Policy Summary 

A Jobs Guarantee can take several forms. In its most basic form, the public sector would grow when private-sector employment declines by providing publicly funded employment opportunities for the unemployed. The policy would target all individuals aged 18 and older in the United States. The policy would include a set minimum level of compensation and require the provision of fringe benefits to participants.  

Case for Equity

The nation is undergoing an economic transformation that is changing the nature of work, eliminating occupations, and disrupting entire communities. This transition has been underway for decades beginning with the Rust Belt and major city deindustrialization, followed by an off-shoring wave that left many communities devastated. The recent acceleration in automation is compounding this reality and the effects of these shifts have been felt acutely by rural Americans of every racial category, but it has been felt disproportionately by people of color in every geographic space.  

Historically, people of color experience the impacts of labor market shifts more acutely. The Black unemployment rate consistently stands at 2 times the white unemployment rate in good and bad economic times, and Latino employment typically nose dives faster than any other community during recessions. The US has a long way to go to fulfill the American promise of the availability of opportunities to build a stable life for one’s family through productive and rewarding work. 

  

Issues to Resolve & Lingering Questions

  • Flawed implementation could potentially create problems when it’s time to retrench the public sector jobs and create major disruptions for the private sector labor market, such as the availability of employees availability.
  • Would the touted increases to overall wages materialize without negative impacts to private employers?
  • Although potentially positive, there is little certainty about the true cost benefits of this policy, which makes the issue of program costs more problematic.

Return on Investment

Return on Investment for this policy is rated as being MEDIUM. Available evidence suggests potential significant returns in both individual outcomes and societal benefits.

 

We have limited evidence of the potential cost-benefits of a jobs guarantee program. In a 2018 report, the Levy Institute ran simulations on the potential program’s impact, and report that the program could employ upwards of 15.4 million workers with substantial impacts on poverty alleviation via increased wages and improved levels of health in the population served via employment benefits (Wray et al 2018). The estimated wider impact of the program is to be a $543 billion annual increase in the national gross domestic product (the total of all goods and services produced in the country – GDP). They also project an additional 4.3 million private-sector jobs created in the overall economy. In relation to the program’s costs, they estimate that annual costs including debt service to be between $378 and $415 billion, much less in comparison to the combined effects of the direct GDP impacts and the ripple effects on the overall economy (ibid).  Analysis from the Center on Budget and Policy Priorities produces similarly far-reaching estimates (CBPP 2018).   

For actual evidence of impact, we must turn to studies from several locally administered programs. An evaluation of a youth-focused job guarantee program indicates that for each participant, communities receive a net benefit of approximately $600 over and above costs per participant (Johnson and Lopez 1997). Evidence from a job guarantee program in operation in seven states (AFDC Homemaker-Home Health Aide Demonstrations) produced net social benefits that ranged from $2,200 to $13,000 per participant (ibid). The program impacts for individual participants were shown to range from $1,200 to nearly $2,600 in annual earnings (in 1984 dollars) post-program participation (2.5 greater than a comparison non-participant group) (Johnson and Lopez 1997).

Research Base

The research base is rated as being MEDIUM due to the relatively few high-quality studies specifically examining guaranteed jobs programs, and the conflicting evidence found in related literature.

Despite the scale and scope of the most well-known jobs guarantee program (Works Progress Administration), we have very little in the way of concrete research-informed knowledge about the impacts of the program economically and on the lives of participants. The bulk of the literature on jobs guarantees comes from evaluations of individual programs implemented by local entities and individual state agencies. However, this research is rather limited given that it covers only a handful of programs. Among these studies, there are only a few high-quality reports that provide insights into the overall value and potential for job guarantees. A few noteworthy, randomized studies show the efficacy of jobs guarantee models for delivering positive impacts in the realm of employment, earnings, and decreased criminal justice involvement (see Jastrzab 1996, Miller et al 2008, Bell et al 1987).  

Related literature on subsidized employment deserves scrutiny in that it features the provision of public funds as a significant source of the supplementary funding stream for participant wages. This literature on subsidized employment has much greater depth. This scholarship suggests that there are some promising models that offer support for a public jobs program; however, the research is inconsistent in its findings with respect to who benefits from these programs, the magnitude of impact (whether short or long term), and under what program conditions (Heinrich 2016). 

