Forget free cash, there's an even more American way to help people get ahead

Some experts say a federal jobs guarantee would be better for the economy than universal basic income.

Getty Images; iStock; Natalie Ammari/BI

• Cities and states nationwide are testing out guaranteed basic income programs, sending monthly checks to those in need.
• Some experts argue that a guaranteed jobs program would be a better solution, and more bipartisan.
• Experts say ensuring everyone can have a job has longer-lasting benefits for families, communities, and the economy.

Guaranteed basic income is all the rage right now.

From homelessness in Denver to parenting in Baltimore, over 150 programs across the US are seeking to prove that no-strings-attached payments can help families overcome a variety of economic challenges.

But a lesser-known policy could be just as good — if not better — at helping recipients support their families, secure stable housing, and pay their bills: universal basic employment.

"A job guarantee is really a public option for jobs. It's a basic job that is provided irrespective of what the state of the economy is," Pavlina Tcherneva, an economics professor at Bard College who wrote a book on the benefits of UBE, told Business Insider.

In fact, right now could be the perfect time to do it. The latest jobs report for July came in well below expectations, with the unemployment rate rising to 4.3%. While that's still low by historic standards, it could be signaling weakness in what's been a very strong job market in recent years. A jobs guarantee would be a cushion, just in case the economy goes downhill from here.

"You need health insurance even if you're not sick," Tcherneva said. "It's a safety net."

"We can implement it now when the economy is in a relatively calm state and then be ready when business conditions slow down and people are laid off," she added.

Countries including India, Argentina, and Austria have tested out small-scale guaranteed job programs. It has yet to catch on in the US, despite progressive lawmakers like Sen. Bernie Sanders and Rep. Ayanna Pressley wanting to implement the policy federally. However, the first American pilot program is set to kick off in Cleveland, and its founder, Devin Cotten, believes guaranteeing Americans jobs can win support across party lines.

"We see UBE as the bipartisan solution that has the ability to walk across the country and reach both sides of the aisle," Cotten, who has made a career leading community development task forces in Cleveland, told BI. In a "work-centric" society, "being able to subsidize people by way of work allows us to talk to both sides of the aisle and really get this collective buy-in."

Cleveland's jobs guarantee

For Cotten, ensuring jobs for any American who needs one is a no-brainer. The government pays for roads and development; "Why don't we subsidize the individual agency and prosperity for the nearly 40 million Americans living in poverty?"

With the help of experts and local Cleveland policymakers, Cotten created a UBE pilot set to begin in 2026. How it works: 100 participants chosen from a pool of applicants will be guaranteed a job paying $50,000 a year for three years. According to Federal Reserve calculations, a worker earning that salary in Cleveland wouldn't need additional public assistance.

The program will partner with public and private employers in the area and subsidize participants' wages. Cotten said the aim is to ensure the jobs are community-based and help bolster the local economy — think small businesses, nonprofits, and childcare — so that participants are more likely to gain satisfaction from the work.

"Not only will this stabilize your workforce, but you have less employee turnover, and you have less no-shows due to transportation, childcare, caring for elderly adults," Cotten said, adding that an engaged and well-paid workforce is also a more stable and effective one.

It's just a start, Cotten said, and he's hopeful it'll gain more momentum across the country. Legislators have been floating this idea for decades, going back to former President Franklin Delano Roosevelt's 1944 push to establish "the right to a useful and remunerative job in the industries or shops or farms or mines of the Nation."

Since then, a chorus of Democrats have pushed for a federal jobs guarantee including Sanders during his 2016 presidential campaign. Pressley reintroduced a resolution in February calling for a program that would ensure high-quality positions paying $25 an hour or more. But UBE hasn't yet had an Andrew Yang — a rabid advocate with a single-minded focus on rallying support for the idea.

The roadblock to a guaranteed jobs program largely boils down to unanswered questions about how much it would cost — leaving both Democrats and Republicans on the fence. Rep. Gerald Connolly, a Democrat from Virginia, told The Washington Post in 2018 that his party had to be careful when comes to the cost, or Republicans would quickly shoot down the idea. "We have to be the party of fiscal responsibility," he said.

