The Job Guarantee as an Alternative to Enforced Idleness. But What Will They Do? Examples from the WPA
As I concluded in my previous blog:
Olly Olly Oxen Free: it is safe to come out of the dark. A sovereign government faces no financial constraints. We can have payroll tax holiday extensions and unemployment benefit extension. Heck why don’t we go whole-hog and actually create jobs for the unemployed? We need 25 million of them. We can afford them. All we need to do is to find useful things for them to do. That ain’t hard.
The Conservative belief that there is some law of nature which prevents men from being employed, that it is “rash” to employ men, and that it is financially ‘sound’ to maintain a tenth of the population in idleness for an indefinite period, is crazily improbable – the sort of thing which no man could believe who had not had his head fuddled with nonsense for years and years… Our main task, therefore, will be to confirm the reader’s instinct that what seems sensible is sensible, and what seems nonsense is nonsense. We shall try to show him that the conclusion, that if new forms of employment are offered more men will be employed, is as obvious as it sounds and contains no hidden snags; that to set unemployed men to work on useful tasks does what it appears to do, namely, increases the national wealth; and that the notion, that we shall, for intricate reasons, ruin ourselves financially if we use this means to increase our well-being, is what it looks like – a bogy. –John Maynard Keynes 1972, 90-92
I should think it is obvious that we’ve got plenty that would keep 25 million pairs of hands usefully busy. But maybe it is not. After decades of “fuddled” brains, maybe it is difficult to come up with tasks. Let us look to the past for some examples—back to a time when people were (apparently) still able to engage in rational thought. Let me draw on my co-authored paper, Universal Job Guarantee Program: Towards True Full Employment, by L. Randall Wray and Yeva Nersisyan for examples of useful activities to be pursued by a job guarantee (JG) program.
While neoliberals and their ancestors have managed to taint the memory of the New Deal’s job creation programs, the truth is that these programs provided lasting benefits. The nay-sayers actually began to fabricate falsehoods about the program and its participants from the very beginning. With corporate funding and ready access to the media, they painted a picture of lazy tramps leaning on shovels. But the evidence is still plain to see, in the form of public buildings, dams, roads, national parks, and trails that still serve America. For example, workers in the WPA (Works Progress Administration):
shouldered the tasks that began to transform the physical face of America. They built roads and schools and bridges and dams. The Cow Palace in San Francisco, La Guardia Airport in New York City and National (now Reagan) Airport in Washington, D.C., the Timberline Lodge in Oregon, the Outer Drive Bridge on Chicago’s Lake Shore Drive, the River Walk in San Antonio….Its workers sewed clothes and stuffed mattresses and repaired toys; served hot lunches to schoolchildren; ministered to the sick; delivered library books to remote hamlets by horseback; rescued flood victims; painted giant murals on the walls of hospitals, high schools, courthouses, and city halls; performed plays and played music before eager audiences; and wrote guides to the forty-eight states that even today remain models for what such books should be. And when the clouds of an oncoming world loomed over the United States, it was the WPA’s workers who modernized the army and air bases and trained in vast numbers to supply the nation’s military needs.” (Taylor, N. 2008. American-Made: The Enduring Legacy of the WPA: When FDR Put the Nation to Work. Tantor Media p. 2)
The New Deal jobs programs employed 13 million people; the WPA was the biggest program, employing 8.5 million, lasting 8 years and spending about $10.5 billion. (Taylor p. 3) It took a broken country and in many important respects helped to not only revive it, but to bring it into the 20th century. The WPA built 650,000 miles of roads, 78,000 bridges, 125,000 civilian and military buildings, 700 miles of airport runways; it fed 900 million hot lunches to kids, operated 1500 nursery schools, gave concerts before audiences of 150 million, and created 475,000 works of art. It transformed and modernized America. (Taylor 2008 pp. 523-524)
In many important respects, America is broken again. Its infrastructure is not worthy of a rich, developed country, as recognized by President Obama in his last “state of the union” address when he called for new investments to answer the challenges posed by China. The nation’s public buildings, its roads, its bridges, its playgrounds and parks, and many of its schools are in need of repair. We do not want to over-emphasize public infrastructure investment, however. The needs are at least as great in the area of public services, including aged care, preschools, playground supervision, clean-up of public lands, retrofitting public and private buildings for energy efficiency, and environmental restoration projections.
