Building Back Better: A Jobs-Centered Infrastructure Plan

The Congressional Budget Office (CBO) recently projected record-breaking growth in 2021, but it is premature to celebrate this rosy macroeconomic picture. In the same document, the CBO also made an alarming prediction: The U.S. labor market will not fully recover until 2024. Recent U.S. jobs reports reveal the depth of the pandemic-created unemployment crisis: 10 million fewer jobs than 10 months ago, unemployment close to double the 3.5 percent level in December 2019, and more than 20 million workers collecting unemployment insurance. The Labor Department’s January jobs report announced anemic job growth of less than 50,000, with over 800,000 Americans filing new claims for unemployment insurance.

High unemployment and labor force dropout rates could persist and spawn a repeat of the “lost decade” and unequal recovery that followed the Great Recession. Workers suffering the greatest economic harm in the current crisis include people of color, low-wage earners in the service sector, women, and individuals with lower education levels. Avoiding another jobless recovery that leaves millions of Americans unemployed must be a top priority for policymakers at every level of government.

Americans now overwhelmingly support a strong and sustained government response to the economic crisis. A representative national survey of 800 Americans conducted by the John J. Heldrich Center for Workforce Development at Rutgers University in late 2020 found that they want government intervention to solve the economic crisis. When asked to choose between the government, employers, and workers themselves, fully half of Americans hold the government primarily responsible for helping laid-off workers. This is the largest percentage who think the government has a primary obligation to help the unemployed since the Great Recession.

There is also widespread support for direct job creation among Democrats and Republicans alike. More than nine in ten respondents support government-funded infrastructure projects, and more than eight in ten support a federally funded temporary community service jobs program. Other strategies earning widespread approval include sending aid to state and local governments to avert public sector layoffs (86 percent), extending unemployment insurance payments (79 percent), and funding education and training for laid-off workers (74 percent). Eight in ten say it is very important for Democrats and Republicans to work together to strengthen the economy, yet only 6 percent say that it is very likely to happen.

The federal government must take action to avoid repeating the tragic experiences of the Great Recession era, when millions of people remained jobless for years, defaulted on loans, lost their homes, and fell into poverty. Below, we offer a set of recommendations for using job-generating infrastructure spending to advance President Biden’s plan for a more equitable and inclusive economy.

Strategies to Support Recovery through Infrastructure Jobs

In 2008, unemployment reached 10 percent and did not return to 4 percent—a common benchmark for full employment—until 2018. During the entire period, the unemployment rates of Black and Latinx Americans were nearly twice those of white Americans. Before the pandemic, the Federal Reserve bank’s Survey of Household Economics and Decisionmaking found that nearly one in four Americans had no more than $400 in savings, making it impossible to pay medical bills or repair their cars.[1] The pandemic recession made matters worse for those already struggling to afford food and housing.

Since March 2020, sharp declines in revenues and mounting expenses have led state and local governments to shed over a million workers.[2] In June 2020, Federal Reserve Board Chair Jerome Powell warned during congressional testimony that government layoffs “will hold back the economic recovery if [governments] continue to lay people off and if they continue to cut essential services.” “In fact,” he continued, “that’s kind of what happened post the global financial crisis.”[3] In February 2021, Powell was still concerned: “Given the number of people who have lost their jobs and the likelihood that some will struggle to find work in the post-pandemic economy, achieving and sustaining maximum employment will require more than supportive monetary policy.”[4]

Tax cuts, low interest rates, and regulatory reforms—the traditional post-crisis tactics deployed to boost the economy—yielded painfully slow economic growth during the Great Recession. Private sector employers will not generate enough new jobs for a rapid and equitable recovery. Without expansive government-funded jobs programs, millions will remain jobless, become long-term unemployed, or drop out of the labor force entirely. Extending unemployment insurance—a bedrock safety net for millions of workers—is a necessary but insufficient cure for the nation’s deep economic crisis. Unemployment insurance does not cover everyone, provides insufficient financial relief, and varies widely in benefit levels and duration from state to state. While the unemployment rate has recovered considerably from this spring, when it reached nearly 15 percent,[5] it is nowhere near pre-pandemic levels.

