When I was 11, my family immigrated from Vietnam to Houston, Texas, in search of a better life. We dreamed of its economic opportunities, its reputation for being a melting pot, its promises that if you worked hard, get an education, then you can achieve the American Dream. More than a decade later, this dream is further away than ever. When I look at the current state of America, it’s easy to see why my optimism had vanished.
The coronavirus, rather than bringing us together in fighting against a common cause, has only exposed the racial and class tensions hidden behind the American promise. While the pandemic swept away hundreds of thousands of lives and millions of jobs, it was the working class who felt its wrath. I’m talking about those without savings, without the ability to work from home, and without access to affordable healthcare who suffered tremendously. As stocks continued to soar, so did unemployment rates. And while less than half of the 23 million jobs lost in March and April have been recovered, some of these losses are becoming permanent–a frightful indicator of the future to come.
That future looks especially grim for 18–35 years old. This generation–my generation–has grown up in an era where the benefits of an education no longer hold the same magnitude as it did in the 70s and 80s. Sure, technology and globalization has created greater demand and competition for higher-skilled jobs, but it’s still hard to ignore the fact that the inflation-adjusted minimum wage has fallen by a third over the past 50 years. In addition, while 65 percent of high school graduates working in the private sector had health benefits in 1980, only 29 percent did in 2009. Combined with the fallout from the pandemic, where job postings for higher-wage occupations remain 27% below 2019 levels, it isn’t hard to imagine why us millennials are so pessimistic. It’s not just because we have been quarantined at home with our Aunt Sue, but because the promises of a college education have simply fallen short.
Don’t get me wrong, I’m not saying that success is ever easy or that a university degree is the magical genie in a bottle. I’m merely pointing out the hypocrisy that we blame the “skills gap” for high unemployment and income inequality, yet we favor policies that undercut workers’ bargaining power while allowing corporations to benefit exorbitantly. For an example, look no further than the meteoric rise in the net worth of America’s largest CEOs. While 40 million Americans filed for unemployment, these billionaires gained a collected $637 billion during the pandemic. To put this number in context, that’s the equivalent of sending two full rounds of stimulus checks to every single American.
So why has Congress delayed much-needed fiscal aid to struggling workers? The short answer is, they’re out of touch with what voters need. Those in power are just fighting to position themselves for the next election, motivated more by a desire to win against their opponents and less by a sense of duty to their own constituents. This trend–partly a result of the media and politicization that makes it harder to compromise on any issues–has distorted both the role and impact of public policy. The results? A fiscal impasse and an overreliance on monetary policy to pump trillions into the markets and the pockets of big corporations, even when the economy is slowly but surely teetering toward a recession.
Here, allow me to suggest a solution: a federal job guarantee program that will provide full-time jobs and basic benefits to all who are ready and willing to work. This proposal has a number of advantages. First, the job guarantee is a good political compromise, providing a strong social safety net favored by the left while dismissing fears from the right that high unemployment benefits will disincentivize work. Second, the federally enacted program can establish a higher minimum wage floor (let’s say $15) that will force wages up for all workers in the economy as well. Third, since unemployment breeds unemployability, the job guarantee can combat this spiral by providing workers with the training and opportunity to keep using their skills while they look for new jobs. Lastly, the program can directly target policy areas that have long been neglected, creating jobs to improve our public infrastructures and environmental conservation efforts — the equivalent of killing two birds with one stone.
In making the case for an American job guarantee, I anticipate two potential criticisms: one grounded in economic fundamentals, the other clouded in political fearmongering. First, economists worry–and understandably so–that low unemployment would lead to unsustainable inflation in the long run; this is commonly known as the Phillips curve. However, given persistently low inflation, the evidence for the Phillips curve has been weak at best in the past few decades — so much so that the Fed recently changed their policy goal to prioritize full employment rather than stressing over inflation. In addition, the federal job program is intended to be countercyclical, meaning that there will only be more jobs added when the economy is in a downturn (when there is a greater threat of disinflation) and fewer jobs added in a recovery.
The other criticism, I imagine, would come from right-wing conservatives against what they believe to be the consequences of a big government, namely a larger budget deficit and the crowding out of private spending. Yet, crowding out is only a real issue when the economy is near full employment, while obsessive concern over the deficit only paralyzes policymakers from doing what’s necessary to save the economy. And if history is to be a guide, past economic crises would have been resolved sooner had the government played a larger role in stimulating the economy. During the 2008 Financial Crisis, the Obama Administration passed a lackluster Recovery Act that fell short of what the economy needed, leading to a prolonged and deep recession that destroyed millions of jobs.
The bottom line here is this: as long as our political and health crisis continues, there’s nothing to stop the economy’s downward momentum. Our status quo is no longer good enough, and doing too little is a much bigger risk than doing too much. Politicians from both side of the isle need to recognize this fact and take swift actions. The American public cannot wait any longer.