A new universal direct job creation program would improve working conditions in the private sector as employees would have the option of moving into the JG program. Hence, private sector employers would have to offer a wage and benefit package and working conditions at least as good as those offered by the JG program. The informal sector would shrink as workers become integrated into formal employment, gaining access to protection provided by labor laws. There would be some reduction of racial and gender discrimination because unfairly treated workers would have the JG option, although, JG by itself cannot end discrimination.
Finally, we would also like to emphasize that a JG program with a uniform basic wage also helps to promote economic and price stability. The JG will act as an automatic stabilizer as employment in the program grows in recession and shrinks in economic expansion, counteracting private sector employment fluctuations. Furthermore, the uniform basic wage will reduce both inflationary pressure in a boom and deflationary pressure in a bust. In recession, workers down-sized by private employers can work at the JG wage, which puts a floor to how low wages and income can fall.
34 Responses to “The Job Guarantee as an Alternative to Enforced Idleness. But What Will They Do? Examples from the WPA”
I don't see the types of employment you list (WPA-style projects) as matching up with the idea of a buffer pool of temporarily unemployed workers of unknown skill sets.
If you want to build bridges and buildings, or repair roads or water systems, you want to have mostly skilled workers, including some with specialized degrees, and a high degree of job continuity. You don't build roads with shovels anymore, you use bulldozers and other machines that require specialized training. You can't tear up a sewer system or a freeway and then, in the middle of the project, say "Oops, we're at full employment, all our workers have gotten private sector jobs at higher pay, we'll have to put off the rest of the project until the next recession".
Not to mention that there are such projects going on all the time, and there are private sector companies and unions doing them. It should be an objective of the JG program to avoid competing with such ongoing activities for projects or for labor.
This is not to say that more such projects should not be undertaken. If done with additional deficit spending, they would help the economy. It is a political decision, though, whether such economic help should be done with additional Federal projects, or by reducing taxes, or by block grants to States.
Building and maintaining trails in the National Parks, good idea, probably ought to be done on a permanent basis with permanent workers. Don't let the trails get overgrown because the economy is doing too well.
Sew clothes – been to the mall lately? Don't we have enough clothes already? What would those mall workers do if the government were their competition?
Stuff mattresses? There are mattress stores in every mall, not to mention signs planted in the ground at every intersection.
Serve hot lunches to school children? That's already (still?) being done, but by unionized food service professionals.
Deliver library books on horseback to remote hamlets? Things have changed since the 1930's.
Aged care: we already have many forms of that, from independent living to full-time nursing care, and everything in between. Perhaps some low-income people could use some financial assistance with that, but I don't see the government providing near-minimum-wage workers for that purpose, to compete with the established private sector businesses (which hire skilled professionals for most of the jobs involved).
Playground supervision? Really? Some unemployed guy off the street to watch over children? I think most parents would say "thanks, but no thanks" to that one.
Cleanup of public lands. OK, that's one. We have prisoners picking up trash along the highways now, but then again we also have private enterprise doing it, and other businesses paying for it, in return for their name on a sign. I suppose even that would be better done by just adopting the orphaned miles. "This highway maintained by the Bureau of Labor Statistics". And when unemployment reaches 2%, they just stop paying for it.
None of these tasks (projects, really) are of a "buffer" nature, that can easily be turned on and off. Very few are not already being done, at least to some extent, many in the private sector. Some funded by government, but performed by private sector contractors. One can argue that we should be doing more of them, but either on a permanent basis or as regular government projects, not JG activities.
The WPA performed work fitting hundreds (or more) of job descriptions. The examples given come from the historical record and press from that time; it makes no sense to criticize them or try to somehow demonstrate that they do not fit in the world anymore. It is easy to imagine that plenty of jobs could be created using the many highly-trained people who cannot find work today.
