In a new paper, EPI Director of Research Josh Bivens lays out a framework for how policymakers can and should ensure that there are enough jobs in the economy. Bivens argues that a broad portfolio of policies is needed to create enough work for Americans—including efforts to maintain aggregate demand at high enough levels to ensure macroeconomic full employment, policies and investments that spread hours across workers and communities, and a targeted “public option” for employment. Furthermore, we must ensure that new and existing jobs are good ones, through policies that correct the imbalance in power between working people and their employers.
“Policy decisions in recent decades have made it harder and harder for far too many Americans to find good jobs,” said Bivens. “Different policy decisions can fix this, but there’s no silver bullet. Instead, a serious program to create good jobs for most Americans will need to include a broad portfolio of policies, including macroeconomic management, robust public investments and regulation, and targeted programs that provide a ‘public option’ for employment.”
Bivens argues that the first and most important task for policymakers is to lock in genuine macroeconomic full employment, through fiscal, exchange rate, and monetary policies. Second, policymakers should aim to iron out labor market disparities among workers, regions, and communities with policies that help spread employment more equitability, by shortening work time and strategically deploying public investments in communities where there are still pockets of high unemployment.
Third, Bivens writes that policymakers should move towards targeted, direct public job creation to provide help to workers still suffering even after the economy reaches full employment and strategic public investments are made. A “public option” for employment would make the government an employer of last resort for job seekers who are otherwise unable to find work in the private sector or through existing public structures. However, Bivens argues, this type of direct public job creation program would not replace the need for other policies. If the public sector’s capacity to manage workers enrolled in such programs were strengthened over time, they could play a greater role in the job creation portfolio, but currently this public sector capacity is thin.
At the same time as they are trying to creating enough work, Bivens writes, policymakers should also address job quality, ensuring that all jobs offer rising wages and good benefits. This can be done only by boosting the imbalance in economic leverage and bargaining power between most workers today and their employers. Finally, policies that provide baseline economic security for those who cannot find work should be extended or created—aiding workers in times when work is scarce and protecting those who are subjected to labor market dysfunction that is beyond their control.