More Job Guarantee Muddle

The Center for American Progress wrote a post today advocating for a job guarantee. As with similar posts written by others sympathetic to the idea, the CAP proposal was muddled and failed to offer any plausible jobs that could actually be offered in a JG program.

When you clear out the bloat, the proposal is as follows:

  1. There will be a “permanent program of public employment and infrastructure investment.”
  2. There will also be publicly-funded training to help people get private sector jobs.
  3. The program would target a certain employment rate, meaning that it would hire until the employment rate is hit.
  4. It “would not compete with existing private-sector employment.”

To better understand how this sort of JG program should work in practice, consider the following graph:

Screen Shot 2017-05-16 at 6.34.27 PM

In the graph, blue represents permanent public sector jobs. This refers to things like teachers, health inspectors, police, and other similar jobs. The defining feature of these jobs is that they are permanent, meaning that they will always be filled by someone. These jobs will not come and go based on the condition of the private sector. They will always exist and always crowd out the private sector.

The red represents the private sector. As you can see, when the red starts to shrink, the orange expands. That represents the job guarantee filling the gaps left by the flagging private sector and keeping the employment rate steady at 80 percent.

The key to the JG is finding jobs that are nice to have, but are not strictly necessary. You need jobs that can go unfilled when the private sector picks up.

Yet, here are all the jobs mentioned by CAP in its JG section: 1) home care workers for elderly people, 2) home care workers for disabled people, 3) child care workers, 4) teachers’ aides, 5) emergency medical technicians.

Do these seem like jobs that can go unfilled when the private sector picks up? Should child care and assistance for the disabled disappear when the economy is booming? No. These are blue jobs not orange jobs. They should exist on a permanent basis, not as a temporary home for dislocated workers.

This might seem like a nitpick, but it is not. Time and time again, popular advocates of the JG (not referring to the actual academics behind it) make this exact same mistake. They talk about how the JG would be a great way to wipe out unemployment and then they turn around and advocate for jobs that are not appropriate for a job guarantee program. CAP is right that we desperately need more public care workers, but that is precisely why those jobs would not work for a JG program.

Conceptually, the entire discussion around job guarantee would become so much clearer if people were made to distinguish between 1) ideas they have for permanently expanding the size of the public sector workforce, and 2) ideas they have for flexibly absorbing workers when the private sector workforce contracts. Right now, (1) and (2) are crammed together, creating a muddled debate that is mostly incoherent.