By Don Wallis

A controversial idea worth considering.

Greg Ip, in an opinion piece in the May 3, 2018, edition of THE WALL STREET JOURNAL, titled Right to a Job Comes With a Catch, discusses a proposal by Senator Bernie Sanders that “would guarantee a job to anyone who wants one, at $15 an hour plus benefits.”

Although the official unemployment rate is 4.1% or 6.6 million, if the additional 5.1 million unemployed who do not fit within the federal rubric for calculating unemployment, and 5 million people who work part-time because they cannot find full-time work are considered the actual number of unemployed is 14.2 million.

Mr. Ip asks whether guaranteeing jobs at $15 an hour would be a boon for the economy and for the well-being of the people working within this federal program. Although no one knows with certainty the answer to this question, there are valid arguments for the opposing positions on the issue.

Proponents argue that “… a job guarantee would cost a lot, but ignoring the obvious political impediments, the price tag isn’t the catastrophe some critics claim … . Many of the unemployed wouldn’t take up the federal offer because they expected to get something better, didn’t like what was being offered or faced some sort of obstacle (family, disability, etc.).” The cost of federal programs such as Medicaid and unemployment insurance would be reduced as people who were earning salaries no longer needed government assistance.

Opponents of a universal jobs program argue that it would be inflationary; $15 an hour would become the de facto minimum wage.

“According to the Economic Policy Institute, 39% of the workforce, some 54 million people, now earn $15 an hour or less. All would have an incentive to quit and join the federal program … millions of workers would end up on the federal payroll instead of the private sector,” depriving large sectors of the economy where the average wage is below $15 per hour, such as the hotel and restaurant industries, of their workforce.

Mr. Ip concludes that “enabling workers to make a decent living is a noble goal; even better is enabling them to do so while serving the needs of a market economy.”

Source—

Right to a Job Comes With a Catch, Greg Ip, THE WALL STREET JOURNAL, May 3, 2018.

Don Wallis has more than 40 years experience in residential and commercial construction, and land development. He also has a law degree and currently teaches Environmental Law at Santa Fe Community College.