Expand National Service to Keep Workers Engaged During Tough Economic Times
Two million jobless Americans have been trying to find work for at least 27 weeks. Many of these workers become trapped in a cycle of unemployment or underemployment that can mean a future of reduced wages, if they can even find a job, and an unsettling home environment for their family.
Many long-term unemployed need a path back into the workforce—one such path should be national service. In a recent report from the Center for American Progress, we proposed automatically creating new and temporary national service positions during times of high long-term unemployment, which would phase out as the economy returns to normal.
National service programs, such as AmeriCorps, pay participants a modest living allowance to address a variety of national needs in fields such as education, conservation, and affordable housing. The living allowance – along with health insurance, child care assistance, and an education award equivalent to a Pell Grant – is especially important for unemployed workers who need to support themselves and possibly their families, and may need to pursue subsequent education to strengthen their future job prospects.
Further, national service is a proven policy to reengage Americans who are down on their luck or need a second chance. Volunteering during a period of unemployment makes a worker 27 percent more likely to find a job. National service programs can also successfully engage young people with criminal records, who have some of the highest barriers to employment, as documented in a recent YouthBuild report, “Life after Lock-Up.” We know these programs can work on a massive scale: New Deal work relief programs reduced the unemployment rate from 16.9 percent to 9.9 percent in 1936 alone.
Our plan would automatically create 25,000 year-long national service positions for each tenth of a percentage point by which the long-term unemployment rate exceeds its historical average of 1 percent, with guardrails to ensure that national service isn’t expanded more rapidly than the system can support. Under this policy, for example, the United States would have established 100,000 new national service positions each year in the wake of the Great Recession, peaking at 475,000 positions in 2013. These positions would have provided the long-term unemployed a critical lifeline back into the job market at a time when many Americans were exhausting their unemployment benefits.
By tying national service funding to the long-term unemployment rate, these programs would function as an automatic fiscal stabilizer, expanding when the economy is weak and contracting when the economy is strong. Automatic stabilizers – such as food stamps and unemployment insurance – are ideal economic policies because they spend less when a booming economy is at risk of overheating, and then spend more to reduce the severity of recessions and help struggling families make ends meet.
A key element of our proposal is to design the temporary national service positions to be phased out with minimal disruption when the economy improves. Some positions would focus on project-based work that has a defined end-date, such as conservation and infrastructure tasks. Others would respond to the increased demand during recessions for foreclosure assistance, anti-hunger efforts, and other human needs.
In 2009, Congress recognized that national service should play a much larger role in American life by authorizing 250,000 AmeriCorps positions as part of the Edward M. Kennedy Serve America Act. Unfortunately, lawmakers never followed through with the necessary funding. As a first step, Congress should fully fund the Serve America Act—which would create 250,000 AmeriCorps positions regardless of economic conditions—while also laying the groundwork for a future temporary expansion.
Long-term unemployment can happen to anyone. The best predictor for whether someone will become long-term unemployed is not age, occupation, or education—it’s the date of the worker’s job loss. Workers who have the bad luck of losing their job during a recession are most likely to become long-term unemployed.
Four out of five Americans experience economic insecurity at some point during their working years, meaning these Americans experience any of the following circumstances: the person receives means-tested public assistance, has an income below 150 percent of the official poverty line, or the head of their household is unemployed. Although the government cannot eliminate bad luck, there’s no reason that temporary setbacks should cast a permanent shadow on working families.
Just as ordinary Americans cannot predict when they will face the threat of job loss and poverty, policymakers cannot predict when the next recession will hit. That is why it is critical to start planning now. When long-term unemployment spikes, national service should be there to provide more options for jobless workers.
Harry Stein is the director of fiscal policy at the Center for American Progress. Shirley Sagawa is a visiting senior fellow at the Center for American Progress and author of ‘The American Way to Change,’ which highlights ways that volunteer and national service is an important but underutilized strategy to solve problems in American communities.
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