How to Guarantee a Job for Every American

In our Making Sen$e report on youth unemployment earlier this month, we examined obstacles inner-city youth face to finding jobs.

Compiling our first Making Sen$e report on youth unemployment earlier this month, we were hit with the staggering statistic that 95 percent of black male teen drop-outs are jobless. Each month, we calculate our “Solman Scale” — a more inclusive measurement of unemployment than the official unemployment rate, and we’ve been well aware of the rise in youth black unemployment. (Look for our latest Solman Scale here on Friday after the Bureau of Labor Statistics releases July unemployment data.)

To keep the conversation going, we turned to Duke’s William Darity for his perspective. Darity has previously appeared on Making Sen$e, talking to us about colorism in the labor market and a government jobs guarantee program.

Monday on the Business Desk, Boston Private Industry Council head Neil Sullivan explained how America pales in comparison to European countries that set up their young people with jobs through the education system. He warned, “We’re going to get back to integrating teen employment, youth employment, as part of the American education experience or we’re going to be less productive than our economic competitors.” In light of the dire joblessness affecting youth, Darity now passionately renews his case for such a government jobs program.

William Darity: Ninety-five percent joblessness for teen black male drop-outs? That estimate, from Northeastern University’s Andrew Sum, borders on the fantastic as an indictment of the American labor market.

Add to Sum’s damning statistic the finding that blacks with some college education or an associate’s degree experienced higher unemployment than whites who had dropped out of high school, and you can see this racial gap in unemployment is a profound index of the degree of discrimination in American labor markets.

Where there’s unemployment, there’s imprisonment. Male high school drop-outs of all races are nearly 50 times as likely to be imprisoned as their peers of the same age who have a college degree. But in a 2009 study, Sum’s Center for Labor Studies at Northeastern found that almost one quarter of all young black men ages 16 to 24 who have dropped out of high school are in jail, prison or juvenile justice institutions. These conditions should be an automatic call to arms for dramatic social change to create substantive work opportunities for all of these young men.

While the burden of unemployment weighs heavily on all young people, joblessness continues to afflict black youth more than others. Bureau of Labor Statistics’ (BLS) estimates for June 2013 peg the unemployment rate for blacks 16 to 19 years of age, regardless of gender, at a staggering 48.6 percent; the unemployment rate for whites in the same age range is 22.7 percent.

Moreover, the unemployment rate for adult blacks has remained roughly twice as high as the rate for adult whites continuously since employment statistics by race first were collected 50 years ago.

At least as disturbing, the black rate is approximately twice as high at each level of educational attainment. For example, among persons 25 years and older in 2011, blacks who had not completed high school had a joblessness rate of 24.6 percent; the rate for whites with a similar educational attainment was 12.7 percent. Black adults who had completed high school had a 15.5 percent unemployment rate; whites who had completed high school had an 8.4 percent unemployment rate. Blacks with some college education or an associate’s degree had a 13.1 percent jobless rate; whites had a 7 percent rate. Finally, blacks 25 years and older who had completed college had a 6.9 percent unemployment rate; white adults who had completed college had a 3.9 percent unemployment rate.

The discriminatory climate is reinforced by Princeton’s Devah Pager’s field experiments in Milwaukee and New York City. We know that it’s harder for ex-convicts to obtain work than it is for non-convicts of similar age and educational attainment. But more surprisingly, Pager found that black male job applicants with no criminal record had a lower likelihood of receiving a call back for an interview than did white applicants who had been convicted of a felony.

Racial discrimination underlies this country’s severe racial employment gap, but blacks are not the only demographic struggling to secure employment. Young veterans, particularly those who served in Afghanistan, Iraq or both, return to civilian life with lower odds of finding work. According to BLS data, these veterans ages 18 to 24 had an unemployment rate of 20 percent in 2012, higher than the rate for non-veterans in the same age group, which was 16.4 percent.

But those veterans are not alone. Just about everyone is having a tough time finding work in the economy. A 2010 New York Times story from Peter Goodman on “the new poor” indicates that even well-paid white professionals, once accustomed to six-figure salaries, have confronted long-term unemployment so extreme that they’ve depleted their personal savings, exhausted their eligibility for unemployment benefits and skipped on filling their prescriptions. Jean Eisen, who at the time she was quoted in Goodman’s article had been out of work for two years, observed, “There are no bad jobs now. Any job is a good job.”

There’s a Solution

Persistent high unemployment has produced a crisis for virtually all Americans. But we can resolve the crisis by adopting a federal job guarantee for all citizens.
A system of job assurance, rather than unemployment insurance, could have been implemented at any point by presidential directive under the mandate of the Full Employment and Balanced Growth Act of 1978 (popularly known as the Humphrey-Hawkins Act).

Rep. John Conyers, D-Mich., has proposed a new bill: the Humphrey-Hawkins Full Employment and Training Act, which could pave the way for implementation of a federal job guarantee.

The idea is straightforward: any American 18 years or older would be able to find work through a federally funded public service employment program — a “National Investment
Employment Corps.”

The basic idea has been endorsed by policy analysts as disparate as Kevin Hassett from the American Enterprise Institute and Jared Bernstein from the Center for Budget and Policy Priorities. The Congressional Black Caucus included the proposal in their budget and deficit commission report in 2011.

Each National Investment Employment Corps job would offer individuals non-poverty wages, a minimum salary of $20,000, plus benefits including federal health insurance. The types of jobs offered could address the maintenance and construction of the nation’s physical and human infrastructure, from building roads, bridges, dams and schools, to staffing high quality day care.

The program would include a training component to equip employees with the skills necessary to fill state and municipal needs.

The program would be cost effective, too. Suppose that the program put 15 million Americans to work — the total number of persons out of work at the nadir of the current depression — at an approximate cost of $50,000 per employee. The bill for the program would be $750 billion.

In 2011, the total cost of the nation’s anti-poverty programs was about $740 billion. But since the National Investment Employment Corps would function simultaneously as an employment assurance and antipoverty program, the existing anti-poverty budget could be slashed drastically, with those savings going to finance the job guarantee.

This initiative would remove the threat of unemployment and provide a direct route to sustained full employment, particularly for those groups intensely struggling to find steady work: Young veterans, young people in general, blacks subjected to discrimination in employment, all high school drop-outs, and especially black high school drop-outs. While providing a particular benefit for those Americans in the most desperate straits, a universal job guarantee would benefit all Americans who could experience joblessness.

As reported in this week’s Making Sen$e story on youth unemployment, the number of jobs available to 16- to 19-year-olds has decreased by half since the 1990s.

This entry is cross-posted on the Making Sen$e page, where correspondent Paul Solman answers your economic and business questions