United States needs a solid jobs scheme

Nir Kaissar and Timothy L. O’Brien, Tribune News Service

Millions are unemployed, public budgets are falling apart, the economy is struggling, and the COVID-19 epidemic is raging anew — and most of the $2.7 trillion floor Congress put beneath that misery will soon be gone.

So Congress and the White House are back at the drawing board. Formal bailout packages haven’t surfaced, but policy makers are saying the right things. Treasury Secretary Steven Mnuchin has promised that the focus will be “kids and jobs and vaccines.” Senate Majority Leader Mitch McConnell has said, “We need to stand up an educational system and an economy that works for workers and families.” And House Speaker Nancy Pelosi has called for resources to “fight this pandemic, get our children safely back to school and reopen our economy.”

It’s not clear how they’ll get there. There are some new ideas on the table. McConnell, who has been at odds with the White House but is expected to introduce a set of bills on Monday, would earmark funds for K-12 schools and child-care funding. He also wants to prioritize support for vaccine research, testing and hospitals. Pelosi would set aside $1 trillion for state, local, tribal and territorial governments, $200 billion in hazard pay for essential workers and $75 billion for coronavirus testing and treatment. Much of what they’re proposing, however, seems to be a replay of the first bailout. McConnell wants another round of support for small-business workers and direct payments to families. Pelosi appears to be asking for much the same. The chief sticking point so far is size. Democrats have proposed an additional $3.5 trillion in federal spending, while Republicans want to spend much less — about $1 trillion.

The bailout engineered in the spring was designed to speed money to distressed families, companies and local governments. Nearly half of that $2.7 trillion bailout was funneled to businesses, large and small; about $560 billion went to workers and families in the form of direct, temporary payments and extended unemployment benefits.

The Paycheck Protection Program, which has been riddled with oversight problems, may have preserved about 2 million jobs and it certainly kept myriad small businesses afloat. Hundreds of billions directed to large corporations allowed them to keep moving forward. And apart from all of that, the Federal Reserve put about $3 trillion to work to ensure the financial system didn’t seize up.

Yet roughly 19.2 million Americans are out of work, a once unimaginable figure. If the coronavirus isn’t effectively corralled and the economy doesn’t perk up, millions more will lose their jobs. It’s time for policy makers to think bigger. There’s a way to simultaneously beat back the virus, support workers and families and revive the economy. But it will require more vision than merely using money to bandage problems that aren’t going away.

Unemployed Americans don’t just need cash — they need jobs. Government checks and unemployment insurance put food on the table, but they don’t address numerous other risks associated with job loss. In addition to losing their independence and dignity, the jobless must contend with decaying skills and eroding employment networks — brutal forces that reduce future wages and undermine the well-being of workers, families and communities.

What’s needed is a federal jobs program that puts Americans to work on the country’s most urgent problems. If the federal government were to hire every unemployed American and pay them a living wage of, say, $58,000 a year, it would cost roughly $1.1 trillion annually. (We’re basing that on the wage one adult must earn to support a family of four in Cook County, Illinois, according to MIT’s living wage calculator.)

That’s a huge amount of money, of course, but it will decline meaningfully over time as the economy recovers, drawing workers back to the private sector. It’s also a fraction of what the federal government is likely to spend _ and seems prepared to spend _ during this crisis to keep the economy and the social fabric from fraying.

A big, bold jobs program would be a vast improvement on the patchwork of programs in the first rescue package. For example, the bailout’s one-time payments to average Americans of $1,200 for adults and $500 for each child were only modestly helpful to workers who still had jobs; they were woefully inadequate for those who didn’t. And it’s still unclear how much of the $669 billion allocated to the PPP made its way to workers. A jobs program, by contrast, would provide meaningful support _ and perhaps more importantly work _ to those who need it most.

A jobs program would also address concerns that supplemental unemployment insurance is a disincentive to work because those payments may outstrip wages. We think that debate masks the real problem: decades of substandard pay for workers that doesn’t amount to a living wage. A federal jobs program would compete with private employers, forcing them to raise wages to attract and retain workers, helping reverse the growing wage inequality that has decimated the middle class.

For starters, we think the government could put its new federal employees to work in health care, education and infrastructure. The country still needs a coordinated effort to test, trace and track the coronavirus and revivify our public health network. Schools will need to reinvent how they teach and where students are taught. More schools should be built and more teachers should be hired. And we have to attend to the nation’s crumbling infrastructure. That will involve rebuilding highways, ports, railways, levees, airports and public transportation, while broadening access to clean water and broadband service.

There’s no reason why those projects can’t launch today. It’s been done before. Just think about the alphabet soup of jobs programs and public infrastructure spending, from the Works Progress Administration and Civilian Conservation Corps to the Public Works Administration and Tennessee Valley Authority, that helped the New Deal blunt the impact of the Great Depression.

The fallout from COVID-19 offers a historic opportunity to tackle the country’s biggest problems and put the U.S. economy on a more stable, productive and equitable footing. McConnell, Pelosi, Mnuchin and their fellow policy makers need to go well beyond their current thinking and seize the moment.