Creating new jobs and improving the quality of existing jobs must be a central goal of the nation’s economic recovery.[6] The Biden-Harris Build Back Better plan calls for robust, job-generating investments in the country’s infrastructure—upgrading roads, bridges, ports, schools, and housing.[7] In December 2020, then president-elect Biden emphasized the importance of our social and digital infrastructure, in addition to brick-and-mortar projects. He called for job-generating investments in early education and child care (ECE), our public health system, and enhanced broadband access: “We should be spending $20 billion to put broadband across the board.”[8] In the early weeks of his administration, President Biden met with a bipartisan group of senators and urged them to authorize and fund a robust infrastructure plan.[9]

Below, we highlight individual strategies and programs that can support job growth and job quality through needed infrastructure spending.

Invest in Infrastructure Jobs

1. Jobs for People and Communities Most in Need:

All job-creating investments should be structured to provide benefits to a wide range of unemployed workers. Priority in hiring should be given to the long-term unemployed and those who are most disadvantaged in the labor market, including Black and Latinx workers and the nation’s oldest and youngest workers. People who live in distressed communities, individuals impacted by the justice system, and people with disabilities should be given priority.[10]

1. Education and Training Opportunities:

Infrastructure investments should also fund training for workers at a variety of skill levels, including for entry-level jobs in the skilled trades as well as in professional fields such as public health, education, information technology, and cybersecurity. All projects should incorporate dedicated training funds that are accessible to local stakeholders and allocated to communities based on population, levels of current unemployment, and rates of long-term unemployment.

1. Fair Labor Practices and Local Hiring Initiatives:

Infrastructure investments should include project labor agreements requiring employer commitments to training, local hiring, and set-aside goals for target populations including women and Black and Latinx workers.[11]

1. Open and Transparent Bidding for Projects:

Infrastructure investments should be designed and managed by federal, state, and local governments, and delivered by a mix of public, private, and nonprofit entities including minority business accelerators.[12] Open and transparent bidding processes should reward the most cost-effective quality proposals rather than the most well-connected bidders. An inspector general within the Office of Management and Budget should track and report on projects and contract processes as they occur, rather than years later.

Create Emergency Community Service Jobs

1. The federal government should fund millions of emergency community service jobs.

Big infrastructure projects require significant capital investments—and many months, if not years, to get underway. In contrast, community service projects can begin within weeks, require minimal expenses for equipment and supplies, and address gaps in a community’s social and public health infrastructure. Well-designed community service jobs not only provide income but also build valuable skills and experience for out-of-work Americans who face long odds for returning to work. These jobs will also benefit a wide range of communities and employ workers who were hit hardest by the recession, including those without degrees or other postsecondary credentials.

1. Community Service jobs programs are the most direct, cost-effective strategy for getting Americans back to work.

A million community service jobs would cost $40 billion, if the annual compensation was capped at $40,000 per position. At this level, a full-time worker would earn nearly $20 per hour if he or she worked for an entire year. Program funds to create jobs should be allocated through block grants to state and local governments based on objective criteria such as population size, unemployment, and poverty rates.

1. Community service jobs programs have proven effective during other U.S. economic crises.

During the Great Depression, President Franklin D. Roosevelt and Congress created approximately nine million government-funded public service jobs for the unemployed, and the Works Progress Administration and the Civilian Conservation Corps were widely acknowledged as critical to the nation’s economic revival.[13] In the 1970s, community jobs programs initiated by Presidents Richard Nixon and Jimmy Carter employed almost a million people.[14]

In both cases, thousands of short-term community projects were quickly mounted in cities and towns throughout the U.S.: cleaning up parks, weatherizing homes and apartments, and assisting teachers in schools and day care centers. Workers employed by nonprofit agencies helped the homeless, poor, and people with disabilities at shelters and emergency food pantries. Independent researchers who evaluated the 1970s-era programs determined that these public service jobs delivered valuable benefits to individuals and communities facing economic hardship.[15]

Despite their effectiveness, community jobs programs fell out of favor during the 1980s, part of an ideological shift away from government intervention toward an embrace of free markets and neoliberalism. As a result, states and cities now lack an essential tool to address the impacts of recessions and long-term unemployment on their communities. They also have insufficient funds to meet critical needs for health care, child care, and environmental protection.

