Possible Effects of Guaranteed Jobs on U.S. Payroll
A number of Democrat politicians hoping to take on Donald Trump in 2020 are beginning to float what seems like a radical idea: guaranteed jobs for every U.S. citizen and legal resident. Forget about universal healthcare and a guaranteed income, this plan goes well beyond both. Needless to say it would have a profound effect on U.S. payroll if it were ever to come to fruition.
The question many Americans may find themselves asking once the 2020 primaries begin in earnest is whether guaranteed jobs would be a good or bad thing. The answer lies in the effects such an entitlement would have on payroll, the economy, government spending, etc.
Government Payroll Expansion
Guaranteed jobs would absolutely expand government payroll, there is no doubt about that. The expansion would occur at the federal, state, and local levels. And it is not just weekly pay, either. Guaranteed jobs would also include health insurance – at a minimum. It’s quite likely that they would entertain some sort of pension or 401(k) plan as well.
The net effect on government payroll could be either good or bad. It could be good if the powers that be keep these guaranteed jobs comparable, in terms of wages and benefits, to private sector jobs of a similar nature. But if the millions of new government workers who took the jobs were unionized, the net effect would likely be bad. Steady increases in pay, benefits, and pension contributions would bankrupt government of all levels.
Private Sector Payroll Increases
Another possible effect of guaranteed jobs would be greater competition among private sector employers to recruit the top talent for their particular industries. This could mean higher wages and better benefits packages in the long run. Competition has a way of doing that.
Right now, the unemployed have little incentive to compete for jobs because they can earn a living from social assistance programs. If they were required to work, they might also be incentivized to eventually get out of the public workforce and into better paying private sector jobs. This could be good inasmuch as private sector payroll would swell while government payroll would drop proportionally.
A business payroll processor like Dallas-based BenefitMall will also enjoy growth and expansion as the size of client payrolls grow. It is assumed payroll processors would have to take on more clients to account for expanding payrolls. There is nothing wrong with that.
A Universal Entitlement Replacement
Thinking about the possibilities of guaranteed jobs simply boggles the mind. Forbes contributor Jeffrey Dorfman did a wonderful job blowing a lot of minds when he proposed in a May 1 article the potential for a guaranteed job entitlement to be a near universal replacement of other programs.
Dorfman explained that guaranteed jobs could end up being a replacement for unemployment and virtually every welfare entitlement except for Social Security and long-term disability. He went on to explain how the federal government currently spends more than $1 trillion annually on welfare programs.
He calculated that employing 11 million unemployed and disaffected people now collecting welfare at $15 an hour would reduce total spending to $450 billion. It sounds like a radical idea, but his math seems to make sense on its face. Washington number crunchers would obviously have to do a bit more analysis to figure out if what Dorfman claims is actually true. So what if it is?
Count on a guaranteed job entitlement being part of the 2020 campaign. If it ever comes to be, payroll in this country will look a lot different – for better or worse.