One of the biggest problems facing the US now and moving forward is our now-woeful infrastructure. Another is how we become when we cannot contribute to ourselves or the society around us without WORK.
Programs like the WPA should be in place ALWAYS – REGARDLESS of economic conditions. They can fill in spaces in American life that cannot be filled by a purely profit-driven paradigm.
I don't see the FJG program as competing with the private sector. What it will do is to set a floor on the total compensation the private sector will be able to offer. For example, if the FJG wage is $10 per hour in the region of the country where the cost of living is lowest, and is adjusted up ward based on the cost of living, and also provides full fringe benefits including Medicare for FJG works then the private sector will be easily able to beat this Federal competition, simply by offering greater total compensation in those areas where it wants to compete.
Once private sectoremployers beat the FJG total compensation level in a specific area of activity, the FJG program will not compete by raising the total compensation it offers. It will allow the private sector employers to hire away every FJG employee if that's what the employers want to do.
On the other hand, if the employers don't feel that they want to hire people at total compensation levels exceeding the FJG level, then the private employers will simply not hire, but the consequence won't be millions on the unemployed roles, sitting home and doing nothing, or taking part-time work at subsistence levels of total compensation. It will simply be that they will work on FJG tasks until private sector employees get sufficient levels of entrepreneurial spirit to employ them.
What's wrong with that? It might even result in an increase in wages allowing increased consumption and a robust private sector recovery that isn't limited to the financial sector.
You forgot to mention this from your previous post:
"Personally, I'd rather see the government build and operate golf courses in every town, with $1 greens fees."
Thank me later … but for now, please add more details to that! We can add it to the list of projects to do.
That's the theory of it. I like the theory.What I can't get straight is whatthe workers will do. A different problem, but $10 an hour plus full fringe benefits is way more than the current minimum wage. Who would work at McDonald's for $7.75 and no benefits if they have this alternative?What would McDonald's have to charge for a hamburger if they have to paythat wage, or better, and who would buy them? Not that cheap hamburgers is a public benefit so much, but there are lots and lots of minimum wage jobs that would simplygo away if the JG wage were set so high. I'm thinking it should be somewhere in between current unemployment benefits and minimum wage, not above minimum. But, assuming the JG wage is not set so high as to attract workers from the private sector, there isa different competition problem. If Joe Firestone's Elder CareCompany runs assisted living facilities and nursing homes, using skilled workers, and the government comes along and uses JG workers to do the same thing,how are you going tooffer similar services at a competitive price?You're out of business, and all your nurseswill suddenly become JG workers, to their great financial discomfort. Dr. Wray has used the term “race to the bottom” in another context, but I can't imagine a faster way to get us all there. The JG workers must do things that 1. Aren't being done now, either in the private or public sector, and 2. Won't be missed when the economy improves and they are hired away from JG I have yet to hear ofthe tasks that meet those criteria. <DIV> <DIV id=SkyDrivePlaceholder></DIV> From: email@example.comTo: firstname.lastname@example.orgSubject: JoeFirestone replied to your comment on The Job Guarantee as an Alternative to Enforced Idleness. But What Will They Do? Examples from the W
Re Burgershirt’s claim that “the WPA performed work fitting hundreds (or more) of job descriptions”, that proves nothing. The important question is the PROPORTION of WPA projects devoted to civil engineering and other tasks. According to Wiki about HALF of WPA spending was on engineering type schemes (roads, bridges, etc). Thus Golfer2john is right to say the WPA was heavily biased towards this type of spending.
As regards Birgershirt’s idea that WPA/JG “can fill in spaces in American life that cannot be filled by a purely profit-driven paradigm”, Burgershirt may not have noticed but about a third of GDP is ALREADY DEVOTED in the U.S. to public sector or “non profit-driven” activity. The proportion is even higher in many European counties. Thus the fact that WPA/JG can perform non-profit driven activities is irrelevant.
Golfer2john (above) is right. As he says, skills available amongst the unemployed do not match up well with the skills required for civil engineering work (or for care homes for the elderly come to that). Second, civil engineering projects cannot be turned on and off at will, depending on unemployment levels.
