WEBVTT - Everybody Gets a Job!

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<v Speaker 1>On the Netflix show House of Cards, there's a plot

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<v Speaker 1>line where fictional US President Frank Underwood announces a plan

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<v Speaker 1>to make sure every American has a job. Today, that

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<v Speaker 1>platform is no longer looking like fiction. A group of

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<v Speaker 1>serious economists wants to spend hundreds of billions of dollars

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<v Speaker 1>a year to create fifteen million jobs, and the plan

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<v Speaker 1>is picking up momentum. At least three potential Democratic candidates

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<v Speaker 1>for president support a job guarantee. So would this potential

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<v Speaker 1>policy give more Americans a better quality of life? Can

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<v Speaker 1>America even afford it? Or is this just the latest

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<v Speaker 1>political fad? Welcome to Benchmark. I'm Scott Landman, Economics editor

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<v Speaker 1>with Bloomberg News in Washington, and I'm Daniel Moss, Economics

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<v Speaker 1>row and her editor at Bloomberg of Community Newial. This

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<v Speaker 1>week on Benchmark, we're talking about this job guarantee proposal.

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<v Speaker 1>The economists behind it say it would create jobs for

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<v Speaker 1>fifteen million workers paying fifteen dollars per hour that's well

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<v Speaker 1>above the minimum wage in most parts of the country

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<v Speaker 1>and what many employees in the private sector are making.

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<v Speaker 1>And it would also create an additional four point two

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<v Speaker 1>million jobs in the private sector along with generous health benefits,

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<v Speaker 1>but some people have been criticizing the plan and say

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<v Speaker 1>it's not so feasible. Let's talk about it with one

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<v Speaker 1>of the principal authors of this proposal. L Randall. Ray

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<v Speaker 1>is a professor of economics at Bard College in New

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<v Speaker 1>York State and a senior scholar at the Leavy Economics

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<v Speaker 1>Institute there. Randy, thanks so much for joining us on Benchmark. Hi,

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<v Speaker 1>thanks for letting me come on. So Randy, why now

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<v Speaker 1>for this job guarantee proposal. Well, we've been working on

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<v Speaker 1>this for twenty five years or so, but there now

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<v Speaker 1>is an opening, an opportunity to get this out to

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<v Speaker 1>the public and out of academics. So that's that's why.

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<v Speaker 1>What's the opportunity, Well, it seems that a number of

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<v Speaker 1>people within politics but also at think tanks are starting

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<v Speaker 1>to realize that even after a decade of recovery, and

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<v Speaker 1>even after it appears we have reached something that many economists,

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<v Speaker 1>including people at the FED want a call full employment.

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<v Speaker 1>We know that there are millions upon millions of people

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<v Speaker 1>left behind, and so there's a I think a very

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<v Speaker 1>widespread recognition that we need to do something. Is there

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<v Speaker 1>any parallel for this, I mean, has this been tried

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<v Speaker 1>anywhere before? Oh? Sure, yeah, yeah, many times. Um. Now,

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<v Speaker 1>what we're promoting, and there are several other proposals there's

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<v Speaker 1>somewhat similar to ours, is a universal job guarantee across

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<v Speaker 1>the whole country. Usually what has been tried would be

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<v Speaker 1>smaller programs, maybe targeted programs, let's say the heads of

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<v Speaker 1>households with poor families, or they have been time limited

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<v Speaker 1>saying the depths of a deep recession or depression, including

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<v Speaker 1>the United States, we had the New Deal jobs programs

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<v Speaker 1>so on, either more limited or smaller scale. Yes, they've

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<v Speaker 1>been tried many times all over the world. In fact,

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<v Speaker 1>I would go further than that. I would say that

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<v Speaker 1>any country that has experience sustained truthful employment has had

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<v Speaker 1>at least one of these programs in operation, and in

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<v Speaker 1>many cases they've had many different variations of a job

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<v Speaker 1>guarantee in place. Randy, you're right on the Levy website

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<v Speaker 1>that the generous wage and benefit package would become standard

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<v Speaker 1>across the country, as all private and government sector employers

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<v Speaker 1>would need to match it to retain workers. And we're

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<v Speaker 1>talking about pretty generous health benefits here and so on.

