• Anuj Jain

Can Progressive Policies Save America from Increased Unemployment?

Under the 2020 Coronavirus pandemic, millions are out of jobs. An estimated 60 million people filed for unemployment this year alone. The US government’s responses have been few and far between. If the US government were to respond any time soon, what kind of policy measures could it take? Two major options being pushed by progressives are a Universal Basic Income and a Federal Jobs Guarantee.

A Universal Basic Income, championed by Democratic Presidential Candidate Andrew Yang, suggests that all adults (18 and up) receive a monthly or yearly dividend from the federal government.

A Universal Basic Income, championed by Democratic Presidential Candidate Andrew Yang, suggests that all adults (18 and up) receive a monthly or yearly dividend from the federal government. Estimated figures would most likely be around 1000 dollars a month or 12,000 dollars a year. A Universal Basic Income is intended to address many major issues that scientists, economics and politicians anticipate the United States entering in the near future. For example, as AI (artificial intelligence) capabilities improve exponentially, more and more jobs are likely to be replaced. Thus with higher amounts of unemployment, less people have access to money, and a UBI could provide a lifeline for those with limited experience or skill.

A common criticism of the proposed Universal Basic income is that it would be costly for the US government, and therefore would raise taxes all across the board. Where exactly does all the money come from? UBI activists argue that the government can afford it without increasing federal taxes by reallocating money or reaching further into the national debt. Some are even willing to sacrifice minimum wage and health care policies in favor of the UBI. While our government may be able to afford a UBI plan, it would definitely lead to corner-cutting in other programs and sectors.

Although UBI is a relatively new concept in the United States, it has been conceived of and executed in other parts of the world. Finland commissioned a Basic Income study on 2000 people, giving them €560 per month. Reports were positive: participants reported better mental health, better finances, and even higher confidence. Furthermore, Alaska has run an on-again off-again UBI-esque system since the 80s. In Alaska, as of 2017, every person received $1100 (including children). Skeptics may speculate that a UBI would decrease employment and work-ethic, but both Finland and Alaska suggest that employment either maintains or increases as a response to a UBI.

However, we must keep in mind Alaska's low population and Finland’s small test group. A widespread UBI would be undeniably costly and wieldy. A lot of the money that would go to fund a UBI could arguably be much more efficiently spent on giving the poor direct aid. Why should people in the top 5% wealth bracket also receive 1000 dollars a month when the bottom 50% of the wealth bracket could get far more value from it? If anything, a UBI would likely replace certain healthcare, insurance or even welfare policies which could leave the disadvantaged even worse off.

Fundamentally though, even in a pandemic, our government hasn’t actually redirected any more funds since the original 2.2 trillion dollar CARES Act. While it definitely isn’t too late for the federal government to implement a nationwide UBI plan, it doesn’t seem likely that it will materialize anytime soon. However, a UBI isn’t the only progressive policy with potential.

A Federal Jobs Guarantee, another proposed policy, is exactly what it sounds like. The US Federal Government would offer every adult citizen in the United States a voluntary job opportunity. Jobs would be developed and monitored by the Department of Labor. The system isn’t mandatory, so if someone finds a job outside the policy they could obviously accept the job. While many people are wary of this communist-sounding idea, the military has essentially acted as a jobs program for many formerly unskilled soldiers.

Unemployment has been an enduring issue in the U.S, but under a Covid-19 lens, it seems that now a Federal Jobs Guarantee is more important than ever. It would give currently unemployed people job security and opportunity, and could produce a wide variety of economic benefits.

Despite these theoretical positives, there are plenty of criticisms directed at the idea. Economically speaking, how would our government afford funding potentially millions of jobs? Furthermore, with higher employment salaries, inflation is expected to increase past the 2% threshold which could create disastrous economic consequences. Additionally, does our Department of Labor even have the means to handle and manage such a large sum of workers?

While both a Universal Basic Income and a Federal Jobs Guarantee are creative and progressive solutions to America’s growing income inequality, neither are perfect. However, it appears that at least one of these policies is expected to comprise part of the Green New Deal (more likely a Federal Jobs Guarantee), a major piece of legislation being pushed by the Biden Administration. It is actually possible that current Edgemont students may work in a job managed by the government.