Tremendous Loss Demands Tremendous Action
Why we Must Repeat History by Taxing Wall Street and Creating a Federal Jobs Guarantee
By Zach Brown
The COVID-19 pandemic has rocked America to its core. Over 160,000 people have died in the U.S. and the nation is still suffering unemployment rates higher than the Great Recession. Alarmingly, the impact of this economic crisis could become even more grim when we consider that millions of these jobs will never return. This tremendous loss demands tremendous action.
Recently, Representatives Bonnie Watson Coleman (D-N.J) and Ilhan Omar (D-Minn.) answered this decisive call to address the county’s unemployment crisis head on by introducing the Workforce Promotion and Access Act. Hearkening back to the WPA of the New Deal era, this transformative bill authorizes the creation of a federal job guarantee program, providing three-year job creation grants to localities where unemployment is greater than 10% or double the national unemployment rate. Most importantly, this bill understands that it’s not just important for Americans to have a job, but a job that fully meets the crucial moment we find ourselves in. Every job created by the new guarantee program would pay at least $15 per hour and would be required to provide sufficient healthcare as well as paid leave for family, illness, and national emergencies such as COVID-19.
In the same way COVID-19 has exposed the shortcomings of allowing the private sector to have a stranglehold over the provision of health insurance, we should similarly understand that our government needs to take on a much larger role in the advancement of the job market. After all, aren’t legislators supposed to have our backs?
The Workforce Promotion and Access Act becomes even more promising when considering its proposed funding model. In terms of funding, the bill implements a tax of .1 percent on Wall Street financial transactions. This Wall Street Tax (known globally as a financial transaction tax or FTT) would be applied to every trade of stocks, bonds and derivatives. The money generated by such a small tax adds up to a lot, as the Congressional Budget Office has already estimated that this tax would increase government revenues by $777 billion over ten years. However, even apart from the much-needed revenue that could be generated, implementing a financial transaction tax would have other benefits as well! For example, high frequency stock traders would pay the bulk of the new tax, and therefore likely reduce the amount of speculative stock trading that holds no real economic value or benefit to the economy.
Now you’ve probably seen your fair share of government leaders, political analysts, and journalists draw parallels between the economic impacts of the Great Depression and our current COVID-19 crisis. So why don’t we also start drawing inspiration from how our federal government pulled ourselves out of that historic mess in the 1930s? Notably, the United States already has a history with the transaction tax dating back to 1914—a tax congress almost doubled in 1932 to address the dire economic challenges presented by the Great Depression. It’s time for our nation to similarly rise to the occasion, don’t you agree?
America wouldn’t be going it alone in this progressive push, as the movement for FTTs has taken hold globally as well. Currently, around 40 countries around the world have implemented some type of FTT with support growing by the day.
Even more promisingly, in addition to the group of countries within the European Union that have been negotiating for the approval of an FTT for more than seven years—the push for an EU-wide FTT is heating up with Germany hoping to use its current six month term as President of the European Union to finally implement an FTT in the aftermath of the COVID-19 crisis. On July 21, 2020, the European Union passed a 750 billion euro (about $858 billion) recovery fund to address the economic harm caused by the coronavirus pandemic— noting that a Financial transaction tax may be used to raise much needed revenue.
While the world is reckoning with the effects of the current pandemic in their own way, it has provided every nation a time for reflection. For our country, moving forward toward more economic justice can also mean looking backward. By passing the Workforce Promotion and Access Act, taxing Wall Street transactions, and providing people with jobs when they truly need them most, our nation would be tried and true methods from our nation’s history to respond to the crisis in the present and improve our stability for the future.