In this policy note, we examine the effects of implementing a nationwide job creation program. In recent months, support for a national job guarantee has been growing rapidly, with a number of progressive organizations issuing proposals. The Levy Economics Institute has spent more than a quarter of a century researching the topic and putting forth numerous proposals. The Institute will soon be issuing a major report that will provide detailed estimates of the economic effects of a nationwide program, including impacts on the federal budget, inflation, GDP, and private sector employment.
We begin this note with a brief overview of the goals and structure of the proposal that has been developed at the Levy Economics Institute, building on the work of the Institute’s scholars. The program we envision—which we call a Public Service Employment (PSE) program—would create millions of new jobs at a living wage in an effort to guarantee employment to anyone ready and willing to work. We then discuss current labor market conditions and assess how a job guarantee program modeled on our PSE approach would affect employment and poverty.
We see the PSE program as part of a restructuring of the economy that represents a radical departure from the neoliberalism that has dominated national policy for the past four decades. Neoliberal doctrine has resulted in stagnant wages, chronically high unemployment, declining labor force participation among prime-age male workers, rising inequality that already exceeds levels achieved in America’s notorious “Gilded Age,” and an explosion of household debt. Other key initiatives in this restructuring include calls for a national infrastructure investment plan, the movement to eliminate student debt (see Fullwiler et al. 2018), proposals to create “Medicare for All,”
and the push to raise minimum wages to $15 per hour.
The PSE program would play a complementary role by offering paid work at a living wage of $15 per hour with a basic package of benefits that would include healthcare provided through an expansion of Medicare. It would ensure full employment in the sense that the program would supply a job to anyone ready and willing to work. Jobs would be provided in every community—taking workers where they are, delivering an economic boost to every community in the country.