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<v Speaker 1>Is this also another way to produce a kind of

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<v Speaker 1>universal healthcare system for the American public. Yeah, it's that's

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<v Speaker 1>a minimum wage and benefit package. My professor was Himan Minsky,

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<v Speaker 1>who's very well known for the financial instability hypothesis and

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<v Speaker 1>the so called Minsky moment that we went through in

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<v Speaker 1>two thousand and seven. But I remember him in the

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<v Speaker 1>classroom always asking the students, Hey, what's the minimum wage

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<v Speaker 1>now in the United States? And so of course some

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<v Speaker 1>bright student who was awake would say, oh, it's say no,

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<v Speaker 1>it's not. It's zero. If you can't get a job,

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<v Speaker 1>your wages zero. You can't have an effective minimum wage

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<v Speaker 1>unless there is a job available for everybody who wants

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<v Speaker 1>to work. So this would set the universal minimum wage

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<v Speaker 1>that anyone who wanted to work would be able to receive.

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<v Speaker 1>In the same way, whatever benefits this program provides will

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<v Speaker 1>become the national minimum package of benefits. I can imagine

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<v Speaker 1>the siren call on site Fox News give away for everyone,

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<v Speaker 1>welfare state, we can't afford it. How do you combat

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<v Speaker 1>that idea? Well, we have gotten used to the idea

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<v Speaker 1>of minimum wages. We've had minimum wages in place for

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<v Speaker 1>a very long time. And what the minimum wage does

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<v Speaker 1>is it's that's the minimum that you can legally employ

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<v Speaker 1>some buddy at I think that that is widely accepted.

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<v Speaker 1>I won't try to argue that of all economists support

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<v Speaker 1>the notion, but by far the vast majority do. The

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<v Speaker 1>idea is that that is a proper role for the

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<v Speaker 1>government to set a minimum standard with regard to wages.

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<v Speaker 1>But we also set many other minimum standards in the

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<v Speaker 1>way that you can treat your workers, and uh we

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<v Speaker 1>even set standards on the number of hours per day

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<v Speaker 1>and per week and so on. So I think that

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<v Speaker 1>is very legitimate. So we are moving toward provision of

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<v Speaker 1>time off when you have a new baby. Vacation time

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<v Speaker 1>now in the United States is way way behind in

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<v Speaker 1>comparison with any other rich, developed capitalist country in the world.

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<v Speaker 1>We uh, we don't if we don't mandate paid vacation time,

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<v Speaker 1>we don't mandate paid time off for new parents. Virtually

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<v Speaker 1>every other country in the world with a at least

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<v Speaker 1>a moderate living standard already provides those things. So these

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<v Speaker 1>are widely accepted among all of our comparison countries. So

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<v Speaker 1>there's there's nothing unusual about it. This is not extreme

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<v Speaker 1>at all. Now we just need to address how the

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<v Speaker 1>country would pay for this. Uh, you talk about proposing

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<v Speaker 1>that Congress would appropriate funds for it without new taxes.

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<v Speaker 1>But let's just take a step back for a second.

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<v Speaker 1>You're also the author of a number of books, including

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<v Speaker 1>Understanding Modern Money, The Key to Full Employment, and Price Stability.

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<v Speaker 1>So what is modern money theory and how does it

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<v Speaker 1>relate to this proposal? Well, there are several aspects to

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<v Speaker 1>modern money theory. One of the things that we've done,

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<v Speaker 1>also for about twenty five years, is study the way

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<v Speaker 1>that the government really spends. And um, I think that

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<v Speaker 1>virtually no academics really understood the processes that we go

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<v Speaker 1>through any time the government makes a payment. We completely

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<v Speaker 1>understand that, and we have tried to get these ideas

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<v Speaker 1>out in a variety of forms, including academic papers, but

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<v Speaker 1>also with more simple explanations for the average public. So,

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<v Speaker 1>if I wanted to say that very simply, the way

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<v Speaker 1>that the government spends today is through key strokes, that is,

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<v Speaker 1>credits to bank accounts, Alan Greenspan said exactly the same thing.