In the UK, care homes have extreme difficulty finding suitable staff, despite high unemployment.
Next, the whole WPA idea is caught between a rock and a hard place, as follows. If the employees on a WPA schemes are largely ex-unemployed, they’ll have a very unsuitable range of skills (if they have any skills at all). On the other hand if a WPA project is composed largely of PERMANENT and/or skilled labour, the project becomes the same thing as a normal regular employer (public or private sector).
So why not allow every employer in the country to take on a limited number of subsidised employees – wages paid by the taxpayer? It would come to much the same thing.
Employers cease hiring when the marginal product of labour falls below the min wage / union wage, etc. Under the latter subsidised employee system, employers would take the marginal product of labour to a lower level: i.e. employ more people.
"A different problem, but $10 an hour plus full fringe benefits is way more than the current minimum wage. Who would work at McDonald's for $7.75 and no benefits if they have this alternative?What would McDonald's have to charge for a hamburger if they have to paythat wage, or better, and who would buy them? Not that cheap hamburgers is a public benefit so much, but there are lots and lots of minimum wage jobs that would simplygo away if the JG wage were set so high. I'm thinking it should be somewhere in between current unemployment benefits and minimum wage, not above minimum."
$7.75 with poor fringe benefits is not a decent living wage Can pay a decent ,living wage or not? If it can't then I think it ought to go out of business. It will then be replaced by local businesses that may charge a bit more for a hamburger but that will be able to pay such a wage.
On miniwage jobs going a way if FJG jobs are available, I say let them go away. Then more people will be working at a living wage doing things that really provide value relative to public purpose and not make work to push low value and unnecessary products.
Look I think you have a severe bias toward keeping wages low and unemployment high so that current private companies that exist because they exploit people can continue to exist. It is because of the existence of these companies and our willingness to faor them over the past 40 years that the US has among the worst levels of inequality among developed nations. The way to heal this problem is to provide FJG jobs, pay living wages and let those companies adjust. If they survive then fine, they deserve to exist! But no company that can't afford to oay a decent living wage to its employees ought to continue to exist in my view.
"If Joe Firestone's Elder CareCompany runs assisted living facilities and nursing homes, using skilled workers, and the government comes along and uses JG workers to do the same thing,how are you going tooffer similar services at a competitive price?You're out of business, and all your nurseswill suddenly become JG workers, to their great financial discomfort."
I don't propose that the Government come along and offer work to people in industries that are paying people more than the FJG wage. I'm not looking to reduce the well-being of employees and workers. I'm looking to improve. it. So, I don't see how this scenario is an issue for me? Is it really one for you? And if so, why, since I've already said that such industries won't face Government competition.
And, as fr this:
"1. Aren't being done now, either in the private or public sector, and
2. Won't be missed when the economy improves and they are hired away from JG"
I don't agree with these criteria. Many things are done now by people who aren't being paid a living wage. I think we need to stop that, and that FJG jobs should be provided in sectors where the employers are exploiting employees with sub-standard employment. As for the second criterion, I agree that there may be some things that FJG people would do that won't be missed when the economy improves; but I hope there won't be very many of those things, because FJG jobs are supposed to be jobs that produce value, and so, if the program is successful, they will be missed when there is no one to fulfill them, and that is as it should be.
The issue here is what the market can do at a profit and what it can't. There are many areas of work that will produce great value where the kinds of profits business people want can't be made. When that's true, we shouldn't let private businessmen continue to operate in those areas by driving wages doen to levels of economic security. People have a right to a decent living. That right is more fundamental than the right to stay in business and to be rich. So in those areas of endeavor where it's not possible to make those kinds of profits and still pay decent wages, we should have FJG wages that guarantee a decent living, and if this means that valued services have to be provided by non-profits, cooperatives, or public agncies of one sort or another, then I'm for it.
Irrelevant to what? And why is a third too much?
