Gillibrand's jobs plan another federal program we don't need

Gillibrand's jobs plan another federal program we don't need
© Greg Nash

Rep. Jackie SpeierKaren (Jackie) Lorraine Jacqueline SpeierGlobal Gag Rule is just the tip of the iceberg: Why Repealing the Helms Amendment matters Democrats press to bar lawmakers from carrying guns in the Capitol The Hill's Morning Report - Presented by Facebook - Congress moves to avert shutdown as virus talks stall again MORE (D-Calif.) says the Democratic National Committee’s lawsuit against the Trump campaign, Wikileaks and the country of Russia will distract from the Democrats’ economic platform as we head into the midterm elections.

What economic platform? Democrats seem especially bereft of ideas, especially as the economy barrels ahead, lifting wages and reducing unemployment. What can they offer? What can possibly compete with the unleashing of the private sector that has occurred since the election of President TrumpDonald TrumpMcCarthy says he told Rep. Marjorie Taylor Greene he disagreed with her impeachment articles against Biden Biden, Trudeau agree to meet next month Trump planned to oust acting AG to overturn Georgia election results: report MORE?


Maybe Speier is thinking of Sen. Kirsten GillibrandKirsten GillibrandDemocrats torn on impeachment trial timing OVERNIGHT DEFENSE: 12 removed from National Guard inauguration security | Austin backs lifting transgender ban Biden Pentagon pick supports lifting transgender military ban MORE’s (D-N.Y.) push for a federal work program. That idea is apparently gaining traction amongst liberals and has become a major talking point for the junior senator.


Gillibrand recently told The Nation, “Guaranteed jobs programs, creating floors for wages and benefits, and expanding the right to collectively bargain are exactly the type of roles that government must take to shift power back to workers and our communities.” 

Nonsense. The last thing our economy needs is another major employer — and especially the federal government — competing for workers or Beltway bean counters setting artificial wage levels.

Moreover, we don’t want and can’t afford another giant welfare program when our existing entitlements costs threaten ever-larger budget deficits.

No, Sen. Gillibrand, the way to shift power back to workers is to create a booming economy with business-friendly policies so that nearly everyone can find a job, and employers have to raise wages to fill open slots. That’s a lesson being taught today by President Trump that was never understood by President Obama.

One might assume this is just another hair-brained progressive idea, like free college for all, that will quickly fade from the rational spotlight. But think again; liberal think tanks are working overtime to justify the guaranteed job notion, providing talking points for progressives like Gillibrand aiming to run for president in 2020.

The Center on Budget and Policy Priorities, for one, has commissioned a study by Darrick Hamilton, William Darity, and Mark Paul, that proposes such a jobs guarantee, backed up by a massive new federal agency charged with eliminating “involuntary unemployment” and that would set a floor on wages and benefits.

In a paper entitled “The Federal Job Guarantee — A Policy to Achieve Permanent Full Employment," the authors reference Franklin Roosevelt's use of federal hiring for public works during the Great Depression as a model.  

They argue that a similar situation exists today, noting that in January, when unemployment was only 4.1 percent, there were still 6.7 million unemployed, and some 5 million people working part-time even though they would prefer full-time employment.

Moreover, the authors write, the number of job-seekers still tops the number of openings. (A historical note: During the 1930s, fully 25 percent of the country was jobless, not exactly a reasonable parallel with today).

Their argument is that the official unemployment rate does not adequately reflect how many people are out of work. The authors also suggest that simply being employed does not guarantee emerging from poverty, and that unemployment does not treat everyone equally; minorities typically have higher jobless rates than whites.

Thus, they propose: “The permanent establishment of a National Investment Employment Corps (NIEC) ... [which will] provide universal job coverage for all adult Americans ... [and] eliminate involuntary unemployment.”

Not only will the feds provide jobs for everyone, they will eliminate “poverty wages through the pay structure of the NIEC. The federal job guarantee would provide a job at a minimum annual wage of $24,600 for full-time workers (poverty line for a family of four) and a minimum hourly wage of $11.83.” The pay scale moves higher over time.

The annual cost of the proposal, which they describe as “a policy to transform the U.S. labor market” is estimated at $543 billion, or just under 3 percent of GDP. Gillibrand told The Nation, “We can’t tinker at the margins." This certainly isn’t tinkering.

While it is true that many Americans were unable to find jobs over the past decade, that is no longer the case. The current environment is such that employers are dropping standards, so shallow is the labor pool.

CEOs have told me they have eliminated drug testing, for instance, since so few passed, and another has reported hiring large numbers of convicted felons, because they are available.

Numerous analysts have concluded that as baby boomers retire in large numbers, a shortage of workers could actually slow our economic momentum. 

The Federal Reserve’s Beige Book in January reported, “Most Districts cited on-going labor market tightness and challenges finding qualified workers across skills and sectors, which, in some instances, was described as constraining growth.”

The number of job openings per unemployed worker stood at 1.1 in February, the last month for which we have figures. That is the lowest it has been since 2003, when the data was first collected.  

There are indeed large numbers of people not working, such as the 8.7 million workers under 65 years of age currently collecting disability. There are also an estimated one million people who are heavy users of opioids and some who dropped out of the workforce early, perhaps because of the financial crisis.

Instead of cooking up another way in which the federal government can interfere with the fast-growing private sector, Sen. Gillibrand would be better off climbing aboard President Trump’s program to combat opioid addiction or efforts to help people get off welfare.

Or, if she is sincerely concerned about racial inequality, maybe Sen. Gillibrand and some of her colleagues could work to improve our public education system.

She comes from the state of New York, in which only 19 percent of fourth-grade black children are judged proficient in reading, as compared to 47 percent of white children.  

If she sincerely wants to reduce income and opportunity inequality, taking on the teachers unions and policies that produce such lopsided results would be a far more compassionate and important use of her time. We’re not holding our breath.

Liz Peek is a former partner of major bracket Wall Street firm Wertheim & Company. For 15 years, she has been a columnist for The Fiscal Times, Fox News, the New York Sun and numerous other organizations.