Federally funded jobs would not be substituted for funds that would otherwise be provided by states and cities, as most of those governments are already experiencing huge deficits in their budgets. Public opinion has shifted, and many Americans want the government to do more. A federally funded, locally administered community jobs program will employ workers and provide a boost to local governments and businesses when and where it is most needed.

Community Service Job Priorities

While states and local governments should determine priorities for community service job investments, several needs should receive special attention.

1. Public Health Corps:

The pandemic has revealed the critical need for more public health workers to track and assist people infected with the virus and to distribute vaccines. President Biden proposed creating a U.S. Public Health Jobs Corps to mobilize at least 100,000 Americans across the country, with support from trusted local organizations in communities most at risk.[16] These jobs will have long-term benefits for their communities and the nation. Building on the Health Professions Opportunity Grants program could create jobs and training funds managed by the state and local workforce agencies and postsecondary education institutions—these funds could support apprenticeships, work-based training, and education programs to increase and strengthen the essential public health workforce.

1. Early Education and Child Care Jobs:

The Biden-Harris administration has committed to creating good new jobs in the early education and child care sector. While building out the country’s care infrastructure will require significant and sustained investments, the administration can help offset startup costs by including ECE in a community service jobs program. Indeed, strengthening the country’s care infrastructure will require significant and sustained investments in the early learning workforce to ensure they are paid a living wage and have adequate training and education opportunities. The pandemic has put into sharp relief how unequal access to affordable child care exacerbates inequality, particularly for women and for frontline workers, who are disproportionately Black and Latinx. These inequities existed before the pandemic, and they will continue. By prioritizing ECE jobs in its recovery strategy and including it in a broader infrastructure investment, the administration can help communities build the social infrastructure necessary for an inclusive economy.

1. Civilian Climate Corps

President Biden has recommended a “civilian climate corps” to carry out climate-positive economic development projects, such as installing electric vehicle charging stations.[17] Climate corps members can also help vulnerable communities prepare for climate change driven disasters and mitigate the effects of more extreme weather events that cause flooding, droughts, and forest fires.

Support for Federal Government Action

Bipartisan working majorities in the House and Senate enacted unprecedented responses to the recession generated by COVID-19 in April 2020. Since then, the consensus on responding to the pandemic-driven recession has unraveled, just as it did in 2009.[18] In December 2020, Congressional leaders and the White House agreed on a $900 billion stimulus package, including direct cash payments to individuals and businesses as well as enhanced unemployment benefits, among other features.[19] While this package is welcome, much damage was caused by the delay. And the new measures offer only temporary and inadequate relief for the deep economic pain experienced by millions of American workers.

Ambitious, federally funded job creation programs are essential for building a stronger and fairer labor market. We cannot wait for the private sector to eventually create enough jobs for the Americans who need them, and there is mounting evidence that a majority of Americans and many of the nation’s business, labor, and community leaders want the federal government to create jobs for the public good. Investments in infrastructure projects and temporary community service jobs programs are supported by elected officials at the federal, state, and local levels. Working with the Biden-Harris administration, Congressional Democrats and Republicans must seize this opportunity to create jobs and restore the public’s faith in government and their elected representatives.