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<v Speaker 1>He said, we can't run out of money. All we

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<v Speaker 1>do is we created as we spend. Bernanke said the

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<v Speaker 1>same thing, both on sixty Minutes and before Congress when

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<v Speaker 1>he's asked where on earth did the FED get those

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<v Speaker 1>trillions of dollars that it used to bail out the

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<v Speaker 1>financial system, and he said, well, we have this new

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<v Speaker 1>device that's called a computer, and all we do is

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<v Speaker 1>key stroke entries into balance sheets. You know that that

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<v Speaker 1>is the way that the government spends. So how are

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<v Speaker 1>we going to pay for it? We're gonna pay for

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<v Speaker 1>it in exactly the same way that we pay for

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<v Speaker 1>all other federal government spending, which is key strokes. These

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<v Speaker 1>are sort of directed by the Treasury after the allocation

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<v Speaker 1>has been budgeted by Congress. The Treasury directs the Federal

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<v Speaker 1>Reserve Bank to make the payments for the Treasury. And

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<v Speaker 1>the way that the Fed does that is by crediting

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<v Speaker 1>bank reserves at private banks, and then those private banks

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<v Speaker 1>credit the accounts of the recipients of government spending. That

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<v Speaker 1>is how the government spends. So how are we going

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<v Speaker 1>to pay for it the same way we pay for

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<v Speaker 1>all other government spending. But doesn't this mean that the

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<v Speaker 1>bond market will provide an ultimate check? The government does

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<v Speaker 1>have to borrow this money. It would have to borrow it.

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<v Speaker 1>We're already seeing interest rates go up in the first

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<v Speaker 1>few months because of the Republicans tax cut plan and

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<v Speaker 1>some new government spending. Isn't this just going to push

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<v Speaker 1>it up so high that will become more difficult to

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<v Speaker 1>pay back the money in the long run. Well, the

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<v Speaker 1>real reason the rates are going up is because the

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<v Speaker 1>FED is decided that it's time to raise rates, and

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<v Speaker 1>they've been increasing the overnight rate target and using that

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<v Speaker 1>to try to push up longer term rates. So I

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<v Speaker 1>think that this is a matter of policy. Will the

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<v Speaker 1>FED continue to raise rates might at some point it

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<v Speaker 1>will decide to lower rates and then the rates will

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<v Speaker 1>go down. If the FED reacted to this program worrying

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<v Speaker 1>that maybe it would cause inflation, then the FED might

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<v Speaker 1>push rates up. But this is a policy decision, and

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<v Speaker 1>you haven't mentioned it yet. But we have run all

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<v Speaker 1>of the the programs features through a model that's used

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<v Speaker 1>by ecmoms all over the country and they've been using

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<v Speaker 1>it since the early seventies. It has a very good

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<v Speaker 1>track record, and the boost to inflation is very very tiny,

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<v Speaker 1>and we do run simulations with the FED reacting against

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<v Speaker 1>the inflation and it has a very insignificant effect on

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<v Speaker 1>the outcome of them simulations. So Randy, Ultimately, how realistic

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<v Speaker 1>do you think this is going to be? Don't you

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<v Speaker 1>think you'll need a strong Democratic Congress or control of

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<v Speaker 1>the White House to make this happen. Of course, I'm

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<v Speaker 1>not a political scientist. I'm an economist, and I do

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<v Speaker 1>the best that I can do to put the economics

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<v Speaker 1>out there and then see how far the politicians can

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<v Speaker 1>take it. I think it's very apparent that this idea

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<v Speaker 1>has captured the imagination not only of a number of

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<v Speaker 1>Democrats who are likely candidates in the next election, but

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<v Speaker 1>among the public at large. There have been polls that

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<v Speaker 1>find that this is the most popular program that has

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<v Speaker 1>ever been pulled, with support all over the country across

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<v Speaker 1>the political spectrum. So I don't think it's going to

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<v Speaker 1>die out. Do I think that a bill will go

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<v Speaker 1>through before the next presidential election? Probably not, But it's

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<v Speaker 1>still worthwhile to get the ideas out there. All right. Well,

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<v Speaker 1>it's certainly sparking debate in several corners of the economics profession,

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<v Speaker 1>and we're glad that you're able to come on and

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<v Speaker 1>explain it to us. So, Randy Ray, thank you very

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<v Speaker 1>much for your time. Thank you. So we just heard

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<v Speaker 1>from Randy ray that this plan isn't going to become

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<v Speaker 1>law of the land right away, probably has a long

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<v Speaker 1>way to go and is going to engender some more debate.

