Get Ready for the Robert Reich Workfare State
"I am concerned, as I'm sure many of you are, that these jobs not simply go to high-skilled people who are already professionals or to white male construction workers."
— Robert Reich, testimony to Congress on the proposed economic stimulus, January 7
This outrageous quote made the rounds of conservative media recently and was immediately followed by strong denials from Media Matters and Reich himself. Yes, he did say that, but political opponents were quoting him out of context.
His objective, he stated, was not to prevent white men from getting jobs, but to ensure that some of the jobs created via the stimulus would also go to minorities, women, the poor, and the long-term unemployed. This would help lessen unemployment and promote spending in low-income communities.
Giving government-funded jobs to the long-term unemployed? Surely Reich couldn't be advocating workfare?
But in his January 7 testimony, that's exactly what he proposed, introducing a four-point plan that required federal, state, and local stimulus-related contracts to set aside 20% of the jobs created for the poor and long-term unemployed, and also creating a new Green Jobs Corps to put low-income and low-skilled workers to work in jobs related to energy efficiency.
These programs would also have job training components, teaching individuals how to install pipes, mix and pour cement, install solar panels, and/or even advise homeowners and businesses on how to improve energy conservation. Naturally, income assistance would be provided during training.
Yes, you read that correctly. The government is planning to hire, train, and pay the long-term unemployed to come to your house and tell you how to save energy.
Absurd? Previous comments by Obama also support the goal of a vast jobs program, including his assertions that America needs a "civilian national security force that's just as powerful, just as strong, just as well-funded [as the military]," and his repeated promises to create millions of "green-collar" jobs.
The idea that the government can provide useful jobs and training to the unemployed has broad political appeal, especially across the all-important center. There's just one problem: workfare just doesn't work.
During the Great Depression, a newly inaugurated President Franklin Roosevelt tested the theory of giving away jobs to cure unemployment with the creation of the Works Progress Administration. The WPA gave jobs to more than eight million Americans, and workers were sent across the country to build roads and bridges and schools and even put on concerts and plays.
Nevertheless, unemployment remained high until the war and America sadly discovered that public-sector growth often comes at the expense of private industry. When American business was forced to compete for both work and resources with its own government, fewer jobs were created.
The WPA also built a reputation for waste and inefficiency. Its workers had no real incentive to complete their work quickly or show any initiative or innovation, and projects were often chosen to advance political objectives rather than out of real need. The program was also an enormous drain on the treasury and the national debt skyrocketed.
But Roosevelt had an excuse: It was 1932. The situation was desperate and there was tremendous political pressure to do something for the unemployed, which were almost 25% of the population at that point. Today, we know better. Don't we?
We certainly did in 1962, when JFK was advocating broad-based tax cuts in addition to increased government spending and lower interest rates as a way to invigorate the stagnant economy. That's now the standard blueprint for getting an economy moving again, although we can and should argue over the proportion of tax cuts and government spending.
The ineffective Roosevelt jobs programs should have been the end of workfare, but like many failed policies, variations of it have been tried again and again. Mercifully, it is not often sold as an economic stimulus anymore, but as "welfare reform" or "welfare-to-work," with the goal of getting people off welfare and into the job market as quickly as possible by giving them useful training and work experience.
Yet here too workfare falls short. A 2002 study of eleven programs nationwide found that participants had very poor outcomes on average, including low levels of skills and education and minimal earnings (most averaged under $10,000 per year, five years out).
Also, the workfare programs that put the most emphasis on training and education had not only the poorest results, but were also the most expensive, often costing much more than the welfare programs they were designed to replace. The programs that were most effective were the ones that simply matched ready-to-work individuals with available jobs rather than trying to educate or motivate.
Of course, you don't have to be an economist or statistician to recognize that the idea that the government can train and find productive employment for large numbers of its citizens, especially the long-term unemployed, just isn't grounded in reality. It's a fraud that leapfrogs socialism and goes directly to communism.
Let's add it all up. Workfare doesn't stimulate the economy. It doesn't give participants new skills or increase their earning power. It doesn't lift people out of poverty. And it often costs more than welfare. What exactly is the point?
In Roosevelt's day, it was votes. Not just votes from individuals employed by the workfare programs, but also votes in Congress. WPA projects could be used to reward friendly politicians by directing funds and manpower to their districts.
In the 1990s, when Robert Reich was secretary of labor, workfare became corporate welfare. Instead of working directly for the government, low-income workers could be hired by private-sector employers in exchange for tax credits, in effect working for less than minimum wage. Of course, this helped hold down wages for other employees too.
Still, many liberals are opposed to the idea of workfare, mainly because it does require recipients to work. In their worldview, the poor are victims of the unjust free market system and shouldn't be punished or have responsibility.
Some of the more astute liberal critics also recognize that workfare poisons the labor market. When companies or government agencies have access to cheap workfare labor, there's no incentive for them to offer entry-level jobs. Unemployment increases and more people go on workfare. It becomes a never-ending cycle.
But that's where the pure political genius of the Green Jobs Corps emerges. By presenting it as a welfare-to-work program with the objective of saving the environment, it is designed to appeal to the right, political center, and the left all at once. Then during election season, politicians can boast about the number of people they moved from welfare to work and the number of solar panels they installed on people's roofs.
If you vote Democratic, maybe you'll get a solar panel too. Installation and maintenance are always free in the workfare state. That's because with more failed leftist economic policies in place, poverty and unemployment become the ultimate renewable resources.