Policies to ensure everyone has a job sound appealing. But they may not help Democrats at the ballot box, and aren't economically realistic.
The next big idea from the Democrats is a universal guarantee of a job to everyone who wants one.
Sens. Cory Booker, Kirsten Gillibrand and Bernie Sanders, all potential candidates for president in 2020, have endorsed some version of the idea.
Booker would start with a pilot program in 15 urban and rural areas, using federal funds to provide employment at $15 an hour.
Gillibrand went considerably further. She told The Nation magazine, “Guaranteed jobs programs, creating floors for wages and benefits and expanding the right to collectively bargain are exactly the type of roles that government must take to shift power back to workers and our communities.”
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With national unemployment at 3.9 percent in April, the lowest since the end of the long 1990s boom, this might seem like an odd time to float such a proposal.
But beyond idealism and the rising power of the party’s left wing, Democrats seem eager to put forward ideas to win back some of the (white) working class that deserted them in the 2016 presidential election. Democrats’ inattention to economic hardship in the heartland and embrace of globalism and “elites” helped cause this shift.
The trouble is that studies since the election, such as one by Diana Mutz of the University of Pennsylvania, challenge the economic argument. The real reason for the squeaker Electoral College victory of Donald Trump, they concluded, was rising white anxiety over “lost status” and anxiety over an increasingly demographically diverse nation.
If this is true, Democrats can float all the cures for the economic woes chronicled by the book “Hillbilly Elegy” they wish, and they won’t change the result at the ballot box. This is because Democrats stand for minorities and immigration, and are on the “wrong side” of all the culture-war issues that animate Trump voters.
Put another way, in a counterfactual history of the Great Recession, President Obama avoids health care. He uses his brief Democratic majority in Congress to forgive millions of underwater mortgages and pass an even more robust stimulus to supercharge employment. His Justice Department sends the banksters to prison and claws back their compensation.
With all that, the approximately 80,000 votes in three states that swung the 2016 election (with help from the Kremlin) might still have voted Trump.
Still, the jobs guarantee is worth examining, and not only because you’ll be hearing more about it as the next presidential election nears. In addition to today’s economic discontents (rising inequality, stagnant wages for most), increasing use of advanced automation and artificial intelligence puts millions of jobs at risk, including well-paid, highly skilled positions such as physicians.
Over the past three decades, so-called jobless recoveries have become the norm. Unemployment has taken longer to fall. Mergers, highly consolidated industries, offshoring, outsourcing and technology leaps have all contributed to the loss middle-wage and “blue-collar gentry” jobs that defined America from the 1950s into the 1970s.
People without a college education have been especially put on a downward mobility track.
But something else has happened. The many checks, balances and buffers that used to create a more equitable economy slipped off.
For example, at the high point of the middle class, unions acted as a counterbalance against runaway corporate greed. Federal regulation kept banking focused on assembling capital for productive, job-creating enterprises. Also, most business leaders would have considered today’s romp-and-stomp capitalism unseemly.
As a result, the benefits of wealth creation were widely distributed.
Since the 1980s, extracting wealth — in many cases demolishing companies and industries and redistributing it upward — was normalized. These wealth extractors became fabulously rich, while those at the middle and bottom lost out.
Economist Mariana Mazzucato examines this problem in her book, “The Value of Everything.” Her case studies show how, especially in banking, tech and Big Pharma, riches are found in moving money around, looting companies and gaining financial advantages by manipulating public policy.
This is a real crisis of capitalism, and hence our system. To paraphrase Churchill, capitalism is the worst form of economic organization, except for all the others.
For government to step in with a promise of universal jobs presents many practical challenges. Among them are cost, a huge bureaucracy, red-state sabotaging (as with Obamacare) and interfering with the natural decision-making of job seekers, which beats central planners. The need for manual labor is much less now than when New Deal programs employed millions.
Rather than a jobs guarantee, Democrats would be better served by making federal investments in advanced infrastructure such as high-speed rail, rail transit, clean energy and modernizing the electrical grid. These would create large numbers of construction and operating jobs.
That’s a start. And based on government infrastructure projects from the past, it would more than repay its cost.
Another important step would be better funding for public education, K-12 and community colleges, to better prepare those most at risk of being left out of job opportunities. Universal health care would be transformative.
Beyond this, the action is in trying to restore the old order — progressive taxation, antitrust enforcement, unionization, financial regulation — updated for the digital and global age. Find the way to do this, and steady jobs, good pay and the right to rise will follow.
Unfortunately, the nation is going in the opposite direction. The tepid (but better than nothing) Dodd-Frank bank law faces gutting. The rich and corporations received a giant tax cut that will cost at least $1.5 trillion. The Supreme Court, with a conservative appointee to the vacant seat that was denied Obama to fill, just prohibited class-action suits by workers.
All this and more was enabled by big conservative money, sure. But also by struggling working-class whites who vote Republican and are doing so in greater numbers.
In the Jim Crow South, a few dreamers wanted to see poor whites and poor blacks join together. After all, their struggles were similar, both kept down by the gentry. It never happened. Poor whites preferred having poor blacks one rung lower. Identity trumped (forgive me) economic interest.
Much has changed since then. But tribalism and fear mean a guaranteed job won’t change this primal calculus across most of the country.
Liberals and the left will have to win many elections to change this. If they can even unite among themselves.