The self-identified socialist, Bernie Sanders, recently backed a plan that would guarantee a job to every American that would pay at least $15 per hour. The idea is also being backed by other Democrats in the U.S. Senate.
While Sanders is very far to the political left, he is not technically a full-blown socialist. When it comes down to it, he does not believe that the government should own all of the means of production. He perhaps believes this in certain sectors, such as medical care, but I don’t think he literally wants the government to own everything. Most of his schemes revolve around higher taxation, higher government spending, and more government regulation.
Libertarians can find some areas of agreement with Sanders on certain civil liberty issues and foreign policy. But even here, Sanders is woefully inconsistent. If he had actually become president, it is doubtful that the current wars and occupations would have ended with him bringing the troops home. Anyone who endorses Hillary Clinton cannot be relied upon to be anti-war in any sense.
In terms of economics though, Sanders is just a complete disaster. It wouldn’t matter much except that there are millions of people who actually listen to him and think he is on the right track with his policy proposals.
So what about this idea of a government job guarantee?
I don’t know if the Sanders plan would permit people to still work below the $15 per hour rate, or if that would be the new minimum wage. Either way, most people wouldn’t work for less than that unless they had a job they really liked. If you are making $12 per hour and you can automatically get a job making $15, then most people will make the switch unless their current employer is willing to at least match it.
Therefore, not only would the plan be expensive to pay millions (tens of millions?) to get a job, but there would be millions more who currently have a job but would leave it in order to make the higher amount. And if $15 per hour is the new minimum wage, then you would likely see employers cutting their labor force which would drive the newly unemployed into the government jobs.
If such a plan were to go in effect, would Sanders support a massive curtailment of the government welfare state? Would he support an end to direct subsidies in food, housing, and medical care? Or would he say that everyone still needs these “benefits” because that wage still isn’t adequate to live on?
If there were no significant cuts in welfare benefits, then how many additional hundreds of billions of dollars would the government (i.e., the taxpayer) have to pay each year just to support this program? It would mean significantly higher taxes for everyone and probably even higher deficits. It would be a massive misallocation of resources that would only serve to make nearly everyone poorer in the long run.
Since it is basically a socialist scheme that would seek to avoid the price system, the bureaucrats in charge would only be guessing at what kinds of jobs to create. There would be no profit and loss system to tell them whether the jobs are actually fulfilling consumer demand in any way.
Another question about this plan is what will happen to the millions of people working these government jobs. Is there any room for promotions? And what happens when some people just don’t work hard? That couldn’t possibly happen; could it?
Is the government allowed to fire employees who do not perform their given job functions? What if somebody calls in sick all of the time? What if someone shows up to “work” and just literally sits there all day and just refuses to actually do anything? Will they still get paid $15 per hour for being there?
When anyone with any sense actually sits down and starts to think about some of the details, a lot of questions arise. If you sit there and think about it long enough, you could probably come up with 100 good questions about how things will operate. Of course, those who came up with the plan and those who are enthusiastically supporting it are not using any sense. If they are, it is only to act as a demagogue and to swindle others.
For libertarians, this is an easy thing to oppose just on moral grounds alone. Since this plan would involve violating the property rights of others by using force or the threat of force, then libertarians can easily oppose it.
But aside from the moral argument, anyone with some sense and an open mind should be able to see just what a disaster a plan like this would be. It would disincentivize productivity and massively misallocate resources. We would all suffer greatly in our living standards if such a proposal were enacted.
Pretty great post. I simply stumbled upon your weblog and wanted to mention that I have truly loved surfing around your blog posts.You can find more information regarding latest govt jobs