Endorsements

1. Individual endorsers:

• Amanda Cage, National Fund for Workforce Solutions
• Annelies Goger, Brookings Institution
• Brent Parton, New America
• Burt Barnow, Trachtenberg School of Public Policy and Public Administration at George Washington University
• Carl Van Horn, John J. Heldrich Center for Workforce Development at Rutgers University
• Christopher King, Ray Marshall Center at University of Texas at Austin’s Lyndon B. Johnson School of Public Affairs
• Clair Minson, Sandra Grace Counseling and Consulting Services, LLC
• Heath Prince, Ray Marshall Center at University of Texas at Austin’s Lyndon B. Johnson School of Public Affairs
• James C. Haynes, OIC of America
• Jane Oates, WorkingNation
• Larry Good, Corporation for a Skilled Workforce
• Mary Alice McCarthy, New America
• Martin Simon, formerly of National Governors Association
• Melissa Young, Heartland Alliance
• Michael Prebil, New America
• Robert T. Jones, Management & Training Corporation
• Stephen Crawford, George Washington Institute of Public Policy at George Washington University
• Stuart Andreason, Federal Reserve Bank of Atlanta
• Todd Greene, WorkRise, Urban Institute

Please note: Affiliations listed for individuals above are for identification purposes only. Unless the organization is listed as an endorser below, affiliations do not indicate the organization’s support for the positions outlined in this piece.

1. Organizational endorsers:

• Center for Law and Social Policy (CLASP)
• Corporation for a Skilled Workforce (CSW)
• Heartland Alliance
• John J. Heldrich Center for Workforce Development at Rutgers University
• National Fund for Workforce Solutions
• National Skills Coalition
• National Youth Employment Coalition
• Center on Education & Labor at New America (CELNA)
• OIC of America
• WorkingNation

In addition to the colleagues listed above, and many other whose work informed these recommendations, we thank Riker Pasterkiewicz, Joe Wilkes, Fabio Murgia, and Hana Hancock of New America's communications team for their invaluable support in the production of this document.

About the BETS Taskforce

The Better Employment and Training Strategies Taskforce (BETS) is a coalition of more than 40 leading practitioners and experts working to modernize the United States' outdated patchwork of workforce policies. The five BETS workgroups were convened in November 2020 to develop recommendations aimed at informing the incoming Biden-Harris administration and the 117th Congress on issues and policy options related to unemployment insurance, workforce development, job quality, youth employment, and federal jobs initiatives.

The BETS Taskforce was convened by Prof. Stephen Crawford of the George Washington Institute of Public Policy, Stuart Andreason of the Federal Reserve Bank of Atlanta, and Larry Good of Corporation for a Skilled Workforce. The above document was authored by the co-chairs of the BETS federal jobs strategy workgroup: Carl Van Horn of the John J. Heldrich Center for Workforce Development at Rutgers University and Mary Alice McCarthy of the Center on Education & Labor at New America (CELNA). Their workgroup’s final report, which provided additional recommendations for a federal jobs strategy, is available here.

Footnotes

[1] Board of Governors of the Federal Reserve System, Report on the Economic Well-Being of U.S. Households in 2018, May 2019: 2. https://www.federalreserve.gov/publications/files/2018-report-economic-well-being-us-households-201905.pdf

[2] Jim Tankersley and Emily Cochrane, “Biden Faces Challenge as Congress Drops State Aid to Secure Stimulus,” The New York Times, December 17, 2020. https://www.nytimes.com/2020/12/17/business/stimulus-state-local-aid.html

[3] Rev, “House Financial Committee Hearing Transcript on Economy with Jerome Powell,” June 17, 2020, accessed March 1, 2020. https://www.rev.com/blog/transcripts/house-financial-committee-hearing-transcript-on-economy-with-jerome-powell ; Jeanna Smialek, Alan Rappeport, and Emily Cochrane, “State and Local Budget Pain Looms Over Economy’s Future,” The New York Times, August 14, 2020. https://www.nytimes.com/2020/08/14/business/economy/state-local-budget-pain.html

[4] Jeanna Smialek, “The Fed Chair Is Worried About Getting People Back to Work,” The New York Times, Feburary 10, 2021. https://www.nytimes.com/2021/02/10/business/economy/jerome-powell-fed-employment.html

[5] Heather Long and Andrew Van Dam, “U.S. unemployment rate soars to 14.7 percent, the worst since the Depression era,” The Washington Post, May 8, 2020. https://www.washingtonpost.com/business/2020/05/08/april-2020-jobs-report/