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<v Speaker 1>But for some more analysis, let's go to Ernie Twodsky.

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<v Speaker 1>Ernie is a policy economist and head of fiscal analysis

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<v Speaker 1>in Washington at ever core I s I and investment

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<v Speaker 1>research firm. Before that, he was a senior advisor and

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<v Speaker 1>economist at the Treasury Department during the Obama administration. Ernie,

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<v Speaker 1>thanks so much for coming on Benchmark. Thanks for having

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<v Speaker 1>me on. Guys. So, Ernie, is this the best way

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<v Speaker 1>to get to full employment? So? I think the short

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<v Speaker 1>answer is, we don't know. Um. There is limited experience

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<v Speaker 1>with job guarantees around the world. India has a sort

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<v Speaker 1>of a similar scheme to a Job's guarantee. Argentina had

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<v Speaker 1>one in the two thousands, and there have been limited

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<v Speaker 1>trial runs in specific geographies and urban areas, the most

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<v Speaker 1>prominent one being in New York City where they had

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<v Speaker 1>a a work fair program where they required you to

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<v Speaker 1>work for your local welfare check. That's why I actually

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<v Speaker 1>like Santor Corey Booker's idea to do a trial run

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<v Speaker 1>of Job's guarantee, I think that that would tell us

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<v Speaker 1>a lot. It would wade through the uncertainty and because

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<v Speaker 1>so many of the critiques of a job's guarantee are

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<v Speaker 1>really just about implementation challenges UH and the uncertainty about

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<v Speaker 1>how people would react. You know. That said I, I

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<v Speaker 1>think that a job's guarantee is just probably in my view,

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<v Speaker 1>to blunt an instrument to do what it wants to do. UM.

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<v Speaker 1>If we want to smooth macroeconomic cycles, you know, the

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<v Speaker 1>ups and downs of the economy over time, which is

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<v Speaker 1>a noble goal and an ambitious goal. You know, other

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<v Speaker 1>countries have been able, Other advanced countries have been able

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<v Speaker 1>to do that UM without using a jobs guarantee UM.

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<v Speaker 1>For example, if you look at Germany, the United Kingdom, Japan,

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<v Speaker 1>their labor force participation rates have been rising ever since

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<v Speaker 1>the Great Recession, even though you know, in in Germany

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<v Speaker 1>they had sort of a double dip slowdown over the

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<v Speaker 1>last couple of years as a result of the year

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<v Speaker 1>Zone crisis, and in the UK they had um Brexit.

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<v Speaker 1>Is they've been able to do it with UH sort

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<v Speaker 1>more of a pot pourri of different policies, things like

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<v Speaker 1>national health insurance. You know, um, Stronger wage controls and

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<v Speaker 1>wage subsidies, you know, protections particularly for women, I think,

0:15:53.080 --> 0:15:58.880
<v Speaker 1>for paid leave, stronger unemployment insurance and disability programs. Those

0:15:58.920 --> 0:16:02.040
<v Speaker 1>things I think would get us a lot of the

0:16:02.160 --> 0:16:05.920
<v Speaker 1>sort of you know, business cycle benefits of a Job's guarantee,

0:16:06.280 --> 0:16:09.200
<v Speaker 1>and they would be more universally enjoyed. The other thing

0:16:09.280 --> 0:16:10.720
<v Speaker 1>I'd say is, you know, if our goal with the

0:16:10.800 --> 0:16:16.040
<v Speaker 1>Job's Guarantee is to eliminate poverty and raise wages, then

0:16:16.480 --> 0:16:20.080
<v Speaker 1>there are probably cheaper, more cost effective ways of doing that.