Tcherneva said the logistics of UBE are more complicated than simply giving people checks through basic income programs, but the benefits would include fighting inflation by establishing a minimum livable wage without increasing prices elsewhere and preventing labor shortages by supplying a willing and ready workforce.

She thinks UBE is on par with Social Security as a way to shore up economic stability and that pilot programs are unnecessary.

"We didn't really pilot public education to figure out whether we wanted it," Tcherneva said.

Universal basic employment across the globe

The world's first universal job guarantee experiment kicked off in 2020 in the Austrian town of Marienthal.

Throughout the three-year program, any resident who had previously been unemployed for at least nine months could choose to opt into the program and receive guaranteed paid work of at least $1,800 a month. Participating employers received subsidies to help pay the participants.

By the end of 2023, the program had successfully created and filled 112 new jobs. The majority of participants joined the public service sector, working in areas like gardening, community restoration, and museums.

Lukas Lehner, a University of Oxford economist, and coauthor of a study measuring the program's results, told BI that the program aims to create meaningful jobs for workers and the community.

"One of the premises of the whole program was not to dig holes and fill them again," Lehner said, adding that researchers observed positive social outcomes in addition to the financial benefits, including an increased sense of inclusion, trust, and stability.

The pilot program delivered promising results: unemployment in Marienthal was "reduced massively," Lehner said, with a rise in participants' incomes by about 30%. Along with significant improvements to financial security, participants also reported improvements to their mental health and purpose in their community that come with knowing they have a meaningful and stable job.

Other countries have experimented with job guarantees over the years, including India, Argentina, and South Africa, and while they were short-lived — South Africa's program, for example, was in response to the pandemic — Tcherneva said they all show that the policy can help stabilize the local economy. Tcherneva said it's like stopping a chain reaction before it starts.

"Unemployment seems to sit at the heart of so many other challenging social problems. So if you create employment, you may be able to address them," she said.

The programs also provide a blueprint for similar initiatives in the future.

"Clearly these countries are not as rich as the United States," Tcherneva said. "They're able to offer the jobs, and administrative burdens or other common concerns don't seem to stop them from providing the needed employment."

UBE vs. UBI

When looking at the results of Austria's pilot program and its impact on Marienthal, Maximilian Kasy, a University of Oxford professor and coauthor of the study on that program, told BI that it's clear income alone isn't enough to improve people's lives.

"All these benefits that people experience in terms of their time structure and social inclusion, their sense of meaning and purpose in life, those are not driven by them just having more income. Those are really driven by them having this meaningful activity in the community that they're engaged in," Kasy said.

While many cities are testing out basic income programs, they haven't been universal and instead targeted specific groups in need like artists, new parents, low-income families, or people experiencing homelessness. Tcherneva pointed to the government stimulus checks during the pandemic as "the closest real-world experiment" to UBI, during which the financial relief was necessary, but it wasn't long-lasting.

Tcherneva calls UBE an automatic stabilizer, or a program that mitigates a sudden economic hardship — much like going on unemployment when you get laid off.

Another key element of UBE is its potential to win bipartisan support over UBI, advocates say. Republican lawmakers have introduced bills to ban basic income programs in their states, with some arguing that handing out checks with no strings attached would disincentivize work and raise taxes.

UBE could counter those criticisms by requiring participants to work for their wages — which are taxed as regular income — rather than simply getting cash each month. The benefits of doing so would be long-term, helping not only the participants but also their families and employers.

Globally, UBE is taking an increasingly strong hold in some countries. The European Commission announced 23 million euros in funding in April for guaranteed job proposals in the European Union, and France has an ongoing experiment, which began in 2011 and Parliament expanded in 2021, to establish indefinite employment for those who need it.

While it's picking up steam in other countries, though, it's up to US policymakers to guarantee jobs at a federal level.

"What we're trying to do is shift government investment from reactionary responses to proactive solutions," Cotten said. "And if we can do that by demonstrating why dignifying historically low wage jobs that are very, very critical to our community can solve that poverty issue, and also dignify people in the process."

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