Sen. Bernie Sanders (I-Vt.) will announce a plan for the federal government to guarantee a job paying $15 an hour and health-care benefits to every American worker “who wants or needs one,” embracing the kind of large-scale government works project that Democrats have shied away from in recent decades.
A representative from Sanders's office said they had not yet done a cost estimate for the plan or decided how it would be funded, saying they were still crafting the proposal.
Sanders joins two other rumored 2020 Democratic presidential contenders who have expressed support for the idea of a jobs guarantee. The push reflects a leftward move in the party's economic policy, away from President Barack Obama's use of public-private partnerships or government incentives to reshape private markets and toward an unambiguous embrace of direct government intervention.
Job guarantee advocates say their plan would drive up wages by significantly increasing competition for workers, ensuring that corporations have to offer more generous salaries and benefits if they want to keep their employees from working for the government. Supporters say it also would reduce racial inequality, because black workers face unemployment at about twice the rates of white workers, as well as gender inequality, because many iterations of the plan call for the expansion of federal child-care work.
“The goal is to eliminate working poverty and involuntary unemployment altogether,” said Darrick Hamilton, an economist at the New School who has advocated for a jobs guarantee program along with Stony Brook University's Stephanie Kelton and a group of left-leaning economists at the Levy Economics Institute at Bard College. “This is an opportunity for something transformative, beyond the tinkering we've been doing for the last 40 years, where all the productivity gains have gone to the elite of society.”
Others, including some Democrats, are not convinced. The idea is also dead on arrival with Republicans in control of Congress, and conservatives have trashed the idea of a jobs guarantee as impractical, impossibly expensive and dangerous to the private sector.
“It completely undercuts a lot of industries and companies,” said Brian Riedl, of the conservative-leaning Manhattan Institute, a think tank. “There will be pressure to introduce a higher wage or certain benefits that the private sector doesn't offer.”
Ernie Tedeschi, an economist who served in Obama's Treasury Department, said there would be large logistical and practical challenges in ensuring millions of new federal jobs serve productive ends.
“It would be extremely expensive, and I wonder if this is the best, most targeted use of the amount of money it would cost,” he said.
Critics point to potential unintended consequences in the plan. Although it would probably boost wages for workers, those higher wages could bump up costs for private businesses, leading some to hire fewer workers or take other steps — such as reducing benefits or looking to replace workers with machines.
These effects would be more pronounced if the plan were to pull away workers who hold private-sector jobs, rather than pulling in workers without jobs who wanted them. The unemployment rate currently sits at 4.1 percent, a historically low figure. But that figure does not include people who've given up looking for work, and the labor force participation rate — a broader measure of those not working — suggests there may be people not counted among the unemployed who would join the labor force.
The new government spending could also lead to inflation, decreasing the real value of workers' wages.
Obama's economic initiatives, generally, focused on using the government to influence private markets and industries in pursuit of policy goals. His economic stimulus plan — in which he and Democrats tried to pull the United States out of a deep recession — channeled money through private enterprises to boost hiring and investment, and offered tax cuts and rebates in the hope of getting people to spend more.
But in a new political climate, ideas such as a jobs guarantee plan is gaining traction among prominent Democrats. Sen. Kirsten Gillibrand (N.Y.) backed the idea on Twitter earlier this month. As first reported by Vox, Sen. Cory Booker (N.J.) last week also announced his intention to introduce a separate bill that would create a pilot program for a job guarantee in 15 rural and urban areas.
Under the early draft of Sanders's job guarantee, local, state and American Indian tribe governments in every section of the country would send proposals for public works projects for their areas to 12 regional offices that encompass the country. These 12 regional offices would act as a clearinghouse for these projects, tasked with sending recommended projects to a new national office within the Labor Department office for final approval.
Once approved, the projects would hire workers at a minimum salary of $15 an hour with paid family and medical leave, and offer the same retirement, health, and sick and annual leave benefits as other federal employees.
About 2,500 job training center and employment offices already exist around the country, and the plan imagines tasking them with connecting workers to these local projects. When the programs are up and running, anyone can wander into a job center and — at least, in theory — find either job training or a job on one of these projects.
The plan's authors envision millions of Americans being hired under the proposal, with the number going up during economic recessions in the private sector and down during economic booms. They also say it would significantly increase the government's involvement in the American economy to a level not seen since World War II, if ever in the country's history.
Beyond how to pay for the plan, many other aspects of the jobs guarantee have not been specified.
It's not clear what would happen to a worker who violated the terms of employment. The plan suggests creating a Division of Progress Investigation to “take disciplinary action if needed,” leaving authority to the head of the Labor Department. Aides to Sanders stress that the policy details remain in their initial stages.
Proponents trace the idea to the New Deal era, when President Franklin D. Roosevelt pitched a “Second Bill of Rights” to Congress in 1944. First on the list: the “right to a useful and remunerative job.”
“This is not a radical idea,” Hamilton said. “It was well-couched in the Democratic platform that existed during its heyday. I'm glad Democrats are trending back to their roots.”