0:16:20.640 --> 0:16:24.040
<v Speaker 1>There are There are certainly upsides and downsides of having

0:16:24.080 --> 0:16:27.920
<v Speaker 1>a fifteen dollar minimum wage, which is essentially which is

0:16:27.960 --> 0:16:31.880
<v Speaker 1>what a lot of jobs guarantee advocates are pushing for

0:16:32.160 --> 0:16:34.760
<v Speaker 1>through a Job's Guarantee. But if we think that that's

0:16:34.800 --> 0:16:36.520
<v Speaker 1>the right way to go, why not just raise the

0:16:36.520 --> 0:16:40.920
<v Speaker 1>minimum wage to fifteen dollars without having this very very

0:16:41.000 --> 0:16:44.800
<v Speaker 1>large fiscal costs associated with the program. Well, let's let's

0:16:44.840 --> 0:16:46.960
<v Speaker 1>talk about that for for a second. What what do

0:16:47.000 --> 0:16:49.200
<v Speaker 1>you think would be the fiscal cost of this program?

0:16:49.240 --> 0:16:53.520
<v Speaker 1>Is it feasible? Would it contribute to bond yields going

0:16:53.560 --> 0:16:56.400
<v Speaker 1>way up, which would make the program even more expensive

0:16:56.440 --> 0:16:59.560
<v Speaker 1>to pay back for taxpayers in the long run. I

0:16:59.600 --> 0:17:02.080
<v Speaker 1>think there's actually, you know, in in finance, we would

0:17:02.120 --> 0:17:04.719
<v Speaker 1>call it fat tails. That's just a that's a fancy

0:17:04.760 --> 0:17:08.000
<v Speaker 1>way of saying that there's there are two risks here, right.

0:17:08.040 --> 0:17:11.359
<v Speaker 1>There's there's a risk that the program is extremely small

0:17:11.440 --> 0:17:15.400
<v Speaker 1>and that actually far fewer people participated in it than anticipated,

0:17:15.800 --> 0:17:18.800
<v Speaker 1>in which case it wouldn't be that expensive, but it

0:17:18.880 --> 0:17:21.000
<v Speaker 1>wouldn't help the economy very much, and a lot of

0:17:21.040 --> 0:17:25.000
<v Speaker 1>the benefits that advocates tout probably wouldn't come to pass.

0:17:25.520 --> 0:17:28.159
<v Speaker 1>The other risk is on the upside, right, that lots

0:17:28.160 --> 0:17:30.959
<v Speaker 1>and lots of people participate in it um and it

0:17:31.040 --> 0:17:35.560
<v Speaker 1>ends up being much more expensive. One estimate from Mark Paul,

0:17:35.600 --> 0:17:39.680
<v Speaker 1>William Derrity, Derrick Hamilton's so their co authors who did

0:17:39.680 --> 0:17:41.919
<v Speaker 1>a version of this plan for the Center for Budget

0:17:41.920 --> 0:17:45.240
<v Speaker 1>and Policy Priorities. So they basically start from, you know,

0:17:45.320 --> 0:17:49.160
<v Speaker 1>there are eleven million people who are unemployed or underemployed

0:17:49.200 --> 0:17:52.080
<v Speaker 1>in America. Underemployed meaning that you're not getting all the

0:17:52.119 --> 0:17:54.120
<v Speaker 1>hours that you want even though you have a job.

0:17:54.720 --> 0:17:57.440
<v Speaker 1>And they assume that, I believe that they base their

0:17:57.600 --> 0:18:00.439
<v Speaker 1>the pay and their plan around the idea that workers

0:18:00.440 --> 0:18:03.359
<v Speaker 1>on a job guarantee should be above poverty for a

0:18:03.359 --> 0:18:06.360
<v Speaker 1>family of force. That translates to eleven dollars and eighty

0:18:06.400 --> 0:18:09.080
<v Speaker 1>three cents an hour um. So they calculate that that's

0:18:09.080 --> 0:18:12.879
<v Speaker 1>going to cost six billion dollars a year, which is

0:18:13.000 --> 0:18:16.399
<v Speaker 1>roughly on par with the Defense Department. But they also

0:18:16.440 --> 0:18:19.680
<v Speaker 1>say that if for some reason the job's guarantee program

0:18:19.720 --> 0:18:24.200
<v Speaker 1>ends up attracting people anybody who makes under eleven dollars

0:18:24.200 --> 0:18:26.640
<v Speaker 1>and eighty three cents an hour, now, that the cost

0:18:26.680 --> 0:18:30.600
<v Speaker 1>could swell to possibly over two trillion dollars a year.