Subsidies for the private sector, only lead to further corruption. I don't want any more sweetheart deals. I want business people to measure up by providing jobs that pay well here in the United States. If businesses can't stay in business on that basis, I'd rather have the work done by non-profits. It's time we stopped privileging businesses in this country and started trying to redress the inequality we've seen develop over the past 40 years.
It was not I who listed WPA jobs as examples of things that JG workers should do. They are (mostly) bad examples for today.
Public works programs do need to be in place ALWAYS. Not temporary, intermittent, cyclical, JG-style. Fixing woeful public infrastructure is a good way to raise aggregate demand, the lack of which is the root cause of "how we become…". But it is a permanent task, does and should pay more than the JG wage, and is not suitable for a high-turnover JG workforce.
If it is so easy to imagine these jobs that JG workers should do, then name some of them. I know a highly-trained unemployed network engineer. Should the government set up networks to employ him to compete with his former employers? If they do, and they can take customers from the private companies, will not the private companies have to lay off the workers that were serving those customers? Where is the net gain?
Making it non-profit only helps to the extent that the business was ever making profits. If the business would take losses by paying higher wages, then somebody must subsidize the same losses of the non-profit.
Businesses are not being malicious in failing to provide jobs that pay well here in the United States. If the demand were there for their products, they would be quite happy to employ workers to produce their products.
Making GM a non-profit wouldn't have saved them.
I'm not claiming that becoming non-profit would save any particular business. But there's no getting around the fact that profit making companies try to game the markets to drive up stock prices for the benefit of their stockholders and especially their managements. Non-profits just don't have that motivation. They have other problems, but palying Wall Street's games isn't one of them.
Also, you're bifurcating my comment illegitimately we're not looking at dichotomy where a company is losing money, or not losing money. The issue here is whether a large public company must inflate profits for various reasons, so that it can't be satisfied with a modest profit, or no profit, but also no loss of any substance either. In today's market companies cannot operate like that and survive. They have to have inflated profits, which forces them to drive down wages and relocate employment to other nations.
Further, I disagree with you about businesses being malicious. People managing big businesses are often malicious in how they view employees and command them. Anyone who's worked in a big company or had a family member who worked for a big company knows that this is true. Also, today it often it isn't inadequate demand for products that drives companies overseas or drives them to lower wages here. Rather, it's a desire to maximize profits over other business and community values. It's about making profits the only thing. And in the unremitting search for profits, the executives do project their own guilt onto other people and treat them maliciously.
While I agree that making GM a non-profit wouldn't have saved them; but a complete take-over by the Government certainly would have saved them and without exporting still more jobs to China,as they did after the Government invested in the company.
Joe, Obviously private employers will try to game any employment subsidy. Employers game everything: they’re heavily into buying politicians, cheating the taxman, paying sub-minimum wages, etc etc. But there are good arguments for involving the private sector, as follows.
1. JG / WPA employees will always tend to be the less skilled, and the private sector is better at employing the less skilled than the public sector.
2. Cramming all JG / WPA employees into a relatively small sector of the economy means running into the diminishing returns problem: the output of the last employee to be hired becomes negligible. Or in economics jargon, the marginal product of labour declines in any firm or sector as numbers employed rises.
3. Public sector employers are not averse to gaming the system. Senior public sector staff have targets to meet, and normally have an incentive to cut costs and maximise output, just like private sector employers. I believe public sector employers abused the CETA employment subsidy many years ago.
A job Guarantee program is necessary to rebuild our economic, and financial system. However, rebuilding our whole cultural and social base requires planning at a higher level as well. Congress has not done well at leading the way on social programs; we need to feed them some ideas.
Sponsorship of Arts, music, theater, painting, murals, sculpture, poetry would be needed as well
These are a vital part of any plan To rebuild a Society .
People would need public transit to get to these events.
The situation with wages might solve itself if food, housing, transportation, health care, education and cultural affairs had some heavy duty fiscal support (ok subsidy) from all levels of government. For example, if a mass transit system were available in all of our urban areas, the economic effect of having low cost transportation readily available that takes people where they need to be quickly and cheaply could easily pull millions of households off the edge of poverty. The same with well planned, efficient and esthetically pleasing housing-this alone constitutes over one third of most household budgets. A housing program could be structured to offer no cost or low cost domiciles to anyone who needed them, again substantially reducing the need for income.