State & Local Ease of Implementation

This policy is rated as having a HARD level of implementation difficulty. From a state perspective, it would require new funding systems and/or the realignment and reform of existing systems.  Additionally, there are high political barriers associated with enacting new safety net programs. Moreover, while the policy can be erected at the local level, it requires high coordination with state and regional entities.

Exploratory Steps for Local Leaders

In the wake of the 2008 recession, states implemented subsidized employment programs with TANF emergency funding that reflected many of the elements of a public jobs program. However, it is likely beyond the capacity of an individual state to implement a full guaranteed jobs initiative. Nonetheless, since 1996, states and localities have been given considerable flexibility within the existing workforce development, safety net, and unemployment system structures and their constituent programs. Combined with innovations in tax incentives and other areas (like the HireNYC program and the Austin TX equity-focused tax incentives model), communities can implement robust jobs programs that feature some elements of a guaranteed jobs initiative.   

  • Review federal programs to identify funding resources that might support the creation of a jobs program. These include the flexibility in TANF, Workforce Innovation, and Opportunities Act funding, HUD program funds, Child Care Development Block Grants, AmeriCorps, and others (Johnson and Savner 1999). The Urban Institute provides a great resource for exploring a range of funding options.  
  • Inventory state and local workforce development structure to identify potential programmatic synergies and opportunities. A great example is the 2012 inventory of Workforce Development conducted by the state of North Carolina. 
  • Convene workforce system leaders and stakeholders to identify deficits in the existing system and determine whether a public jobs program can be a potential solution to those challenges, and engage with private sector employers in key sectors to identify potential occupational categories that dovetail well with the development of a potential jobs program.

Johnson, C. and Lopez, A. 1997. Shattering the Myth of Failure: Promising Findings from Ten Public Job Creation Initiatives. Center on Budget and Policy Priorities  

Johnson, C., ,Rynell, A. Young, M. 2010. Publicly Funded Jobs: An Essential Strategy for Reducing Poverty and Economic Distress Throughout the Business Cycle. Urban Institute  

Jastrzab, J., Blomquist, J., Masker, J., and Orr, L. (1996).Youth Corps: Promising Strategies for Young People and Their Communities. Prepared for the Corporation for National Service. Cambridge, MA: AbtAssociates Inc.  

Wray, R., Dantas, F.  Fullwiler, S.. Tcherneva, P. and Stephanie A. Kelton. 2018. Public Service Employment: A Path to Full Employment. Levy Institute.   

Miller, C.; Huston, A.; Duncan, G.; McLoyd, V. Weisner T. 2008. New Hope for the Working Poor Effects After Eight Years for Families and Children. MRDC  

Bell, S.; Orr, L.; Burstein, N. 1987. Evaluation of the AFDC Homemaker-Home Health Aide Demonstrations: Overview of Evaluation Results; Abt Associates.; United States. Health Care Financing Administration.Cambridge, Mass.: Abt Associates  

Impacts

Paul, M. Darity, W., and Hamilton, D. 2014. The Federal Job Guarantee – A Policy to Achieve Permanent Full Employment. Center for Budget and Policy Priorities.  

Nunn, R. Omalley, J., Shambaugh J. 2018. Labor Market Considerations for a National Job Guarantee. Brooking Institution  

Design & Structure

Tcherneva , P. 2018. The Job Guarantee:  Design, Jobs, and Implementation Levy Economics Institute of Bard College. Working Paper No. 902 

Johnson, C.; Savner, S. 1999. Federal Funding Sources for Public Job Creation Initiative. Center on Budget and Policy Priorities Center for Law and Social Policy. Center for Budget and Policy Priorities.  

Rosenblum, S. 1999. “New Directions: Publicly Funded Jobs: A Workforce Development Strategy for Cities,” National League of Cities. Washington, D.C 

Heinrich, C. 2016. Workforce Development in the United States: Changing Public and Private Roles and Program Effectiveness. Vanderbilt University  

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