Fails – too expensive and lack of support

Ensuring people have the opportunity to work and earn a good life is a shared value across the country. But, the federal jobs guarantee approach raises a number of concerns. And voters seem to be wary of it. In our polling, only 9% support a new program that guarantees a full-time government job—36 points less than those who support a new program where government works with business to create more good-paying jobs in the private sector. Among just Democrats, the divide was starker: 14% support a federal jobs guarantee while 59% want government to work with business to create private sector jobs.

Politics aside, the federal jobs guarantee raises five substantive concerns.

#1: It solves a different problem. Right now there are over seven million open jobs and six million unemployed people. Yet, many of these jobs are going unfilled. Why? Many people don’t have the right mix of skills or training. New jobs are often in different places than old ones. Childcare and transportation are often prohibitively expensive. And others struggle with opioid addiction and other conditions. And yet, a federal jobs guarantee doesn’t address any of this. Even during economic downturns, there are better and far more efficient ways to help workers and communities such as targeted public works programs, hiring credits for employers, temporary tax cuts for working families, extended unemployment insurance, and money to shore up state and local budgets.

#2: The cost is enormous. A federal jobs guarantee will cost at least hundreds of billions of dollars per year and much more during a recession when the employment rolls for the government would naturally increase. Here are the cost estimates from both plans based on people participating in the jobs guarantee:

10 million people

15 million people

Paul et al Plan

$560 billion/year

$840 billion/year

Tcherneva Plan

$468 billion/year

$702 billion/year

With annual federal outlays at roughly $4.5 trillion, we’re talking about anywhere from a 10-20% increase in spending to pay for the jobs guarantee. As for how to pay for it, advocates are split on whether it should be paid for at all. Paul et al. provide a few possible tax increases but don’t devote much attention to the matter. Stephanie Kelton says, “What the models show is you can do this without creating an inflation problem and therefore why would you pay for it with tax increases of one kind or another?”2Even though the cost of the program could be partially offset through decreasing social assistance costs, it’s still very uncertain how and when these savings would materialize. What we’re left with is a new program taking up funding that could be used instead for things like increased childcare, training support, expanded health care coverage, and more.