Bills
| 3.23.22

Should the Labor Dept. Test a Federal Jobs Guarantee in 15 Communities for 3 Years? (H.R. 4278)

Do you support or oppose this bill?

What is H.R. 4278?

(Updated July 25, 2021)

This bill — the Federal Jobs Guarantee Development Act of 2019 — would select up to 15 communities across the U.S. with high unemployment rates to serve as pilot sites for a three-year program federal jobs guarantee program run by the Dept. of Labor (DOL). Under the pilot program, every interested adult living in the pilot communities would be able to participate in the program to obtain a guaranteed job. 

Jobs provided by the pilot program would cover high-need areas, such as infrastructure repair, childcare, senior care, and clean energy. They would pay a prevailing wage and offer paid family and sick leave and comprehensive wage coverage like that given to Members of Congress. Workers would maintain their jobs for the full three years of the pilot program.

Each pilot community would be required to create a “Community Job Bank” website to feature high-impact jobs. These would primarily be source by the communities themselves, as well as federal agencies, based on their needs and priorities. 

To incentivize private employers to recruit and hire participants out of the pilot program, this bill would expand the Work Opportunity Tax Credit by adding a new target group, the “Qualified Participant in a Job Guarantee Program.” This would mean someone who has participated in a job guarantee program for at least three months during the six-month period ending on their hire date with their new employer.

In order to accurately measure the pilot program’s effectiveness or lack thereof, this bill would authorize a rigorous evaluation of the program’s implementation and impact across a number of metrics. These would include: unemployment rates, private sector wages, safety net spending, and incarceration rates. 

Argument in favor

With high unemployment in many pockets of the country, as well as stagnant wages and paltry benefits across the economy, it’s time for the federal government to seriously consider the feasibility of a federal jobs guarantee. A limited pilot program to study this idea across the country is a relatively low-risk starting point to assess a federal jobs guarantee. By creating new employment opportunities, this bill would also help lift its pilot communities out of poverty.

Argument opposed

While politically appealing to the Democratic base, a federal jobs guarantee simply isn’t feasible at the national level as it would be extremely expensive and difficult to match workers with jobs. Rather than wasting political capital and federal dollars on a pilot program that’ll never yield a national-level program, it’d be far better to focus legislators’ efforts on other proposals that raise incomes, reduce wealth inequality, and boost employment in order to lift communities out of poverty.

Impact

Communities with high unemployment rates; unemployed persons; underemployed persons; employment opportunities in communities with high unemployment rates; private employers in communities with high unemployment rates; Work Opportunity Tax Credit for private employers in communities with high unemployment rates; and the Dept. of Labor (DOL).

Cost of H.R. 4278

A CBO cost estimate is unavailable.

Additional Info

In-Depth: Rep. Bonnie Watson Coleman (D-NJ) reintroduced this bill from the 115th Congress to create a three-year pilot program at the Dept. of Labor (DOL) to test the promise and impact of a federal jobs guarantee in up to 15 communities and regions experiencing high unemployment: 

“We have roads and bridges in disrepair, families that can’t find childcare, aging and toxic water infrastructure, and communities paying more for their energy costs than is necessary which means there are plenty of jobs available and unfilled. This is not the result of a lack of people willing to do the work, it’s a gap created because localities cannot afford to pay them. The Federal Jobs Guarantee Act creates a pilot program for the communities who need it most, giving good paying jobs to people who have suffered while both wages and opportunities have dwindled. The work they’ll do will make tangible improvements in those same communities and reverberate through the national economy.”

In a September 13, 2019, tweet thread about this bill, Rep. Watson Coleman added that this legislation “will provide jobs in... struggling communities that pay a living wage, provide healthcare and paid family leave and paid training.” She added, “Not only will this bill reward work, it will… [inject] life into local economies.”

Original cosponsor Rep. Ilhan Omar (D-MN) says: 

“In a 21st century America, the ability to find stable work should be a human right. This is not a Democratic or Republican idea—it is an idea that is overwhelmingly popular with the American people. Over a decade after the Great Recession, communities across the country are still suffering from low wages, inconsistent work, and a tax code that prioritizes the needs of the wealthy over working people. If we are going to build an economy that works for everybody, we as a nation have a responsibility to make sure everyone who wants work can find it. In 1968, Dr. Martin Luther King, Jr. called on our government to ‘guarantee a job to all people who want to work and are able to work.’ I am proud to join Senator Booker and Representative Bonnie Watson Coleman to make the vision of Dr. King’s vision a reality.”

