The idea of a national job guarantee (JG) is about to go mainstream. The concept is far from new
, but for the first time in decades, it is being endorsed by politicians with national stature. Sen. Bernie Sanders has promised
to submit a legislative proposal. Other Democratic presidential hopefuls
are showing interest. Academics, including Levy Economic Institute’s L. Randall Wray
and Pavlina Tcherneva
, have provided detailed blueprints for a national JG program.
No one denies that it would be nice if everyone who wanted to work could find a job, but before we start to beat the drum for a full-bore national job guarantee, we need a reality check. In a recent post, my Niskanen Center colleague Samuel Hammond
outlined three reasons to be skeptical:
- The private sector is better at allocating labor than public bureaucracies.
- A JG program would be too easily politicized.
- Other active labor-market policies, including wage subsidies, would work better than a JG.
These are valid points. Let me add three more reasons to be cautious about a national job guarantee.
4. Don’t exaggerate the pool of eligible candidates
As of April 2018, some 6 million people were officially unemployed, that is, counted as not working but actively looking for work. However, not all of those would be candidates for public-service jobs. Both in good times and bad, many of the unemployed are merely on temporary layoff or engaged in short spells of unemployment between jobs. At present, 33 percent of unemployed workers have been out of work for 5 weeks or less and another 31 percent for 5 to 14 weeks. Even in a bad year like 2010, nearly 40 percent of the unemployed were out of work for 14 weeks or less. Providing short-term in-and-out jobs for the temporarily unemployed is not the purpose of a JG. Even if offered such jobs, most of the short-term unemployed would probably prefer to keep looking for something more suited to their skills and interests.