Against any tendency for wages to ratchet upward must be measured the fact that program employment will maintain and possibly enhance the skills and work habits of workers temporarily unneeded in the private sector. The somewhat higher cost to the private sector of hiring workers away from the program relative to the cost of hiring unemployed workers in the absence of the program is partially offset by the higher productivity of workers who have been continuously employed, thereby reducing pressure on prices. Costs will be reduced further by the elimination of the need for experience-rated unemployment insurance taxes. By and large, even the one-time upward adjustment of wages and prices is likely to be quite small. The costs of unemployment include the loss of output that unemployed workers could have produced and the burden of paying for the income support and services the jobless receive.
Unemployment breeds racial and gender intolerance.
It engenders resistance to organizational flexibility and promotes technical conservatism among current workers because of their fear of downsizing and joblessness. A public service employment program preserves worker skills and productivity and provides valuable public services. It will be relatively inexpensive and may even pay for itself. A public service employment solution can provide full employment with price stability and labor market flexibility. It preserves worker skills and productivity and provides valuable public services.