0:18:31.000 --> 0:18:34.439
<v Speaker 1>That would be two trillion dollars right now during an

0:18:34.440 --> 0:18:38.639
<v Speaker 1>economic recovery. That is, you know, roughly, that would be

0:18:38.680 --> 0:18:41.400
<v Speaker 1>like a fifty increase in the size of how much

0:18:41.520 --> 0:18:44.359
<v Speaker 1>the federal government spends every year in the middle of

0:18:44.359 --> 0:18:47.320
<v Speaker 1>a recovery. You know, that's not that's not a countercyclical

0:18:47.359 --> 0:18:51.520
<v Speaker 1>move to address a shortcoming in aggregate demand. Right now.

0:18:51.600 --> 0:18:55.040
<v Speaker 1>That would be you know, two trillion extra dollars when

0:18:55.080 --> 0:18:57.720
<v Speaker 1>the economy is relatively good. Now, that's you know, that's

0:18:57.720 --> 0:18:59.600
<v Speaker 1>on the high end, and that's that that's sort of

0:18:59.600 --> 0:19:01.840
<v Speaker 1>an upper end range. But you know, this would be

0:19:01.880 --> 0:19:04.960
<v Speaker 1>a large program. So politically, does it have to wait

0:19:05.040 --> 0:19:08.159
<v Speaker 1>for the next recession to be viable. I think it

0:19:08.200 --> 0:19:10.840
<v Speaker 1>probably does have to wait until the next recession. I

0:19:11.040 --> 0:19:14.639
<v Speaker 1>think a job's guarantee was born out of sort of

0:19:14.680 --> 0:19:17.720
<v Speaker 1>how deep the two thousand and eight downturn was, and

0:19:17.720 --> 0:19:20.320
<v Speaker 1>and just the sheer depth of the two thousand and

0:19:20.359 --> 0:19:23.320
<v Speaker 1>eight downturn was something that not very many people had

0:19:23.320 --> 0:19:26.119
<v Speaker 1>even contemplated before two thousand and eight. It seemed like

0:19:26.160 --> 0:19:29.720
<v Speaker 1>a very low risk event. And now I think everybody's

0:19:29.760 --> 0:19:32.679
<v Speaker 1>worldview is different. And that, by the way, is you know,

0:19:32.720 --> 0:19:36.080
<v Speaker 1>even though I'm cautiously pessimistic on the economics of a

0:19:36.160 --> 0:19:39.440
<v Speaker 1>job's guarantee, I think it's asking the right question right,

0:19:39.480 --> 0:19:44.000
<v Speaker 1>which is that recessions are very damaging to people. We

0:19:44.000 --> 0:19:47.159
<v Speaker 1>we are only now within striking distance of recovering from

0:19:47.200 --> 0:19:49.360
<v Speaker 1>the two thousand and eight recession when you look at

0:19:49.400 --> 0:19:53.000
<v Speaker 1>things like employment in America. We we still haven't even

0:19:53.080 --> 0:19:56.280
<v Speaker 1>recovered from the two thousand and one recession when you

0:19:56.320 --> 0:19:59.960
<v Speaker 1>look at employment. So business cycles can be extremely damaging

0:20:00.000 --> 0:20:02.359
<v Speaker 1>to the well being of people, and and thinking about

0:20:02.440 --> 0:20:07.280
<v Speaker 1>ideas uh that could help mitigate those business cycles make

0:20:07.359 --> 0:20:12.200
<v Speaker 1>recessions less damaging. Are good ideas they're asking the right question,

0:20:12.320 --> 0:20:16.080
<v Speaker 1>and and just the fact that they're expensive. I don't

0:20:16.080 --> 0:20:18.359
<v Speaker 1>think we should be dismissive of those ideas just because

0:20:18.400 --> 0:20:21.320
<v Speaker 1>they're expensive. They are trying to be ambitious and what

0:20:21.359 --> 0:20:24.199
<v Speaker 1>they do. I think the problem here is that we

0:20:24.240 --> 0:20:27.679
<v Speaker 1>can do a lot of what a Job's Guarantee promises

0:20:27.720 --> 0:20:31.120
<v Speaker 1>to do with more targeted you know, like a potpourri

0:20:31.200 --> 0:20:34.680
<v Speaker 1>of more targeted, smaller programs, or you know, programs that

0:20:34.720 --> 0:20:38.480
<v Speaker 1>are ambitious things like national health insurance, but that would

