Why Uncle Sam Can't Guarantee College Grads a Job

The government cannot make every English major’s employment dreams come true.
Bet you can't think of a bigger boondoggle than the promise of a taxpayer-financed job for every college graduate. Photographer: Patrick T. Fallon/Bloomberg

Tressie McMillan Cottom has an idea:

"Probably the single best proposal for higher education isn't a higher-education proposal at all. A federal job guarantee has moved from fringe economic proposal to mainstream consideration. A recent Rolling Stone article may be the general-awareness tipping point, but it isn't a new idea. For years there has been a steady drumbeat for a wage guarantee that would raise the floor on poverty and economic insecurity. Although you won't hear much about it from sanitized memorials, Martin Luther King Jr. advocated for a guaranteed living wage. A federal job guarantee would reconfigure the emotional and financial cost of going to college. When living-wage jobs are contracting, people are willing to pay a premium for any leg up in the job market. Choosing college out of desperation justifies rising tuitions and predatory for-profit colleges that market themselves as insurance against job insecurity.

Which all explains why a job guarantee, which is usually considered a labor policy, could also be an education policy. The majority of incoming college freshmen are going to college because they want a job -- not just any job, but a good job. They are not alone. People weigh the emotional and financial cost of college against how badly they want a good job. Everyone deserves to choose college without desperation shaping their choices. A floor beneath wages could give that freedom to more Americans. Economists Sandy Darity and Darrick Hamilton have gone further, arguing that a job guarantee, if carefully designed, could also reduce racial discrimination in the labor market. African-Americans and Hispanics at every level of educational attainment earn less than white workers. Essentially, a job guarantee would subsidize the competitive price for minority labor. It is difficult to imagine that doing anything but improving the educational returns for minority students."

As longtime readers know, I think the decline in opportunity for college graduates is a big problem. Some of you will also be aware that I have proposed a system of temporary government jobs as a substitute for unemployment benefits; it keeps people connected to the labor force and provides families some basic income, while eliminating the bad incentives to stay on benefits for as long as possible rather than getting a permanent job.

All that said, as Cottom has formulated it, this is a terrible idea. Over two million people are awarded an associate degree or higher every year in the U.S. Let's somewhat arbitrarily set the price of a "good job" for a recent graduate at $35,000 a year -- the professional school folks will want more, but the associate degree people will probably demand less, and hopefully it all comes out in the wash. Still, that's at least a $70 billion program we've got here.

Of course, only 53 percent of college grads are underemployed or unemployed. So maybe it's only a $35 billion a year program. But then, that's just the first year. Next year there will also be more than 2 million new grads facing a notso-hotso labor market. Now it's a $70 billion program again. And then a $105 billion program...assuming, of course, that we don't get more folks flooding into college when they realize that at the end of your college course, a guaranteed job is waiting for you that pays a lot more than whatever you'd otherwise be doing.

This would be great for college professors -- a profession that I take it Tressie McMillan Cottom, a Ph.D. candidate, aspires to join. But it would be a disaster for the rest of the taxpayers.

Maybe what she's saying is not that she wants an actual job guarantee, but just that she wants a big federal jobs program that will increase demand for labor. I explained four years ago why this was never on the table, and it still isn't. The federal government no longer has the ability to do fast, massive jobs projects, and even if it did, those jobs no longer require lots of people who have brawny arms and not much else in the way of skills. It certainly wouldn't work for college students. What on earth would you have them do? The whole federal workforce is only 4.5 million people. Absorbing any significant number of college grads each year would be a massive, permanent increase in federal employment. Of course, that may not sound so bad to you -- but it isn't enough for the college grads to want jobs. We must also have a million or so jobs every year that need doing.

I do think that we should provide bare-bones employment-of-last resort to people who are struggling but just can't find a job. But the government cannot make every English major's employment dreams come true.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.