FJG wrecks bizcon for small businesses—they think they can’t keep up with federal wages or benefits

When it comes to the Federal Job Guarantee plan, Caponi’s discussed impacts show how a massive public sector work project can have many drawbacks to the private sector. In Greg Ip’s Wall Street Journal article titled The Problem with a Federal Jobs Guarantee (Hint: It's Not the Price Tag), Ip discusses the challenges that the private sector will face with wages, inflation, and technology after the implementation of the Federal Job Guarantee plan. First in order to keep many of the workers that make less than $15/hour, the private sector will see massive salary increases. Employers will be forced to raise the salaries of their workers, because they do not want to lose their labor, similar to a $15 minimum wage effect (Ip, 2018). This will lead the companies to potentially raise the private sector causing rise in customer costs to offset their short-term losses in revenue. This raised cost on customers will negatively impact certain businesses more than others (Ip, 2018). Policies such as this will positively impact labor in big firms like Wal-Mart that can afford offering health benefits or wage increases (Ip, 2018). But these policies will hurt smaller firms to a mega scale, that cannot offer the same benefits as the public sector would with Job Guarantee. Overall this may intensify the oligopoly market that we have in the country, because many small businesses or start-ups, will be unable to meet labor or revenue demands to stay afloat (Edwards, 2016). This would make many argue that the Job Guarantee plan will not be very positive for the private sector as a whole. It may force labor or employment changes against the market need, that may help some, but forced changes have mixed effects from unequal benefits. Whenever we add money to the market or change wage floors, we see various inflationary pressures that will reduce the value of the dollar in the short-term.