Senate sponsor Sen. Cory Booker (D-NJ) says: 

“Both Martin Luther King, Jr., and President Franklin Roosevelt believed that every American had the right to a job, and that government would see to it that every person who wants to work would be able to. This legislation is an attempt to fulfill that ambitious vision. A federal jobs guarantee is a major investment in our country’s most valuable asset – our workers – by getting them off the sidelines and into the labor force with a living wage and meaningful benefits, like paid sick leave and safe working conditions. Addressing the entrenched structural hurdles that hinder workers’ success by offering bold solutions is how we strengthen the working class, grow the economy, and broaden prosperity and dignity for workers in this country.”

In separate comments, Sen. Booker adds that this bill speaks to fundamental American values: 

“We have been a society, for generations, that has had this fundamental belief that if you’re willing to work hard, if you’re willing to put in the grit and the struggle, you should be able to thrive and make it in America. When you have the kind of societal abundance that we have, if you’re willing to work, you should have a shot at economic stability and the American dream. We do not believe we should leave people behind to the ravages of unemployment and poverty.”

In broad strokes, proponents of a federal jobs guarantee argue that an increasingly service-oriented economy has left too many American workers behind due to underemployment or unemployment. They contend that the federal government should step in to correct this market failure by offering jobs to all who want them, thereby providing dignified work and livable wages in the rural and industrial economies that have seen economic stagnation or collapse over the past few decades. 

In a July 2017 article, Bryce Covert urged Democrats to make a federal jobs guarantee “the central tenet of the party’s platform.” He argued: 

“If Democrats want to win elections, they should imbue Trump’s empty rhetoric with a real promise: a good job for every American who wants one. It’s time to make a federal jobs guarantee the central tenet of the party’s platform. This is the type of simple, straightforward plan that Democrats need in order to connect with Americans who struggle to survive in the twenty-first-century economy. And while a big, New Deal–style government program might seem like a nonstarter in this day and age—just look at the continuing battle over the Affordable Care Act—a jobs guarantee isn’t actually so far-fetched. Americans overwhelmingly want to work: Most people say they get a sense of identity from their job and would keep working even if they won the lottery. Joblessness is even associated with poorer mental and physical health for entire families—not working appears to make us sick. And there’s already strong support for a jobs guarantee: In a 2014 poll, 47 percent said they favor such a program. A jobs guarantee holds the promise not just of jobs for all, but of a stronger and more productive economy for everyone. The biggest obstacle, in fact, might be the Democratic Party’s own timidity… [A]s [Democrats] look to rebuild the party after the fiasco of 2016, they have no choice but to go big. Voters don’t want a ‘new bargain for a new economy,’ or tax relief for small businesses. They want a decent job with decent pay. And Democrats—if they are bold enough to support a jobs guarantee—can give it to them.”

In a 2015 meta-analysis of more than 200 evaluations of programs meant to boost labor markets, a team of economists found that, while jobs guarantee programs may have a range of impacts depending on their designs, public employment programs that simply hired people directly were the worst performers. The researchers attributed this to the non-transferability of skills and employment experience from the public sector jobs to private sector ones:

“Public sector employment subsidies tend to have negligible or even negative impacts at all horizons. This pattern suggests that private employers place little value on the experiences gained in a public sector program—perhaps because many of these programs have little or no skill-building component.”

staff writer Annie Lowrey observes that guaranteeing a job for every American is a tremendous, and perhaps intractable, challenge: 

“[G]uaranteeing every American a job means guaranteeing every American a job. It means countering the job losses caused by recessions and automation and globalization one-to-one. It means finding work for people in every town in half a continent. It means accommodating the homeless, the violent, the drug addicted, and the illiterate in the workforce. It means expanding the Department of Labor to become something like the size of the Department of Defense, and yet bigger during a downturn. It is a trillion-dollar logistical puzzle, wrapped in a politically fraught stimulus effort, inside an experimental economic enigma. And none of these [current] proposals quite know how to solve it.”

