The Case for a Federal Jobs Guarantee

Employment numbers may look solid now, but economists, physicists and industrial engineers all say that automation will, in the not-so-distant future, drive higher unemployment. The Columbus Dispatch recently calculated that in Ohio, out of total state employment of about 5.5 million workers, 2.5 million jobs are at risk of automation.

How do we prepare for such disruption and the future of work? We might revisit an idea from the 1970s: a federal guarantee of employment. In recent weeks, three Democratic senators (and likely presidential contenders) — Kirsten Gillibrand of New York, Cory Booker of New Jersey and Bernie Sanders of Vermont — have either expressed their approval of the idea or unveiled initial ideas about how an updated version could work.

They are building on the legacy of the Humphrey-Hawkins Act, introduced in the 1970s by Senator Hubert Humphrey, Democrat of Minnesota, and Representative Augustus Hawkins, Democrat of California. In addition to the guarantee of employment, their initial bill allowed citizens to sue the government if they could not find a job.

Resurrecting Humphrey-Hawkins can help pre-empt a technology crisis and even future labor dislocation from globalization. In the original Humphrey-Hawkins bill — not the watered-down version that ultimately passed in 1978 — the president would submit an annual plan to Congress to achieve full employment, and local committees would coordinate job needs in their communities. The bill would have spurred private-sector job creation and a New Deal-style federal job creation program. Private employment would limit government investment, while federally mandated wage and price controls would fight inflation.

The final bill fell far short of this. Unions stripped out the wage and price controls in exchange for their support and put a priority on negotiating better contracts for their members over the fate of the nation’s poor. The Carter administration fretted about the potential impact on inflation from a bill without those controls. President Jimmy Carter never truly supported it, and the bill that passed committed the nation to ending inflation more than to full employment. Since then, the idea of full employment has largely disappeared from the American political system.

The arguments against Humphrey-Hawkins in 1978 are largely irrelevant today. After decades of low inflation, wage and price controls are unlikely to be problems. Mr. Booker’s pilot plan to test these ideas in 15 areas of the country builds on the Great Society belief in community control over federal resources.

The potential is great for helping revive depressed communities. West Virginia could clean up its streams and roadsides while building better housing. Flint, Mich., could construct new water systems and provide stability for private business to support a newly robust community. New York could construct low-cost housing to solve its homelessness crisis.

What must exist in any job-guarantee program is an enforcement mechanism. The initial version of Humphrey-Hawkins allowing workers to sue for a job reminds us of the need for a strong enforcement mechanism. Without a legal requirement to provide work, lawmakers will find political excuses to not implement the program, and it will not serve as a useful solution to automation, poverty and social instability.

True full employment would require an expansive view of worthy labor that moves us beyond nostalgic images of white men employed in steel mills and coal mines. This can range from the building of badly needed infrastructure to giving children music lessons. It can also underwrite our elder care and child care crises. Moreover, while an expanded public sector would be necessary to achieve full employment, the government can provide a variety of incentives to the private sector to increase employment.

Ideally, a permanent Works Progress Administration, with the government directly employing tens of millions of unemployed workers, would not be required. For the last several decades, a corporate culture of quarterly earnings reports has emphasized short-term profit and executive bonuses based on cost cutting. That approach came at the cost of labor. With real competition for labor from the government, corporations would need to invest in long-term planning and job creation and training programs to keep workers.

And if the most drastic claims of automation’s impact on employment come true, our society will have developed a plan to ensure economic and social stability through robust public employment, one that can be funded through taxes on the wealthy benefiting from automation and from those directly employed by the state. For those who cannot work, a limited version of universal basic income-style direct cash transfers can substitute.

Job creation fits American cultural norms around work more effectively than the idea of universal basic income. It avoids politically unpopular forms of welfare while significantly bolstering the welfare state for those who need it. Encouraging private sector job creation would limit the impact on the deficit while adding tax money to the nation’s coffers.

A federally guaranteed job is not the full answer to economic inequality or an automated world. It needs to be paired with a higher minimum wage and labor law reforms that allow workers to unionize and win collective bargaining agreements. Work under the federal job guarantee starting at $15 an hour would help produce those outcomes.

The implementation of a federal employment guarantee would consist of difficult compromises, power struggles and policy corrections. But it also provides the most politically realistic answer to our future employment crisis. It deserves serious consideration.