THE MSB HAS SUPPORTED A WPA STYLE JOBS PROGRAM FOR A LONG TIME
Once a fixture of Democratic Party platforms, the idea’s resurgence is evidence that a growing number of Democrats see their political fortunes tied to their embrace of the kind of big, expensive programs that used to be the party’s bread and butter.
The Mad Sociologist Blog has always advocated for a government program that eliminates unemployment by directly hiring those who are able and/or willing to work. This is especially true during times of economic struggle. Here’s what I wrote in 2010.
Until Americans are back to work there is no honor to restore. If corporations won’t do it, then the government should.
That’s right, I said it. The government should get into the business of hiring. For generations, we’ve been socialized to believe that it is the economic sector, dominated by corporations, that provide the jobs. The role of the government is to create the atmosphere by which businesses will continue to hire, namely low taxes, lax regulation and nothing to say about wages and benefits. Let the invisible hand of the free market take care of all that stuff and all will be right with the world.
So for thirty years policies have been reshaped to maximize the potential of the free market to provide jobs and to minimize government interference on the corporate elite. Weeell…unless that interference is in the form of lucrative no-bid contracts, low-interest loans, government subsidies to satisfy social needs and, who can forget, bailouts when everything goes horribly wrong.
Consequently…we have the highest sustained unemployment rate since the Depression. Currently, corporations from Wall Street to IT to supermarkets are raking in the profits. Great! We have been told time and again that corporate profits mean jobs. All corporations need is more money in their pockets. Give them enough tax breaks and the hiring will begin. Indeed, it’s our high taxes that stifle hiring. So now we have rising profits and one of the lowest tax rates in history; so the hiring should begin any time now. Right?
Unless, of course, this theory is balderdash.
With all of this money going into the pockets of the corporate elite, where are the jobs? After all, they are spending their money on advertising. Who are they advertising to? It turns out they are turning their attention to consumers in other nations. They really don’t need American consumers anymore. Therefore, there’s no incentive to provide jobs for Americans. The bottom line is that corporations are not going to start hiring any time soon, especially when they can go anywhere in the world and hire people for pennies on the dollar without the benefits expected by spoiled American workers.
In fact, we can make the argument that hiring Americans has never been the function for corporations. For a span of just over a hundred years American industry prospered by virtue of the availability of coal and oil and dynamic urban centers with growing populations. Eventually, labor was able to assert some power over the industrialists and reverse many of the Industrial Revolution’s greatest injustices. There was a time when an American worker could live the American dream with naught but a factory job. So long as the factors of production remained dependent upon local resources and labor and easy access to capital corporate owners were best served to stay put and negotiate a balance of power with unions. But we must understand that this choice was in the historically specific best interests of the corporate elite, and the primary function of any institution is to perpetuate itself, nothing more.
Yet in the seventies and eighties, corporations began to sever their ties to the local resources on which they thrived. The rapid advances in information technology, transportation and surveillance opened the door to an industry no longer shackled to a localized identity. The multinational has been around in some form or another since the East India Company. Today we can speak of a global economy and the opening of world markets. One company can purchase raw materials in one country, process those materials in another, assemble them in yet another, then bring them to market in even another. All the while the upper management can be directing these commodity chains from a laptop in Tahiti. The geo-presence of the corporation has become transitory.
There’s no reason to believe that this is going to change any time soon. Corporations have no inherent responsibility to hire anyone or to build anything in any one particular place. They are not patriotic when patriotism negatively affects the bottom line. This is what the economic landscape is going to look like from now on. Until the next great technological revolution, there is no reason to believe that this landscape will level out for working Americans any time soon. And that next great technological revolution may not be one held in the working man’s favor. As it stands, we can no longer assume that corporations will have any part in building the American dream. Indeed, it’s more likely that we will have to build on this dream in spite of corporate interests.
Yet there is considerable work to be done. From the desire for green technologies to infrastructure, from the environment to education, America is falling apart at the seams. Instead of investing in high-speed rail Americans are actually tearing apart paved roads and laying gravel! Come on! This was the nation that built the transcontinental railroad and laid the trans-Atlantic cable (both with large government subsidies, I might add). Now China outpaces us in high-speed rail and even wind energy!
So here’s the situation. We have work to do, and workers who want to do it. Yet corporations are sitting on their money. Well, it is their money to sit on (despite getting billions from the taxpayers. Possession is 9/10ths of the law). So what are we to do? Should we as a nation simply accept this atrophy because corporations are not willing to invest? Should we as a nation with waiting hands allow our human resources to languish idly? Of course not! No nation has ever thrived unless some governing authority was willing to invest in the potential of its citizens. At this point, we already know that corporations are not willing to do that. So what are we waiting for?
Let’s let our representative government do its job and actually represent the citizens…all of the citizens, not just the rich ones. Here’s how we do it.
