Bernie Sanders' Federally Guaranteed Jobs Program Defies All Reality
One of Bernie Sanders' latest policy ideas is for the federal government to guarantee all Americans a full-time job that pays at least $15 an hour. As noble as the goal may be, such a policy goal is completely untenable, and would wreak havoc across the entire country's labor market.
As economist Michael Strain points out, such a policy is just not going to work because the federal government could not afford to finance such a program.
In 49 states, the bottom 25 percent of wage earners are paid less than $15 per hour. There are two states, Arkansas and Mississippi, where half of all workers earn hourly wages less than $15. Throw in benefits, and my back-of-the-envelope calculation finds over 80 million workers who earn less per year than the government would be obligated to pay them under this proposal. And in addition to workers, more than 100 million non-working Americans would be free to avail themselves of this guaranteed job, as well.
Taxes could never be raised and existing programs could never be cut enough to finance this policy at the level required. The government could not possibly come up with enough jobs to satisfy its obligations under this plan, and it would wreak havoc on the private economy.
That idea is pretty easily tossed out, but there are other considerations that Strain thinks are worth thinking about. Two of those include the federal government's role in helping people get jobs who want to work, and debunking the myth of "good" and "bad" jobs.
The government can have a role in helping people get to work, especially during times of economic downturn. Some of the ways that Strain believes the government can help are with earned income tax credits, and work-training programs.
The right place to start is with policies to help individuals become more successful workers. One example is the federal earned-income tax credit, which uses taxpayer dollars to subsidize the earnings of low-income, working households. By increasing the financial rewards of working, previous EITC expansions have pulled people into the workforce. Or take work-based learning programs, like apprenticeships, which can be successful by combining skill-building with formal instruction in order to increase workers’ productivity and wages.
The goal of any such program is to create private sector jobs that may not otherwise exist. The subsidized employment approach could be done in an area where the labor market is depressed, and the results used to provide possible policy paths for other areas of the country.
The other issue that Strain believes it worth discussing is the idea that there are "good" jobs and "bad" jobs.
True, working in a hot kitchen, cleaning bathrooms, doing manual labor outdoors in the summer heat and the like can be physically demanding, and such jobs often pay relatively low wages. It’s easy for someone like me who works in a comfortable office and pecks at a keyboard to extol the dignity and virtue that comes from work.
But you know what? Work confers dignity and is virtuous. Flipping burgers for $10 an hour isn’t a “bad job.” It’s an opportunity to build skills and climb the employment ladder. It’s an opportunity to provide for yourself and your family. It’s an opportunity to make a contribution to your community and to society.
There is value in work, no matter what kind of work. The jobs that pay below $15 an hour (what some call a "living wage") are often ones that may be less pleasant than white-collar office jobs, but work gives a necessary dignity and that cannot be disparaged in our society if we want to help people work up the ladder.
What are your thoughts on this topic? What can the federal and state governments do to help get more people to work? Share your thoughts with us!