Newspaper article St Louis Post-Dispatch (MO)

Bernie's Job Guarantee Is the Wrong Policy for an Improving Economy

Newspaper article St Louis Post-Dispatch (MO)

Bernie's Job Guarantee Is the Wrong Policy for an Improving Economy

Article excerpt

Sen. Bernie Sanders apparently is nostalgic for the 1930s.

He is pushing for a government jobs program the likes of which this country hasn't seen since the Works Progress Administration and Civilian Conservation Corps of the New Deal era.

Those agencies filled a big need when unemployment was as high as 25 percent. They also left an admirable legacy of public works, including the majestic lodge at Pere Marquette State Park near Grafton.

Sanders and his allies, Democratic senators Cory Booker and Kirsten Gillibrand, are talking about creating programs that would hire people to work on infrastructure, education, health care, the environment and other needs.

They want the government to guarantee a $15-an-hour job, with benefits, to every American who wants one.

The first problem with his proposal is that we don't live in the 1930s. Unemployment is just 4.1 percent, and most economists don't think it can be pushed much lower without igniting inflation.

"We're not in a massive depression," says Rik Hafer, a Lindenwood University economist. "I see help-wanted signs all over the place."

Proponents argue that the unemployment rate ignores discouraged workers, who gave up looking for work because they didn't see any good opportunities. There's some truth to this, but the proportion of 25- to 54-year-olds in the labor force is only 2 percentage points below its all-time high, and it's been rising as the economy strengthens.

A $15-an-hour government program would probably draw most of its applicants from private-sector jobs that pay less. (Even if you had to quit your job and be unemployed for a few months to qualify, that would be no great barrier.)

Retailers, fast-food establishments and small manufacturers would face a turnover problem -- especially in low-cost areas like the Midwest. They could raise wages, but that might make the business unprofitable. …

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