If our cities were planned to create a cultural and esthetic sensations that excited people instead of the present dreary grunge and dirt we would move a lot quicker into a New Economy. The Ideas presented here are similar to the New Deal philosophy but this time the push would have to go further and deeper.
Concerns about corruption should be addressed. I think it is time that we give up on the sector biases that usually go something like “the public sector is always and forever inefficient, only private business can do this.” Or, “government funding corrupts.” The other side of this places the onerous on the private sector for having the monopoly on inefficiency, corruption, greed and evil. Odd is it not that in many situations the same folks move back and forth between public and private sectors? Did sanctification and grace descend as softly as the morning dew because the person changed hats? Governments are not necessarily always models of modern efficiency and dutifulness. But then neither are private business both large and small. William Black has noted that smaller banks, usually those located and operating close to the actual folks they are lending to are better at doing the job than large centralized banks who have no local touch and sense. The same is true of governments, grants, money aids, medical care subsidy programs; all work better when administered locally and are run by folks close to the street where the clientele are situated. However, in general I believe it is time to clear the air on the biases that center around the private sector policy management vs public sector policy and procedural management debate. One is not always and forever the house of evil and the other always and forever the enshrining of saintly behavior that is always doing good. Both have their place in our society and in looking over the larger scene and seeing beyond the local landscape we should stop bickering about who is better at running their house. The larger banks have proven incapable of showing any integrity, so they should be dissolved. That is why the easy loans the Federal Reserve has given out are so evil and insidious; they feed the vampire squids so the tentacles can travel out into every corner of the land. The same is true of the realms of government; a major restructuring and overhaul at all levels is needed. We as a society, – in the larger sense I'm speaking of- need to build a new house somewhere nearby and move in.and vacate the old one to let it fall to the ground.
That's why I'm here.
test – having problems replying
We're getting far afield here.
I don't think you mean to say that JG should create companies or non-profits to compete with evil profiteers and drive them from existence.
What jobs would the JG workers do?
Anything the private sector doesn't find profitable at a price most people can afford to pay; but people nevertheless find valuable is what FJG people might do. Why do you think there's not much of that to do? Where's your imagination?
And your point is? that JG/WPA and federal Employees will be more venal than banksters, fraudsters, Wall Bond and hedge fund traders. Please, don't make me laugh!
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Where's yours? You are the one claiming there is lots to do, but you won't tell what it is ???? What are you going to tell them when they show up for a JG job: "Go out and do anything the private sector doesn't find profitable at a price most people can afford to pay"???
I think I may have found an answer, at least a partial answer.
1. As mentioned above, subsidize companies to train entry-level workers rather than to hire experienced, skilled workers from abroad when those skills are in short supply domestically.
2. Training in job-hunting skills, resume writing, etc. Maybe one day a week on this for everyone who wants it.
3. Day / temp labor, leveraging existing private sector companies like Kelly Services.
4. Day volunteer work, fulfilling requests from charities for temporary volunteers. Things like sorting donations at the local food bank, or helping on a Habitat for Humanity project.
#1 is fairly limited, kind of a college grad thing, but maybe could be extended to pay tuition for people to go to trade schools. #3 and #4 would be the bulk of the work activity, I think, and it meets my two criteria: not being done now, and won't be missed. Yes, it's being done now on a smaller scale, but making it a JG requirement would increase the population of participants, without having to make a big infrastructure investment. And it's only to be done to the extent that the demand is there. If the local Kelly office asks for 10 people, don't send 100.
And it won't be missed when the JG workers get private sector jobs. This is the beauty of the charity work, as the economy improves and the workers get employed, there is less demand for charity volunteers. It is exactly BECAUSE they are no longer available that they are no longer needed.
Can we use 2 million people nationwide on these things? It's a tall order. That would be 60,000 or so in metro Phoenix. Seems like a lot. Maybe two days a week on resume training and answering want ads, instead of one. But it's worth a try.
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