[6] For a detailed framework of job creation and job quality recommendations, see Mary Alice McCarthy, Carl Van Horn, and Michael Prebil, Building Back Better: A National Jobs Strategy, (New America: February 18, 2021). https://www.newamerica.org/education-policy/reports/bets-job-strategy/

[7] “Build Back Better: Joe Biden’s Jobs and Economic Recovery Plan for Working Families,” accessed March 1, 2021. https://joebiden.com/build-back-better/

[8] Thomas L. Friedman, “Biden Made Sure ‘Trump Is Not Going to Be President for Four More Years,’” The New York Times, December 2, 2020. https://www.nytimes.com/2020/12/02/opinion/biden-interview-mcconnell-china-iran.html ; Liz Farmer, “Broadband Expansion and Coronavirus,” SUNY Rockefeller Institute of Government, May 8, 2020. https://rockinst.org/blog/broadband-expansion-and-coronavirus/

[9] The White House, “Remarks by President Biden Before Meeting with Senators on the Critical Need to Invest in Modern and Sustainable American Infrastructure,” February 11, 2021, accessed March 1, 2021. https://www.whitehouse.gov/briefing-room/speeches-remarks/2021/02/11/remarks-by-president-biden-before-meeting-with-senators-on-the-critical-need-to-invest-in-modern-and-sustainable-american-infrastrucutre/

[10] Timothy J. Bartik, Job Creation Policies Can Raise Local Employment Rates, Especially for Distressed Communities, (W.E. Upjohn Institute: January 20, 2021). https://research.upjohn.org/cgi/viewcontent.cgi?article=1028&context=up_policybriefs

[11] Karla Walter, Infrastructure Investment Must Create Good Jobs for All, (Center for American Progress: April 22, 2019). https://www.americanprogress.org/issues/economy/reports/2019/04/22/466754/infrastructure-investment-must-create-good-jobs/

[12] Joseph Parilla and Darrin Redus, How a new Minority Business Accelerator grant program can close the racial entrepreneurship gap, (Brookings Institution: December 9, 2020). https://www.brookings.edu/research/how-a-new-minority-business-accelerator-grant-program-can-close-the-racial-entrepreneurship-gap/

[13] John A. Garraty, Unemployment in History: Economic Thought and Public Policy (New York: HarperCollins, 1986).

[14] James T. Patterson, America’s Struggle against Poverty in the Twentieth Century (Cambridge, Mass.: Harvard University Press, 1981).

[15] Donald C. Baumer and Carl E. Van Horn, The Politics of Unemployment, (Washington, D.C.: Congressional Quarterly Press, 1985).

[16] The White House, “COVID-19: The Biden-Harris plan to beat COVID-19,” accessed March 1, 2021. https://www.whitehouse.gov/priorities/covid-19/ Executive Order 13996 of January 21, 2021 established the Public Health Job Corps. 86 FR 7197, accessed March 1, 2021. https://www.federalregister.gov/documents/2021/01/26/2021-01854/establishing-the-covid-19-pandemic-testing-board-and-ensuring-a-sustainable-public-health-workforce

[17] Michael D. Shear and Michael Crowley, “Biden Cabinet Leans Centrist, Leaving Some Liberals Frustrated,” The New York Times, published December 19, 2020, updated January 20, 2021. https://www.nytimes.com/2020/12/19/us/politics/biden-cabinet.html

[18] Jane Oates and Carl Van Horn, Can Lessons from the Great Recession Guide Policy Responses to the Pandemic-Driven Economic Crisis?, (Workforce Currents, Federal Reserve Bank of Atlanta: June 16, 2020). https://www.frbatlanta.org/cweo/workforce-currents/2020/06/16/can-lessons-from-the-great-recession-guide-policy-responses-to-the-pandemic-driven-economic-crisis.aspx.

[19] Ben Casselman and Jim Tankersley, “Stimulus Deal Provides Economic Relief, For Now,” The New York Times, published December 20, 2020, updated December 28, 2020. https://www.nytimes.com/2020/12/20/business/economy/stimulus-bill-congress.html