A Federal Jobs Guarantee trades off with over 50 million private sector workers.

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 , 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:

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?”2 Even 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.

#3: It could crowd out tens of millions of private sector jobs. There are currently 54 million people who earn $15 an hour or less. When they find out the federal government is offering $15 an hour plus benefits and permanent job security, many of those workers would quit their current job and join the federal workforce.3 Companies that could afford to would raise wages to keep some of these workers; other companies would simply go out of business. The labor markets would be controlled by the government in ways never seen before in America. And even if just half of low-wage private sector workers quit, the number of federal employees would rise by between 35 and 40 million.4 Costs to the government would then rise to anywhere from $1.6 trillion to $2.24 trillion per year, and the private sector would see massive repercussions.

#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.