In my last post, I discussed reallocating funds to a portion of the American Jobs Act which could create four million entry level jobs for persons on welfare or extended unemployment benefits at a cost of less than $40 billion dollars, less than 10 percent of the $447 billion dollars initially proposed by the President for a program that would create 1.9 million jobs. Such an impactful program at such a modest cost is possible for two reasons. First, this proposal is to create entry level, minimum wage jobs. Second, this proposal leverages federal funds already being spent for welfare (TANF) or for extended unemployment benefits. As a result, the additional cost of creating a job is quite small, because much, if not all, of what will become the wage portion of the person's earnings is already being provided by one of two federally funded programs: TANF or extended unemployment benefits.
A program of this type was proven to be successful in Los Angeles last year where 13,000 jobs were created in the public, private, and non-profit sectors. Perhaps of equal significant is the fact that the Los Angeles County program was spearheaded by a Republican, Don Knabe, who clearly saw the value of providing jobs, not welfare payments, to those on the TANF program. Such a program should be a model for TANF reauthorization and for the reform of the unemployment benefits programs.
At the very least, states should be given the option of converting their unemployment benefits programs into work (and wage) programs during periods of persistent, high unemployment. Rather than following the Georgia model of placing persons on unemployment into "jobs" for which there is not pay, would it not be better to permit States to use the unemployment stipends (supplemented if necessary with federal funds from a Jobs Act) to pay a wage for performing a real job. In such a program the recipient gains the same experience as under a Georgia-type program but in a manner much more consistent with our traditions of paying persons to work and our minimum wage laws which do not permit persons to work in the private sector without pay.
Many, of course, can be expected to argue that we cannot now afford such a program of job creation, even if the program's costs are relatively modest because of the leveraging of other federal programs. But we must also ask if we can afford the very real costs of no jobs program. The benefits of a job program to those employed are obvious: increased income; the reclaiming of a sense of dignity and worth; the development of work habits and skills and the earning of a recommendation so the individual can increase his or her opportunities to seek unsubsidized employment. The benefits to the communities are also real, for the community benefits from the product of the individual's work rather than bearing the costs of the individual's idleness. These costs are real and significant.
There is every likelihood that the costs of no job outweigh the cost of a job when we take into account, as we should, the fact that persistent, high unemployment increases the risk of family break-up, homelessness, domestic violence, the deterioration of mental and physical health, the need for food stamps, housing assistance and drug and alcohol abuse assistance. Just one visit to a hospital emergency room, psychiatric hospital or one prosecution and incarceration could easily cost more than multiple entry level jobs.
By contrast, creating jobs through a program modeled after the TSE program in Los Angeles County has a modest initial cost because the recipients are already receiving a federally funded stipend (under either TANF or extended unemployment benefits). More importantly, a jobs program has long term benefits by reducing the cost of such programs as those dealing with domestic violence, drug and alcohol abuse, hunger, homelessness, school truancy as well as criminal prosecution and incarceration.
Just how persistent, high unemployment is destroying the fabric of our society was forcefully illustrated by a recent conversation with a judge in the Family Law Court in Los Angeles. She told me of the tragedy of joblessness she witnesses every day in the cases before her. With no money to maintain two apartments, couples stay living in the same space, although not living together. All too often the result is domestic violence and extreme trauma and hardship for the children.
Any comprehensive cost-benefit analysis would strongly favor job creation and work over persistent unemployment, dependency and personal, family and community deterioration. For some, creating a jobs program is the "right" thing to do; for others it is the least expensive way to respond to persistent, high employment. Either way, a jobs program is the proper prescription for our nation's ills. If the devastation we see daily were caused by disease, we, as a nation, would respond immediately. The ills of persistent, high unemployment require no less urgent a response.