Never letting a crisis go to waste, Washington is reportedly weighing a federal jobs program in response to the coronavirus. President Trump, always keen to turn his dreams of an “Infrastructure Week” into reality, has wholeheartedly endorsed the idea, and House Speaker Nancy Pelosi, who had already floated a discount version of a Green New Deal to respond to the pandemic, is apparently on board.
It’s the perfect picture of what bipartisanship means today: an expensive and unnecessary solution in search of a problem.
Unlike prior economic crises, the current coronavirus crash didn’t stem from some underlying problem with the economy. Instead, it’s a result of our justifiable response to a pandemic. Both the country and the planet has made the calculated decision to shut down the economy in the hopes that the lives lost as a result of economic destruction are fewer than those that would have been had we let coronavirus cases overrun our medical system.
The country’s $2 trillion coronavirus response has revealed one significant flaw in our current economy (namely, our current $22 trillion national debt and growing deficit), but our market crashes, job losses, and GDP reduction are the consequences of, not a source of, our current panic.
Prior to the coronavirus, the economy had been in its strongest shape in generations. With unemployment at a half-century low, employers had to increase wages to bring in new workers from outside of the labor force. This tight labor market resulted in the first real wage growth in decades, disproportionately benefiting low-income workers, with most jobs going to women and unemployment plummeting to record lows for black workers. Gallup found that workers reported record confidence in their personal finances and satisfaction in their personal lives. In the midst of the longest bull market in history, the economy was still growing steadily.
And then, we shut it all down.
It was a noble cause, sure, but the Trump administration’s next goal ought to be planning on how to reopen the economy safely. There are indications that the president understands this, notably starting with mask proliferation and tiering workers to allow young and healthy ones to return to supply chains. What won’t solve this problem, however, is a federal jobs program.
A jobs program cannot solve the underlying problem plaguing our economy. The moment the government reduces or rolls back restrictions on employers, they’ll need employees to help them out. Assuming, as the administration has asserted, that our state of absolute quarantine will persist for a matter of weeks, not months, the vast majority of businesses will not be irrevocably destroyed. Many people currently idled will have jobs to take or return to.
The solution isn’t a long-term jobs guarantee. The solution is to redirect federal funds temporarily to immediate cash relief for workers and businesses. Meanwhile, the government can best help the economy by ramping up testing, treatment, and medical equipment production (including masks), because those things are what will help, so that the country can reopen sooner rather than later.