The Center on Budget and Policy Priorities’ LaDonna Pavetti puts a finer point on it. While she acknowledges that the current proposals — including this one — on jobs guarantees are “enthusiastic,” Pavetti argues that they’re “underestimating how much work and how many services would have to scale up” in order to provide jobs to all.

This legislation has 23 Democratic House cosponsors in the 116th Congress. Its Senate companion, sponsored by Sen. Cory Booker (D-NJ), has two Democratic Senate cosponsors.


Of Note: The Hamilton Project at the Brookings Institution produced an analysis of the labor market considerations related to a national job guarantee in December 2018. Ultimately, the Hamilton Project analysis found a number of potential challenges with a federal jobs guarantee. Most importantly, it noted that such a program could potentially be enormous, with up to 50 million unemployed persons and another 50 million employed persons making less than $15/hour (100 million people total) eligible for participation. The Hamilton Project analysis also noted that there’s no way to guarantee participants will actually sign up for a guaranteed job, which may dilute a federal job guarantee’s effectiveness. 

From a cost perspective, the Hamilton Project concluded a full-scale federal jobs guarantee would likely cost hundreds of billions annually. Finally, on a macro level the Hamilton Project analysis acknowledged the considerable uncertainty around how a federal jobs guarantee would operate in the real world, and how it would affect the overall U.S. labor market.

However, even with these uncertainties, the Hamilton Project’s analysis also found that a federal jobs guarantee could raise wages for the bottom 80% of workers by as much as 5%. It also found that such a program would reduce poverty rates. 

Before neoliberals’ ascendance in the party, the Democratic Party saw dignified work as a cornerstone of the party’s plank. Franklin Roosevelt advocated a “right to a useful and remunerative job,” and this concept was a fundamental theme of Democratic politics for decades. 

However, ’s Bryce Covert writes, when George McGovern — who proposed a jobs guarantee as part of his platform — lost to Richard Nixon in a landslide in 1972, the Democratic Party’s newly ascendant neoliberal wing turned toward the center, which it theorized was the only way to win elections. With this shift, the Democratic Party mostly left employment issues to the private sector.

However, Jonathan Chait argues this is an oversimplification of the issue. Chait notes that Covert’s narrative leaves “a chronological gap of several decades between the virtuous Roosevelt and the craven modern neoliberals,” which serves as evidence of the fact that “figuring out how to give every American a job is actually a really hard problem, and that there may be a reason — other than a lack of concern for the well-being of the working class — that it hasn’t happened.” 

In fact, Chait observes, “designing a federal jobs program large enough to usefully employ all applicants is a devilishly complex challenge.” He points out that unlike proposals to implement universal day care access or single-payer health insurance, there are no good existing models to base a federal jobs guarantee program on. While advocates point to the Works Progress Administration (WPA) during the New Deal, the Argentinian Jefes program from 2001, and an Indian rural jobs program as potential models, Chait argues that those three cases are poor models because they all functioned in environments where the work involved required relatively little training or equipment, which isn’t the case when it comes to a wide-scale federal jobs program. 

This is especially true given that most jobs guarantee proposals seek to meet unmet needs in healthcare, home care, schools, and social services (such as emergency medicine) — all of which require training, some degree of schooling, and skilled labor. The mismatch between the workforce’s skills and the labor market’s needs is, therefore, an “enormous managerial challenge.”

In lieu of a federal jobs guarantee, Chait argues that it’d be better for Democrats to focus on “plenty of better-developed policies that can help lift incomes for poor people,” such as proposals to raise taxes on the rich to pay for expanded health insurance, universal pre-K, or a large-scale public infrastructure. He argues that slotting the “half-baked” concept of a federal jobs guarantee ahead of such policies is “at best, wildly premature.”

The Center for American Progress (CAP), which released its own federal jobs guarantee proposal in May 2017, argues that “[e]ffective solutions must recognize the importance that Americans attach to the dignity of work” and acknowledge the “[e]conomic frustrations [that] arise when work at a living wage becomes impossible to find.”


Media:

Summary by Lorelei Yang

(Photo Credit: iStockphoto.com / artisteer)