Affordable Public Jobs Program Could Provide Work For Millions Of Americans, According To New Report

Release Date: 
March 7, 2011

NEW YORK – As budget debates continue to play out at the state level, it is apparent that Americans everywhere are still suffering from the long-tail of the recession and need jobs, not austerity measures that will likely reverse emergent economic gains. A new report by the policy center Demos addresses this need head-on, calling for an affordable and efficient federal jobs program that could meet critical community and national needs while providing meaningful employment for millions of people who lost their jobs in the Great Recession. 

"Back to Work: A Public Jobs Proposal for Economic Recovery," authored for Demos by Philip Harvey, Professor of Law and Economics at Rutgers School of Law, is conceptually simple: Create jobs for the unemployed directly and immediately by funding vital services and needs in communities across the country--from retrofitting of buildings to repairing our roadways to providing vital services for seniors and children.

The estimated net cost of creating 1.4 million new jobs (1 million directly and another 400,000 thousand through multiplier effects) would be $28.6 billion per year. Furthermore, this proposal could target communities who have seen the greatest loss of jobs: non-college educated workers, young people, and African American and Latinos--all of whom experience unemployment rates twice as high as the average population.

"The advantage of the proposal lies in its unique ability to serve the goals of anti-recessionary fiscal policy while simultaneously serving the social welfare needs of jobless workers," Harvey wrote. "There is no other anti-recession strategy that can do either of these things as well as the direct jobs proposal, let alone combine them in a single programmatic initiative."

Harvey argues against the prevailing wisdom that the cost of such a program poses an insurmountable obstacle. He estimates that this proposal would create enough jobs to bring the unemployment rate down to 4.5 percent, and yet would require a total net cost less than half the size of the $858 billion increase in the federal deficit that Congress readily accepted this past December to fund a compromise package of tax cuts.

The proposal could be funded by any number of sources, including through a financial speculation tax, by repealing less than 2/3 of the extended Bush tax cuts, or through straight deficit financing, for example.

"Funding direct jobs, even on a pay-as-you-go basis, would be surprisingly easy to do if the political will to create jobs really did animate the political establishment," Harvey writes.

Harvey addresses other practical questions related to the direct jobs proposal in detail, including:

-- Who would administer the program?
-- What kind of work would persons employed in the jobs program do?
-- What wages would the program pay -- and why?
-- Would the program pay a "living-wage"?

"Recently, we've heard the President talk about job creation as an important component of his budget proposal. That's a good sign that there is the will in the White House to start working vigorously to get Americans back to work and out of this never-ending recession," said Tamara Draut, Vice President of Policy and Programs at Demos.

"This recession has been tragic in both its depth and length, with 14 million active job-seekers still without jobs, and millions more working fewer hours than they'd like. This is a plan that should have bipartisan support, as it acknowledges the importance of jobs to individual dignity and our nation's spirit. At less than eight-tenths of one percent of the proposed 2012 budget, this plan is an affordable and feasible way to get Americans working again and meet our most critical national needs."

A press call to discuss the proposal, along with a report by Policy Matters Ohio outlining the effects of public job creation at the state level, will be held at 11 AM EST today.

Experts speaking on the call:

-- Tamara Draut, Vice President of Policy and Programs at Demos
-- Philip Harvey, Professor of Law and Economics at Rutgers School of Law and author of the report
-- Wendy Patton, Policy Matters Ohio, author of the Ohio jobs report
-- Brian Rothenberg, Progress Ohio

Call-in information: # 1 (888) 491 - 8283, Use Passcode # 49381511 or Call Title 'PUBLIC JOBS'

Please RSVP to trusch@demos.org if you are planning on attending the call.