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A Path to Ending Poverty by Way of Ending Unemployment: a Federal Job Guarantee Mark Paul, William Darity Jr., Darrick Hamilton, and Khaing Zaw

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A Path to Ending Poverty by Way of Ending Unemployment: a Federal Job Guarantee Mark Paul, William Darity Jr., Darrick Hamilton, and Khaing Zaw a federal Job guarantee A Path to Ending Poverty by Way of Ending Unemployment: A Federal Job Guarantee marK paul, william darity Jr., darricK hamilton, and Khaing Zaw Poverty in the United States, one of the world’s most wealthy and prosperous nations, is persistently high. Despite a complex array of social insurance programs in place, 43.1 million people remain in poverty. Be- cause unemployment is a strong predictor of poverty, we propose a permanent federal job guarantee for all Americans. The program would provide full- time employment for any American over eighteen, offering at least nonpoverty wages plus benefits. Such a program will constitute a direct route to producing full employ- ment by eradicating involuntary unemployment. It also will substantially increase worker bargaining power by removing the employer threat of unemployment. To make the case that the federal job guarantee is viable, this paper includes responses to five common criticisms lodged against programs of this type. Keywords: job guarantee, employment, poverty, human rights, second Bill of Rights Poverty in the United States is persistently high poverty, some 13.5 percent of the population, even though the nation is one of the world’s conditions demand that the country take fresh wealthiest and most prosperous. Because an action (Proctor, Semega, and Kollar 2016). 1 estimated 43.1 million Americans still live in Tools to alleviate the unnecessary suffering ex- Mark Paul is a postdoctoral associate at the Samuel DuBois Cook Center on Social Equity at Duke University. William Darity Jr. is Samuel DuBois Cook Professor of Public Policy, African and African American Studies, and Economics, and director of the Samuel DuBois Cook Center on Social Equity at Duke University. Darrick Ham- ilton is associate professor of economics and urban policy at the Milano School of International Affairs, Manage- ment and Urban Policy and Department of Economics, New School for Social Research, and director of the doctoral program in public and urban policy at the New School. Khaing Zaw is a research associate at the Samuel DuBois Cook Center on Social Equity at Duke University. © 2018 Russell Sage Foundation. Paul, Mark, William Darity Jr., Darrick Hamilton, and Khaing Zaw. 2018. “A Path to Ending Poverty by Way of Ending Unemployment: A Federal Job Guarantee.” RSF: The Russell Sage Foundation Journal of the Social Sciences 4(3): 44–63. DOI: 10.7758/RSF.2018.4.3.03. Direct correspondence to: Mark Paul at [email protected], Samuel DuBois Cook Center on Social Equity, Duke University, 2024 West Main St., Campus Box 104407, Durham, NC 27705; William Darity Jr. at [email protected], Samuel DuBois Cook Center on Social Equity, Duke University, 2024 West Main St., Campus Box 104407, Durham, NC 27705; Darrick Hamilton at [email protected], The Milano School of International Affairs, Management and Urban Policy, The New School, 72 Fifth Ave., Room 707, New York, NY 10011; and Khaing Zaw at khai.zaw @duke.edu, Samuel DuBois Cook Center on Social Equity, Duke University, 2024 West Main St., Campus Box 104407, Durham, NC 27705. Open Access Policy: RSF: The Russell Sage Foundation Journal of the Social Sciences is an open access journal. This article is published under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported Li- cense. 1. The aggregation of the national poverty rate is too general to describe the scope of poverty for certain groups. For instance, the black poverty rate of 24.1 percent is more than twice the white poverty rate of 11.6 percent. This content downloaded from 152.3.43.48 on Mon, 21 Oct 2019 16:20:30 UTC All use subject to https://about.jstor.org/terms a federal Job guarantee 45 ist, but they need to be activated (DeNavas- Walt that provide benefits to people without earn- and Proctor 2014). The United States does have ings, contributing substantially to the increase a complicated array of social insurance pro- in “deep poverty.”2 grams in place that reach some of those in During the Great Recession, one of the larg- need: among them unemployment insurance, est holes in the current safety net became the Supplemental Nutrition Assistance Pro- highly visible—the lack of support for the job- gram (SNAP), Temporary Assistance for Needy less. At the height of the crisis, conservative Families (TANF), and disability benefits—both measures of the level of unemployment indi- Supplementary Security Income and Social Se- cated that more than fifteen million Americans curity Disability Income. (10 percent of the labor force) were out of work Fighting poverty as a national priority is not (U.S. Bureau of Labor Statistics 2017).3 They a recent development. Fifty-two years ago, Pres- were unable to make a