First, we recognize that meaningful work is a right. It is not a privilege administered by the elite members of our society to those fortunate enough to be so bestowed with meaningful work. Every citizen, every human being, has something to contribute to his community, his nation, and the world in general. And every citizen should be allowed to do so if he or she wants to. If corporations are unwilling to embrace the value of human potential then why should we try to bribe them with tax cuts and subsidies to do just that, especially when we already know that they are willing to take the money and run? If a man or a woman wants to work, then all means should be available to allow them to do so.
Secondly, we establish a comprehensive national jobs program in the tradition of Franklin Roosevelt’s CCC or WPA. Only we expand this program to be all-inclusive. Universal employment! If we want green technology then let’s invest in it by investing in the human potential to build it. Better roads? There are men and women out there who want to do it. High-speed rail? Let’s start building it now.
What’s more, these jobs should pay a living wage. There is no reason why a working man and woman should have to live in poverty, and certainly no reason why their children should be so condemned. If we want people to work then work should be worth doing. The common sense paradigm is wrong. Welfare does not discourage people from working, low wages and no benefits discourage people from working. Why should I work if working doesn’t actually raise me out of poverty? Meaningful work involves meaningful compensation, including pay that allows for a quality standard of living, funds set aside for a comfortable retirement, access to health care, education and other life chances for the family. This is what human beings work for; not for pay, but for a secure and prosperous future.
Yet the conservatives are correct in suggesting that such a program creates dependence on the government, and that is dangerous. They are correct. Meaningful work should also involve opportunities to learn new trades and skills and develop new potential in the individual. Trades, skills and potential are something that the individual can take with her anywhere she goes. With increased knowledge and competence one is never dependent. It is those very qualities that encourage independence.
Yes, but Mike, how are we going to pay for this? Such a program would be ruinously costly to our nation. After all, we can’t keep building deficits. Well, true. There is most likely going to be an initial deficit for such a program. This deficit won’t last long, however. First, we will no longer be paying welfare or Medicaid or any such entitlement.¹ If people are working and making a living wage there will be no such need (and I’ll address universal health care later). Increased pay in the hands of working Americans means there will be demand for consumer goods, as well as a growing tax base. There will be no reason to raise taxes on working Americans.
However, we will have to raise taxes on that sector of the population that has turned its back on America. And I see no problem with that. We can start with a steep import tariff on all consumer goods.² If you are a corporation which wants to sell its products in the United States, but you are unwilling to actually hire Americans, then you should have to pay for access, call it an impact fee. Companies that hire a percentage of resident American workers should have that percentage taken from their impact fees, after all, those are workers who are not on the government payroll. We can even use tax incentives to encourage American companies to provide the same compensation and working standards as will the government program. If a company does not want to pay these taxes and tariffs all they have to do is open shop in the US and follow basic rules for respecting labor.
One could argue that these taxes and tariffs would simply drive up the costs of consumer goods, and ultimately nullify the effects of higher wages. Yes, raising taxes can be shifted to the consumer, but only so much. Remember your high school economics class? Raising costs lowers demand. At some point, the business cannot raise costs because consumers will refuse to purchase expensive products. At the same time, other producers will find cheaper means by which to produce these products, such as manufacturing them in the United States. Three cheers for the free market in action!
Of course, this idea would be hard fought in our government as it stands now. You will hear fear mongering about socialism and Stalinist tyranny and other nonsense. Understand that the real reasons corporations don’t want to see this kind of program has nothing to do with tyranny. Corporations are more than happy doing business with tyrants if it works in their favor. No. The problem is that such a program would empower American workers. It would create an alternative to working for a deadbeat corporation providing starvation wages and no benefits. Talk about dependency, conservatives have no problem with working Americans being dependent on the corporate elite while they decry dependence on government. A universal jobs program would break that cycle of corporate dependency; one that more often than not dispossesses working Americans.
Opposition to this policy has nothing to do with economics and everything to do with power. A strong demand base should be a goal for the corporate elite, because such a population will become solid consumers of corporate goods and services. Yet corporations refuse to build such a demand base. It’s about power, keeping the vast majority of Americans desperate and in their place…yes, dependent.
There is no reason why a government should not invest in its own human resources to accomplish its goals. There’s no reason to depend on a capricious corporate elite to fulfill this function. Let’s accept that conservatives are correct, that corporations owe no loyalty to America and are not responsible for improving the lives of working Americans. So we should, through our elected representatives, take matters into our own hands.
A universal jobs program.
- Turns out that this was not especially accurate. Even in the event that we create a federal jobs program, we will still need social welfare programs. As it stands, most social welfare goes to children, the elderly and the disabled, groups that we should not expect to participate in a jobs program.
- I know, this seems to contradict a recent post that I made against protectionism. In this case, however, there is no contradiction. Hear me out. My problem with Trump’s tariffs is that they will raise costs for consumers without a guarantee that well-paying jobs will result, and no protection for the victims of the certain economic rearrangement. In this case, however, the tariffs are going directly into creating jobs for Americans. There’s a guaranteed benefit. I can also reference another post I made about changing the tax structure to one that taxes wealth rather than income.