation Army, Walmart, McDonalds, the U.K.'s National Health Service, the China National Petroleum Corporation, the State Grid Corporation of China, the Indian Railways, and the Indian Armed forces.

A government organization of that size — 17.5 million job guaranteed individuals, with an untold number of administrators, managers, and other employees to attend to them nationwide — would become the largest public or private organization in history. It would also be the largest experiment in organizational efficiency in history, with the livelihoods of millions of newly government-dependent citizens hanging in the balance.

Wage Inflation

Another issue is the wage, which several plans recommend should be (or average) $15 per hour. With the increasing focus on "living wages," it will not be long before program directors discover that $15 per hour goes far further in Alabama than Hawaii, and the tendency will be to equalize cost-of-living disparities up, further increasing already massive costs.

Two other factors: both the CBPP and LEI plans fail to account for the potential disruption to existing businesses — mostly small businesses, the engine of economic growth in the United States — which will inevitably occur when workers earning less than $15 per hour leave their private sector jobs for higher-paying employment with job guarantee placement.

At present, more than 40 million Americans earn less than the proposed guarantee wage of $15 per hour, which could trigger a major shift of the U.S. workforce away from private employment, on to public rolls. It would also effectively force small businesses to compete directly against the federal government on the labor market.