FJG wrecks business confidence—the private sector knows they can’t compete

Providing people with access to jobs in areas that are struggling economically might sound like a good idea at first glance, but on closer examination it is deeply flawed and extraordinarily harmful. Creating a jobs guarantee program that would bankrupt our country, create unsustainable deficits, slow economic growth, and increase the government’s control over the labor market is one of the worst ideas radical Democrats have proposed Jobs guarantees effectively put government in charge of the labor market, by establishing baseline wages and benefits. Wherever there is a jobs guarantee program, private employers must pay at least what the government is willing to offer its employees and prospective employees through the jobs program. Because government does not need to worry about profits or operating efficiently, and because it often runs huge deficits, it has a large advantage over every business in the private sector, making it incredibly difficult for private companies to compete. That means job guarantees distort markets and drive employees out of productive businesses and into government jobs that might not even be needed. The proposal backed by Omar would be especially harmful, because it would incentivize local and state governments to enact policies that would increase unemployment rates. Doing so would provide them with access to job guarantee grants from the federal government. State and local governments with unemployment rates lower than 10 percent and less than double the national unemployment rate wouldn’t be eligible for the program. Over the long run, a jobs guarantee would also encourage governments to take over more parts of the economy. As more Americans sign up for the jobs program, additional new services would need to be offered by government to ensure its growing number of employees have work to do. This would slow the growth of the entire economy, because government is notoriously wasteful and inefficient. Take Amtrak, for example. In its nearly 50 years of operation, it has never broken even. In fiscal year 2019 it had one of its best years in history, but still lost more than $29 million. Job guarantees have become increasingly popular among Democrats as the party has shifted further to the left in recent years. In 2019, Sens. Cory Booker, D-N.J., and Kamala Harris, D-Calif., (now under consideration to be Joe Biden’s vice presidential running mate) introduced the Federal Jobs Guarantee Development Act, which would have created a three-year jobs guarantee pilot program. Rep. Alexandria Ocasio-Cortez, D-N.Y., a self-described socialist and close ally of Omar, included a federal jobs guarantee in her radical Green New Deal proposal, which was sponsored in the Senate by far-left Sen. Edward Markey, D-Mass. And in June socialist Sen. Bernie Sanders of Vermont joined far-left Rep. Ayanna Pressley, D-Mass., in supporting Renew New England, a coalition seeking to elect state-level candidates in the northeast who support regional Green New Deal policies, including a jobs guarantee. Of course, neither the federal government nor any state in New England has money available, even if taxes are raised, to pay for a costly jobs guarantee. The American Action Forum estimates the jobs guarantee included in AOC’s Green New Deal would cost from $6.8 trillion to $44.6 trillion over 10 years. No program in American history has ever been so expensive. Creating a jobs guarantee program that would bankrupt our country, create unsustainable deficits, slow economic growth, and increase the government’s control over the labor market is one of the worst ideas radical Democrats have proposed — and that’s saying a lot. Congress should instead enact policies that encourage people who lost their jobs due to the pandemic to get back to work in regions where it is safe to do so. Lawmakers should work with the president to reduce regulations to spur growth in key industries, and lower taxes for businesses that hire new employees or rehire existing employees. Programs like this will help our economy recover and reduce unemployment created by the coronavirus pandemic. Cutting government spending to offset costs associated with tax cuts, rather than creating new big-government programs, would be the right path forward. Americans don’t need an impossibly expensive far-left government program to turn our economy around. In fact, many of the programs being proposed now by Democrats like Omar, including her jobs guarantee, would have the opposite effect. These programs would stunt growth and make an economic recovery all but impossible. A strong private sector is the key to our prosperity and has made American the envy of the world. It can do this again as we recover from the pandemic. Socialism and communism have been economic disasters in every country foolish enough to adopt these systems, bringing needless suffering to billions of people around the world. The same would be true if make-work government employment proposals like those advanced by Omar and Ocasio-Cortez are enacted into law.