Dissecting America Works

Like many of you, I spent the last weekend of February binge watching the latest season of House of Cards on Netflix. I have always found the show to be immensely enjoyable, largely because that even though its setting was politics, it focused on the politicians, not the actual polices.

Warning: House of Cards spoilers ahead

However, this season, policy took center stage as President Frank Underwood introduced his America Works, or AmWorks, jobs program. As the season wore on, I found myself thinking about the bill more and more, analyzing it further and further. Was I just trying to rationalize watching the entire season in less than two days? Perhaps. Was I too heavily invested in the show? Almost certainly. Putting those questions aside, however, there is a more interesting question to ask: Would AmWorks work in real life?

The very goal of the bill was perhaps the most ridiculous aspect. The stated goal was to reduce the unemployment rate to zero percent. Every American who wanted a job would get a job. While this goal may sound admirable, in reality it is pure nonsense. Some of the people who helped draft the bill must have been economists. Surely they would have told Frank that an economy with zero percent unemployment is destined to fail. Economies need some level of unemployment in order to function. Otherwise, companies could not fire incompetent workers, as there would be no replacements. Similarly, workers could not quit to find a better job as there would be no better jobs available. In essence, zero percent employment would eliminate what is known as frictional unemployment, something that economists agree is vital to a successful economy. Frictional unemployment refers to people who are in the process of transitioning between jobs. Frictional unemployment allows workers to match their skill set to a job and find the job that is the best fit for them. Overall, it leads to a workforce that is more productive because workers have jobs that are a better fit for them. A program like AmWorks would eliminate this employment and thus be detrimental to the economy.

Proponents of a bill like AmWorks would argue that those who are unemployed by choice would not sign up for AmWorks and thus frictional unemployment would remain the same. There are two issues with this view. First, the goal of the bill is zero percent unemployment, so Underwood would view any unemployment as a failure. Secondly, and more importantly, AmWorks, by its very nature, would have to eliminate frictional unemployment amongst low-paying, low-skilled jobs. Almost all AmWorks jobs would fit under the umbrella of low-skill jobs, as the amount of money that the Federal Government provides to the employer is only about $45,000. This means that there will be massive amounts of low skilled workers suddenly being employed and no low skilled workers who are unemployed, leading to massive drop in frictional unemployment.

That leads to another major problem with AmWorks: underemployment. As previously shown, the vast majority of the jobs that AmWorks would provide would be low-skilled jobs. At a time when one of the greatest employment issues is underemployment of college graduates, this plan seems counterproductive. According to the Economic Policy Institute (EPI), 16.8 percent of recent college graduates are underemployed. AmWorks does nothing to solve this problem; in fact, it actually would serve to exacerbate it.

In the show, of course, AmWorks is a massive success. In a brilliant, though legally shaky) move, Underwood takes money from the FEMA budget and gives it to the city of Washington DC after the mayor declares a state of emergency. Thousands get jobs and many in Congress start to change their minds about the bill. However, the brief glimpses that the show gives us into specific success stories do not seem to bode well for the bill as a whole. Freddy, formerly the owner of his own restaurant, is reduced to working a low-income job as a dishwasher. Freddy is in a slightly better position than he was before, but he is still struggling to make ends meet. This is hardly a ringing endorsement of AmWorks.

AmWorks appears to be built entirely on empty rhetoric, the promise of eliminating unemployment. It seems to be a noble goal, but in reality, it is both unattainable and unwise. In that sense, it really is a perfect bill for a show like House of Cards. It is a perfect encapsulation of how politicians twist facts to fit their agenda and use emotions rather than evidence to sway the American public.