0:20:38.520 --> 0:20:41.359
<v Speaker 1>be more broadly enjoyed. Let me ask this, is it

0:20:41.400 --> 0:20:46.399
<v Speaker 1>even possible to create a program that would have a

0:20:46.520 --> 0:20:51.159
<v Speaker 1>large bureaucracy to support say fifteen million jobs that the

0:20:51.320 --> 0:20:55.000
<v Speaker 1>proponents are talking about. I mean, you said this would

0:20:55.320 --> 0:20:58.040
<v Speaker 1>be a cost on par with the Pentagon, which is

0:20:58.080 --> 0:21:03.520
<v Speaker 1>obviously a massive, massive global apparatus. Is it even feasible

0:21:03.560 --> 0:21:06.520
<v Speaker 1>to create something new like this? I think it would

0:21:06.560 --> 0:21:10.680
<v Speaker 1>be extremely difficult logistically, and it would be even more

0:21:10.720 --> 0:21:13.280
<v Speaker 1>difficult to do well when you think about the right

0:21:13.359 --> 0:21:15.840
<v Speaker 1>to have a job and what that entails. I mean

0:21:15.880 --> 0:21:18.679
<v Speaker 1>that means that a Job's guarantee would have to come

0:21:18.760 --> 0:21:22.760
<v Speaker 1>up with jobs that were number one countercyclical, meaning that

0:21:22.920 --> 0:21:26.359
<v Speaker 1>there were jobs available and needed in the depths of

0:21:26.359 --> 0:21:29.480
<v Speaker 1>a recession, um that they would have to be scaled that,

0:21:29.520 --> 0:21:31.240
<v Speaker 1>you know, in that projects would have to be scaled

0:21:31.320 --> 0:21:35.240
<v Speaker 1>up or down depending on just how many unemployed people

0:21:35.280 --> 0:21:38.359
<v Speaker 1>were in any given community and whether or not people

0:21:38.359 --> 0:21:40.320
<v Speaker 1>showed up. I mean, remember, the whole point of a

0:21:40.400 --> 0:21:43.160
<v Speaker 1>job's guarantee is to set a sort of safety net

0:21:43.160 --> 0:21:45.560
<v Speaker 1>below you for when you're unemployed. If you find a

0:21:45.640 --> 0:21:48.359
<v Speaker 1>job the next day, um, you won't show up to

0:21:48.480 --> 0:21:52.480
<v Speaker 1>your jobs guarantee job and the projects that that local

0:21:52.520 --> 0:21:55.240
<v Speaker 1>communities choose to do that are funded under the job's

0:21:55.280 --> 0:21:58.280
<v Speaker 1>guarantee would have to be able to accommodate that. It

0:21:58.320 --> 0:22:01.679
<v Speaker 1>would have to be appropriate across geography. So you know,

0:22:01.720 --> 0:22:04.680
<v Speaker 1>you're talking about the kinds of jobs that would work

0:22:04.680 --> 0:22:08.439
<v Speaker 1>in you know, anywhere from you know, New York City

0:22:08.520 --> 0:22:12.640
<v Speaker 1>to Boise, Idaho, to a Native American reservation, and they

0:22:12.640 --> 0:22:15.360
<v Speaker 1>have to be tailored to low skill workers. So you're

0:22:15.359 --> 0:22:18.440
<v Speaker 1>gonna get unemployed people of all different skill levels, and

0:22:18.480 --> 0:22:21.720
<v Speaker 1>so you have to choose jobs that they're able to do,

0:22:21.880 --> 0:22:25.120
<v Speaker 1>and they have to be low capital intensity, because if

0:22:25.119 --> 0:22:28.080
<v Speaker 1>a recession suddenly strikes, you may not be able to

0:22:28.080 --> 0:22:31.199
<v Speaker 1>get heavy equipment to your community. Things like you know,

0:22:31.280 --> 0:22:33.000
<v Speaker 1>if you wanted to do a construction project, you may

0:22:33.040 --> 0:22:35.440
<v Speaker 1>not be able to get construction equipment to your community

0:22:35.520 --> 0:22:37.960
<v Speaker 1>very fast. And finally, they just I mean they have

0:22:38.040 --> 0:22:40.280
<v Speaker 1>to have a shared mission that's able to withstand all,

0:22:40.320 --> 0:22:43.600
<v Speaker 1>you know, the very high inflows and outflows from the

0:22:43.600 --> 0:22:47.880
<v Speaker 1>program that would inevitably arise from you know, from from

0:22:48.080 --> 0:22:51.080
<v Speaker 1>from people coming in and leaving. That's really hard to do.

