Four years ago September I posted about the subject of a
recent article, a vast social program designed to kill off unemployment
forever. That was not a guaranteed basic
income, on which I had written and would write more, but was similar in many
ways. The suggestion was for our federal
government to provide work for anyone officially jobless, at a consistent $15
per hour.
It is easy to compare or even conflate these two ideas. Both are grand plans defensible despite their
monumental costs. Both are, in a sense,
nuclear bombs against the jobs crisis. Each
would massively increase the amount of money in circulation, increasing tax
revenue to partially offset their outlays.
Each would be susceptible to claims that the amounts involved were
insufficient, especially as they would not be enough to support middle-class
lifestyles. However, their differences
are less obvious and more profound. What
are they?
First, while guaranteed income would cut overall demand for
employment opportunities, guaranteed jobs would increase it, especially at
rates of pay above or equal to the government wage rate.
Second, while universal basic income would have little
effect on the incentive workers have to perform well, assured government
employment would savage it. I don’t know
just how that would play out, but it seems clear that when people are assured
of being paid, many would not care about how effective they would be.
Third, guaranteed income would be relatively cheap to
establish and maintain, while a program with tens of millions of jobs would be
rife with labor needs, money needs, and complications. Our government would need to implement
solutions to a wide range of situations, such as workers who cannot or will not
do their assigned jobs, workers who want to change positions, people physically
relocating, advancement and training not pertaining to current assignments,
employee management and supervision (how could the millions of people needed
there be paid the same as their reports?), and so on.
Fourth, assured stipends would precipitate a profusion of
personal decisions, ranging from increased motivation to work from depression
relief to doing nothing but collecting checks and everywhere in between. Assured employment would create three tiers
of employment – positions paying more than, about the same as, and less than
the established government wage. That
would make it difficult for companies to obtain low-skilled labor at less than,
in this example, $15 per hour, whereas if they made it $16 they could be
flooded with applicants, with the likely result, with more time-saving
word-of-mouth hiring, a drop in the importance of job-seekers’ merit.
Fifth, while assured government employment would not be
cheap, its possible net $400 billion cost would be dwarfed by the $1-2 trillion
for a $10,000 annual American citizen’s grant.
Sixth, while guaranteed income would be straightforward, the
jobs program could quickly devolve into make-work, illegitimate favoritism, and
tasks with far less than $15 per hour value.
We could easily end up with the likes of, as the Soviets had, people
working in barbershops only to sweep up hair, crippling incentive for
productivity increases and with what might be deleterious personal effects such
as that country’s one-in-seven alcoholism rate.
We would like to think that inconsistent with our national character,
but millions working dead-end jobs with no real incentive for high performance
could attract the dark clouds that many observers have said have long hung over
the Soviet and Russian spirit.
In the late summer of 2014, while I acknowledged that
guaranteed employment was one of only four comprehensive jobs-crisis solutions,
with paid Internet contributions and reduced working hours along with universal
basic income, I did not think it would work.
That is still my view, but if we decide it is the best way out of an
indefinite job shortage, we could get the most of it by making its structure more
like the postwar job market. Government
work could be assured, but would need different skill levels, diverse rates of
pay, promotions, demotions, and be available to those not officially
jobless. The latest American Job
Shortage Number or AJSN shows that those with other employment statuses make up
more than two-thirds of latent demand – we cannot deny them these
opportunities.
Given its flaws, it is no surprise that assured government
employment has got little press attention since Senator Bernie Sanders proposed
it last spring. However, we still need
possible solutions for what will, within years, be clear to all as a permanent
jobs crisis. As you may have noticed
above, my count of them is still where it was five summers ago, at four. We cannot afford to stop there.
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