Public service jobs
The fourth component of the American Jobs Plan is to create jobs directly by putting unemployed people to work in jobs that will benefit their communities. If the private sector can’t put people back to work, then the public sector must. Twice in the past during times of high unemployment, the United States successfully turned to large-scale programs of direct job creation. We can build on those successes to increase employment and household income in the communities most severely affected by the economic downturn. In doing so, we can reduce the need for unemployment compensation and health coverage for the unemployed while improving health, housing, education, job readiness, transportation, and public infrastructure.
With a goal of putting one million people back to work, the program should be funded at $40 billion per year for three years, with funding allocated to local governments and states according to the Community Development Block Grant (CDBG) formula. The CDBG formula targets communities based on levels of short-term and long-term economic distress, as reflected in measures such as poverty, population decline, and age of housing stock. The formula could be improved with measures of unemployment and long-term unemployment, but to speed startup the first year could use the existing formula.
The U.S. Department of Labor should allocate funds and oversee the program at the federal level. Projects would be selected for funding by the highest local elected official based on the ability of the project to provide immediate employment to community residents, its benefit to the community, and the management capacity of the applicant.
Local governments would design public sector programs or select projects proposed by nonprofit organizations and public-private partnerships that can quickly employ residents of the targeted communities while delivering a needed service.
During the first six to nine months, the program would fund fast-track jobs. Projects would be limited to a discrete list of activities in order to allow for quick implementation and large-scale employment. This fast-track authority should be carefully defined to prevent abuses. It should be limited to four areas that reflect national priorities and demonstrate a high potential impact for aggregate job creation: neighborhood/community improvement, child health and development, access to public services, and public safety.
Fast-track jobs might include, for example:
- cleaning up of abandoned and vacant properties to alleviate blight in distressed and foreclosure-affected neighborhoods;
- staffing emergency food programs to reduce hunger and promote family stability;
- working in Head Start, child care, and other early childhood education programs to promote school readiness and early literacy;
- renovating and maintaining parks, playgrounds, and other public spaces.
After nine months, the program would move into the full implementation phase, and projects would be identified based on a planning process that would involve community input. Priority for funding under the longer-term phase would be given to employment projects that:
- integrate education and job skills training, including basic skills instruction and secondary education services;
- coordinate to the maximum extent feasible with pre-apprenticeship and apprenticeship programs;
- provide jobs in sectors where job growth is most likely and in which career ladders exist to maximize opportunities for long-term, sustainable employment for individuals after program participation.
Jobs would be made available broadly to the unemployed, but local governments would be permitted to target the program to those most in need, such as those unemployed for more than six months or people residing in a high-poverty community.
It is critically important that the jobs created be new jobs that add to total employment and not substitutes for jobs currently held by public employees. Experience shows that local governments will be tempted to replace employees paid by local taxpayers with employees paid with federal funds. To prevent this, there must be strict rules against substitution, coupled with strong enforcement of the rules; and federal funds for these jobs should be accompanied by the state and local fiscal relief proposed as part of this plan.
To ensure the maximum job creation, 80% of funding for each project must be spent on wages, benefits, and support services (such as child care) for individuals employed. To ensure that the jobs do not undermine local labor standards, the projects must pay prevailing wages and benefits.
During the Great Depression, public job programs employed millions of people and left a legacy of improvements in the national parks and forests, more than 100,000 miles of new roads, 35,000 public buildings, urban art and murals, soil conservation, and many other valuable contributions to national life and prosperity. A smaller program in the 1970s employed 750,000 people at its peak, gave on-the-job training that boosted the long-term income of hundreds of thousands of young people and urban residents, and performed valuable services in thousands of communities.
We know from those experiences that a large-scale jobs program can be geared up quickly and help put a million of our citizens back to work in jobs that will improve their communities and contribute to shared prosperity.
Policy recommendation
We recommend that the federal government spend $40 billion per year over the next three years to directly create jobs that put unemployed Americans back to work serving their communities.
