Double-Bind: A Federal Jobs Guarantee would need to pay premium wages to access any of the Aff’s impacts, which would implode governmental and small business costs.
Summers ‘18 – Lawrence “Larry” H. Summers is an economist. He doesn’t really do much. “Jobs for all? Take the idea seriously but not literally.”, The Washington Post, 07/02/2018; https://www.washingtonpost.com/opinions/jobs-for-all-take-the-idea-seriously-but-not-literally/2018/07/02/32a93c12-7dfa-11e8-bb6b-c1cb691f1402_story.html Accessed 07/03/2018 [via Wayback Machine] | RN
A first question is how much to pay. A program of last-resort employment could likely provide the minimum wage and low benefits. But that will not help those laid off from highly paid manufacturing jobs or those who expect to earn wages well above the poverty line. While such a proposal could help many young people, it is far from clear that it would connect with the principal concerns of Rust Belt adults.
On the other hand, if the guaranteed jobs paid premium wages, say double the $7.25 per hour national minimum wage, they would be an attractive alternative for a quarter or more of the workforce, raising questions of cost and economic disruption.
Suppose a $15 per hour guaranteed job drew 4 million additional people into the workforce and also attracted 10 million existing employees, just one quarter of those for whom it would represent a wage increase. The cost, once benefits, materials and supervisory needs are included, would, conservatively, be $60,000 per worker. That would increase government spending by $840 billion — one-fifth of the current federal total. If wages for the 30 million lower-wage workers who remained in the private sector went up by just $4 per hour, private-sector costs would rise by $240 billion. The burden would largely fall on small businesses and disproportionately hurt restaurants and other major employers of low-wage labor.