I recently received another video from my good buddy (at least he feels that way to me!), Robert Reich at inequality.org. As an old New Deal Democrat, I was immediately drawn to the concept of guaranteed jobs at living wages. I kept Trump’s name in the title in the hope it might draw a few extra readers to the blog!
In the video Reich highlights some obvious flaws in our labor markets. Despite near record low unemployment rates, millions are not working because of “discouragement, discrimination and location.” Others, like myself, are working two or more part time jobs without health or retirement benefits. Nearly all workers, except for executives and those with high demand skills, have seen their wages stagnate in recent years as gains from economic growth increasingly go to the top 10, 5, 1 or .01% – take your pick.
Reich’s solution: guaranteed federal jobs in public service at an (undefined) “living wage.” This would inject government competition into the labor market, raise the floor” on wages and benefits, increase worker’s bargaining power with private employers and provide an automatic economic stabilizer in periods of recession. All these benefits and it will only cost $670 billion in the first year ($30 billion less than the Defense budget!), with future costs falling (when does that ever happen with government programs?) as incomes, consumer spending and tax revenue rise while welfare costs fall in a “virtuous cycle” of growth and redistribution – a “progressive utopia” indeed!
The idea holds appeal, but I think I’ll pass. First, it’s too expensive. Assuming we’re not going to drastically cut Defense, Social Security, Medicare & Medicaid, where will the money come from? Massive tax increases on the wealthy? This is certainly a post Trumpian notion, only possible if the modern Republican Party collapses as in the Great Depression/New Deal era. At present, there are no signs of that happening.
Second, it’s too bureaucratic. It’s doubtful the federal government could efficiently run such a massive program. Who would identify or create the jobs, and by what criteria? Who would supervise the workers, hire and fire, and by what criteria? How would you prevent cronyism and corruption from creeping into the process? If these jobs were truly better than their private sector equivalents, who wouldn’t want them? Would they compete with or crowd out private employment? Are these temporary or permanent positions? Do we really want to double or triple the federal workforce? Even FDR never contemplated that.
Third, it’s unnecessary. We already have the tools in our policy box to increase incomes: higher progressive taxes on the wealthy; raising the minimum wage; subsidized training and apprenticeship programs; Pell grants and especially strong support of private labor unions with sufficient legal protection and collective bargaining power to force corporations to share their excess profits. We could also expand the Earned Income Tax Credit (EITC) into a wage subsidy for a broader range of earners, perhaps to the bottom 60-80% of the population, so that “work pays” and no one working full time lives below, at or near the poverty line (a position well over 90% of Americans consistently support in polls).
In the end, there are numerous ways to decrease inequality and increase opportunity, and no one has done more to bring the problem to popular attention and pose solutions than Robert Reich. What is lacking, as he has pointed out, is the political will to pursue these policies and form a social movement for the common good (the title of his last book). This is the prevailing challenge of our time – who’s ready to join and fight for justice?