contribution to tradi- ident Lyndon B. Johnson declared his War on tional measures of economic productivity and Poverty, proclaiming that “many Americans live economic growth, and they were struggling on the outskirts of hope—some because of desperately to provide for themselves and their their poverty, and some because of their color, families. Broader measures of unemployment, and all too many because of both. Our task is such as U6, that better capture hardship during to help replace their despair with opportunity” economic downturns indicate that 17.1 percent (1964). On the fiftieth anniversary of his decla- of workers were unemployed or working part ration, the Council of Economic Advisors is- time, despite wanting full- time employment.4 sued a progress report. The conclusion was that Figure 1 demonstrates just how large the gap far too many Americans still experience pov- became between the number of those seeking erty, in part because of “unemployment . jobs and the number of jobs offered during the inequality, wage stagnation, and a declining Great Recession. No amount of individual effort minimum wage” (2014). — hard work nor “pull yourself up by your own The current social insurance regime has cut bootstraps” drive—could overcome the dra- poverty rates nearly in half—reducing them matic shortage of jobs available during the cy- from an estimated 27.3 percent for persons clical decline. without government assistance to 15.3 percent Moreover, unemployment is one of the after the programs mentioned are taken into strongest predictors of poverty, households account (Greenstein 2015). These programs cer- whose usual breadwinners are out of work be- tainly have reduced poverty, but the social in- ing three times more likely to be poor than surance regime has shifted to a “work- based working households (Achiron 2009, 13). But safety net,” providing the majority of assistance working households are not immune from the to the working poor—a group that would not plague of poverty; a job in and of itself is not a exist under our proposed program in the first sufficient condition to escape poverty. Given place. The changes in social insurance pro- that at least 25 percent of workers earn wages grams implemented under the Personal Re- below the poverty line (Mishel et al. 2012), and sponsibility and Work Opportunity Reconcili- 44 percent of homeless individuals report hav- ation Act (the 1996 welfare reform) resulted in ing taken on paid employment in the past a significant decline in government programs month (Burt et al. 1999), nonpoverty wages 2. Deep poverty is defined as an individual or household with income that is below half of the poverty line (for further discussion on changes in extreme poverty following the 1996 welfare reform, see Shaefer and Edin 2013). 3. U3 is the International Labour Organization official unemployment rate that includes individuals that are unemployed and have actively looked for work within the past four weeks. 4. U6 is a broader unemployment, or underemployment rate, which, in addition to U3, includes “discouraged workers,” or those who have stopped looking for work due to current economic conditions; other marginally attached workers who are willing and able to work but have not actively sought employment in the past four weeks; and part-time workers who seek but cannot attain full-time employment. rsf: the russell sage foundation journal of the social sciences This content downloaded from 152.3.43.48 on Mon, 21 Oct 2019 16:20:30 UTC All use subject to https://about.jstor.org/terms 46 anti-poverty policy initiatives for the united states Figure 1. Job Openings and Unemployment Rate 18.0 16.0 14.0 12.0 10.0 8.0 Percent 6.0 4.0 2.0 0.0 0 1 3 200 200 2002 200 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Year Total unemployed, plus all marginally attached workers plus total employed part time for economic reasons, Percent, Monthly, Seasonally Adjusted Civilian unemployment rate Job openings: total nonfarm Source: U.S. Bureau of Labor Statistics 2017. need to be an essential component of reducing that there are many months when the Bureau poverty. of Labor Statistics reports that blacks with Furthermore, the costs associated with un- some college education have a higher unem- employment go far beyond poverty. The nature ployment rate than whites who never finished of the harms from unemployment or underem- high school. Even when black students com- ployment are well documented. In addition to plete degrees in a statistics, technology, engi- inflicting lasting damage on an individual’s la- neering, and mathematics (STEM) field, osten- bor market prospects, unemployment is asso- sibly fields in high demand by the labor market, ciated with increased rates of physical and they still experience markedly higher rates of mental illness, alcohol and drug abuse, child unemployment. They also are more likely to and spouse abuse, failed relationships, suicide end up in jobs that do not require a STEM de- and attempted suicide, and a host of other per- gree (Jones and Schmitt 2014).
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