Honoring Dr. King’s Call for a Job Guarantee Program

http://neweconomicperspectives.org/2013/08/honoring-dr-kings-call-for-a-job-guarantee-program.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+neweconomicperspectives%2FyMfv+%28New+Economic+Perspectives%29

In this recent paper, I put together a cost estimation for a Job Guarantee (JG) program that would employ 23.4 million underemployed individuals (those who are officially unemployed, the margin­ally attached to the labor force, and the involuntary part-time workers).

I proposed a three-tier JG wage structure such that skilled workers earn $21/hour, semi-skilled workers earn $18/hour, and unskilled workers earn $15/hour. Additionally, JG workers would receive an annual benefits package of $10,000.

For the sake of argument, I assumed that the 23.4 million people in the JG program are working 40 hours/week even though not all JG work­ers will opt for full-time employment.

Adding another $50 billion to account for program material costs, and assuming that the unemployment pool is evenly divided between skilled, semi-skilled, and unskilled workers, I find that the net annual cost of the program is only $593.8 billion or 3.93 percent of GDP.