Unemployment is a drain on social resources. Job loss is associated with future unemployment, long-term earnings losses, lower future job quality, declines in psychological and physical well-being, loss of self-acceptance, self-confidence, self-esteem, morale, life satisfaction, goal and meaning in life, social support, and sense of control, social withdrawal, family disruption, and lower levels of children’s attainment and well-being. When people lose their jobs, those effects ripple throughout their own lives and the lives of others.
While employment does not get the attention that indicators like education and health get in composite measures like the Human Development Index, other similar measures like the Social and Economic Rights and Freedoms Index put unemployment right beside these measures as a core social outcome.
So what would it take to end unemployment forever in America?
A policy option that some have put forth to end unemployment in the United States is a job guarantee. The basic idea behind a job guarantee is that anyone who wants a job in the United States will be able to get one employed in the public sector or through programs financed by the public sector. So anyone unemployed would be able to go to the government and find work if they wanted it.
So is this feasible? And what would this cost?
Well one way to get a handle on this is to see how many people are unemployed in the United States and what it would cost to employ them. While American Community Survey data is not available at the time of the writing of this blog post due to a federal government shutdown, we can use other sources of data to estimate unemployment in the United States.
According to Google’s reporting of data from the Bureau of Labor Statistics, unemployment has hovered between 5 and 7 million Americans since 2017, with the exception of the COVID-19 recession, when mass stay-at-home orders and mandated closing of public spaces skyrocketed the unemployed population in the United States to over 23 million. During the Great Recession, unemployment spiked to 15 million. Google also reports that the United States Census Bureau estimates the median individual income in 2023 was $39,982, or about $42,000 in 2025 dollars.
Assuming we want to provide employment at half the median income (a commonly-used threshold for the definition of poverty), that would mean providing jobs with an income of about $21,000 per person.
Under “standard” unemployment over the past few years, this would amount to about $100-150 billion in annual expenses to make unemployment voluntary in the United States. During the Great Recession, it would have risen to a little over $300 billion. Under the high-water mark of the COVID-19 recession, that number would have jumped to nearly $500 billion. That is high, but would have only represented about 20% of the $1.9 trillion American Rescue Plan that Congress passed during the COVID-19 recession to stabilize the economy.
According to the Committee for a Responsible Federal Budget, there are a few policy options that could make a policy like this revenue neutral. They estimate reducing the military by 17% of its personnel would save $129 billion per year over the next ten years. They also estimate increasing the payroll tax by 1% would raise $151 billion per year. They estimate imposing an annual wealth tax of 2 percent on all net worth above $50 million and a 3 percent wealth tax on all net worth above $1 billion would raise $308 billion per year. Ending state and local tax deductions would save $104 billion per year. Increasing the corporate tax rate to 28% would raise $103 billion per year. A 5% value-added tax would raise $291 billion per year and a 10% across-the-board tariff would raise $239 billion per year. Of course they also report a range of smaller changes that could be combined to reach the $100-150 billion range.
Of course, this program becomes more expensive if you increase the pay. Making the program a median-wage program rather than 50% of the median wage increases costs to $200-300 billion per year.
These are not easy changes to make. They also are not impossible. Enacting a job guarantee could help ameliorate some of the costs of unemployment. It also could have spillover effects depending on the sorts of jobs that would be financed. Public service and care work such as elder and child care, community health outreach, education, and food security could help build human capital and promote health. Environmental and infrastructure projects like park and habitat maintenance and restoration, weatherization, local infrastructure, and renewable energy installation could enhance our natural and built environment. Community and cultural development like public art projects, historical preservation, library and museum support, and civic technology can enhance communities and instill civic pride. Public health and resilience work like contact tracing, emergency response support, and health education can help keep communities safe and healthy.
Programs could also be scaled to community needs. If needs are particularly high for a certain type of employment, wages can be increased in that job to make them more attractive to job seekers. Economists could estimate the social benefits of different jobs and use that as a basis for subsidization of jobs that create more social value.
The program could also be created as a federal-state share to promote more local buy-in and local control. If the federal government contributed 90% of the funds and the states contributed the remainder, that could bring an infusion of cash to states while still giving states a way to take part in the program and help defray federal costs.
Fiscal multipliers could rake back some of the costs of the program. By infusing millions of jobs into the economy that were not there before, people will have money in their pockets that then will be spent on goods and services in the community. The dynamic effects could reduce the overall costs of the program. On the other hand, administrative costs will tack on a little more to the costs of the program, though not likely all that much compared to the costs of paying employees. Also worth taking into account is benefits: beneficiaries would likely be placed on Medicaid, which could cause some expense, assuming they were not on it already.
There are other ways to slice the pie to estimate different numbers for this program, but a conservative program to end unemployment in the United States forever would cost about $100-150 billion in normal years, rising to $300-500 billion in recessionary periods. It is up to policymakers whether this would be worth the cost, but it is certainly not impossible.