0:22:51.240 --> 0:22:54.520
<v Speaker 1>You know, our experience with, for example, what New York

0:22:54.560 --> 0:22:57.320
<v Speaker 1>City did with their work fair program. Um. And you

0:22:57.359 --> 0:22:59.760
<v Speaker 1>would think of all places, you know, New York City

0:22:59.760 --> 0:23:02.879
<v Speaker 1>has a lot of resources, even during a recession, they

0:23:02.920 --> 0:23:05.280
<v Speaker 1>would have enough people I think of different skill levels

0:23:05.280 --> 0:23:08.159
<v Speaker 1>where you would expect that they would be able to

0:23:08.200 --> 0:23:10.919
<v Speaker 1>come up with lots of different jobs. What ended up

0:23:10.960 --> 0:23:13.640
<v Speaker 1>happening though with New York cities workfare program is that

0:23:14.040 --> 0:23:18.240
<v Speaker 1>people on workfare ended up doing mostly menial tasks, low

0:23:18.280 --> 0:23:22.399
<v Speaker 1>skill tasks, things like cleaning up Central Park, janitorial work,

0:23:22.640 --> 0:23:25.280
<v Speaker 1>and then in some cases some low level clerical work

0:23:25.359 --> 0:23:29.080
<v Speaker 1>as well. UM. Now, are these things valuable? Yes? Absolutely?

0:23:29.480 --> 0:23:32.640
<v Speaker 1>Do they build human capital? Do they you know, are

0:23:32.680 --> 0:23:36.640
<v Speaker 1>they going to make people more employable in the private

0:23:36.640 --> 0:23:40.639
<v Speaker 1>sector after you know, the economy recovers. I'm very skeptical

0:23:40.680 --> 0:23:44.640
<v Speaker 1>of that. Alright, well, Ernie, that is a lot to contemplate,

0:23:45.040 --> 0:23:49.720
<v Speaker 1>and when this becomes a topic in the Democratic presidential

0:23:49.880 --> 0:23:53.160
<v Speaker 1>primary debates, will be glad to have you back. Ernie

0:23:53.200 --> 0:23:55.399
<v Speaker 1>Tdsky of ever Core I s I thank you so

0:23:55.480 --> 0:23:57.920
<v Speaker 1>much for being with us on Benchmark. Thanks for having

0:23:57.920 --> 0:24:04.000
<v Speaker 1>me on Benchmark. Will be back next week. Until then,

0:24:04.080 --> 0:24:07.160
<v Speaker 1>you can find us on the Bloomberg terminal, Bloomberg dot com,

0:24:07.160 --> 0:24:12.040
<v Speaker 1>our Bloomberg app, and podcast destinations such as Apple Podcasts, Spotify,

0:24:12.480 --> 0:24:15.200
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<v Speaker 1>the time to rate and review the show so more

0:24:18.040 --> 0:24:20.720
<v Speaker 1>listeners can find us. You can also check us out

0:24:20.760 --> 0:24:25.200
<v Speaker 1>on Twitter. Follow me at at Scott Landman Dan You're

0:24:25.240 --> 0:24:29.840
<v Speaker 1>at moss Underscore ECOD The Levy Institute, where Randy Ray

0:24:29.960 --> 0:24:32.639
<v Speaker 1>is a scholar is at at L E B Y

0:24:32.800 --> 0:24:36.320
<v Speaker 1>E c O N and Ernie Tedesky is at E

0:24:36.640 --> 0:24:39.359
<v Speaker 1>R N I E T E D E s c

0:24:39.840 --> 0:24:43.280
<v Speaker 1>h I. Benchmark is produced by Topher Foreheads. The head

0:24:43.280 --> 0:24:46.879
<v Speaker 1>of Bloomberg Podcasts is Francesca Levy. Thanks for listening. To

0:24:46.960 --> 0:24:47.720
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