What Is a Jobs Guarantee—and Can It Work?
Is spreading because of a virus. My next guest says Unemployment can spread like a virus. And she's got a solution of federal jobs guarantee. Many economists consider unemployment natural, unavoidable, even necessary to a certain degree. For the economy to function. But Pavlina Channa, who specializes in what's known as Modern monetary theory, disagrees the virus theory well as economic downturns. Cause layoffs. The recently unemployed have less money to spend, leading to a second wave of unemployment in the industries, they could no longer support. But what if the government could guarantee a living wage stop to any American Who wants one. It's an economic policy idea that some of you may know has gained traction not only as Corona virus unemployment has spread, but from well known progressive political figures recently before this, Bernie Sanders Alexandria, Ocasio Cortez. Cory Booker have back versions of this idea, or at least believe it should be considered as a response to Income inequality in America generally and toe automation and toe. Other things that cause structural unemployment. It's part of the green new deal the federal jobs guarantee. So joining us now is Bard College economics professor Pavlina Chan of Ah, Who's got a new book called the Case for a job guarantee. Professor Chernova? Welcome to WNYC. Thank you for joining us. Thank you for having me, Brian. Good morning. Let's start in the present because you wrote this book before the pandemic when official unemployment was down around 3%. Now comes this historically weird emergency where the economy shuts down voluntarily, and tens of millions of people lose their jobs all at once. The government responds with a patchwork of enhanced unemployment benefits and pay cheque loans to employ yours intended to keep A lot of that money passing through to some workers, plus the other kinds of pre existing government aid, like Medicaid and food stamps and more with the guaranteed job program, replace all of that. Under current circumstances. No, it will not replace. Any other measures measures that that might might be be considered considered necessary, necessary, But But it it is is The The most most straightforward straightforward solution solution to to providing providing jobs jobs for for people people who who need need it. it. I I mean, mean, in in the the current current crisis, crisis, we should have focused on protecting jobs. And preventing the layoffs that would have made the task of dealing with this avalanche of layoff much easier. I think we can look to some countries in Europe who have used again the public purse government budgets. To essentially guarantee a payroll for folks whose jobs are threatened from Cove. It's so unemployment rates did spike in some of those countries, but not nearly as much as they did in the United States. So Onda budget that we pass the cares act was so large, it was enough to pay the entire wage bill in the U. S economy for three straight months. So we could have protected Lee off jobs. We could have prevented layoffs, but the damage is done and unemployment. As I argue in the book is it's kind of a perennial teacher and the economy. So the way to inoculate against that is just to create jobs directly. How much would the living wage B? And a guaranteed federal jobs program. The proposal in my book is for $15 an hour, and that is really to help with the fight for 15 of that has You know, has had captured the interest and policymakers with the state level, but it might be, But 15 will not be enough sooner. You know very, very recently, so in in in a truck Order rather so maybe 17. But this is a policy. This is a policy question. The point here is to ensure that it's a living wage floor and that no person Works in a poverty paying jobs with a firm. A living wage for the economy as a whole. The minimum wages you know, is 7 25 and it is not a living wage is poverty paying wage, so it represents about a doubling of the minimum wage. Significantly elevated the floor. Yes, And that's the federal minimum wage, which might be shocking to some of our listeners since the minimum wage. Around here is $15 an hour, but federally and therefore in some states that don't have the same politics, say New York and New Jersey. It's still down around that poverty wage. As you know. Other progressives proposed what they call a universal basic income rather than a guaranteed job. Andrew Gang, for example. Ran for president on $1000 a month Universal basic income proposal, But I don't believe there is a work requirement, just the money as a universal basic income. Sent to every American Do you argue that a guaranteed job solves the same problem, but in a different way? No, I think the job guarantee souls more problems. So $1000 a month. While very nice doesn't really lift people out of poverty. It helps But the job guarantee guarantees a living wage. And so when a person needs work, and they go into the unemployment office, which by the way is called the American job Center. They can find a lot of other assistance that they can't find a job. And that's what the job he does. It insures that there's a public service. Hollis option employment options for those who need work, and we know from basic income experiments that people who even get the income assistance still looking for jobs. So the problem with the job guarantee salt is this. Basically cruel game of musical chairs that people play in the labor market, and they're looking for four jobs, but they're not enough employment opportunities for all, even in the best of times. Forget about Cove it even when the economy is humming near full employment. We're still talking about millions and millions who don't have employment and The unemployment problem is there It's as you were saying in the introduction, ending a lot of social health, economic cost. It's paid for innocent and so we can do things better. By using the public purse to employ the unemployed. But I want to say that it's not. It's not a week requirement. The job guarantee doesn't provide a requirement for the benefits that people might be receiving. It's an additional program so You could have the choice of getting unemployment insurance and the various other income assistance provided out there. But if we gave people one more choice To pick up a living wage job offer. Then that provides stronger economic security.