A $25-an-Hour Federal Job Guarantee Is Back as AI Layoff Fears Grow

A congressional resolution to guarantee every American who wants work a federally funded job paying at least $25 an hour is back on the table — and this time, AI-driven unemployment is doing the selling.

Representative Ayanna Pressley, a Massachusetts Democrat, reintroduced the federal job guarantee resolution in September, four years after first proposing it in 2021. Her plan would fund jobs locally in emergency preparedness, disaster recovery, childcare, elder care and public art projects modeled on the Works Progress Administration's Federal Art Project, with wages adjusted regularly for the rising cost of living.

The timing is no accident. Anthropic CEO Dario Amodei has warned AI could cause widespread unemployment within one to five years, hitting law, tech, finance and other white-collar professions. Bill Gates has declared humans won't be needed "for most things" within a decade. Even if those predictions flop, investors betting heavily on AI could conclude it's a bubble — a crash that itself could trigger a recession and mass job loss.

Why a job guarantee instead of UBI?

Job guarantees keep beating universal basic income in the polls. A recent global survey found more support for guaranteed work than direct cash payments, and polling of Americans by Democratic strategist David Shor shows the same pattern.

"Jobs represent so much more than income in human societies," venture capitalist Nick Hanauer said. "They represent connection and dignity and enfranchisement and participation."

Algernon Austin, director for race and economic justice at the Center for Economic and Policy Research, put it bluntly: "A job guarantee is significantly preferable to UBI because work is more than just income. When you have a job, you gain work experience and you gain skills and you gain a network."

The idea has deep roots. Article 23 of the 1948 Universal Declaration of Human Rights states: "Everyone has the right to work, to free choice of employment, to just and favourable conditions of work and to protection against unemployment." Franklin D. Roosevelt's Works Progress Administration employed millions of Americans during the Great Depression building roads, bridges, sewers and playing fields. France, India and Argentina have each launched versions of a job guarantee.

How much would it cost?

At a June Senate hearing on affordability, Republican Senator John Kennedy of Louisiana dismissed the idea as a multi-trillion-dollar impossibility. When Dr. Julie Margetta Morgan, president of the Century Foundation, told him she supported a federal job guarantee, he replied: "Do you believe in the Easter bunny?"

Economists who study these programs count differently. Max Kasy, an economics professor at Oxford who studied a recent job guarantee experiment in Austria, says the savings stack up on several fronts.

"The cost saving comes from the fact that you don't have to pay unemployment benefits, or maybe disability benefits or early retirement benefits," Kasy said. "Then people who are working pay taxes and make social insurance contributions, so that's additional revenue for the state. And then they hopefully do something that's actually useful for society."

Participants in the Austria experiment also gained measurable social and psychological benefits. Pavlina Tcherneva, an economics professor at Bard College, argues those intangibles change the math entirely.

"Providing a good job to a person is absolutely transformative," she said. Factor in the health costs of precarious and long-term unemployment, she added, and "it's not only affordable, it's an investment."

Who pays — and who's already testing it?

One new proposal would tax AI companies directly to fund the guarantee. The plan, backed by Democratic Representatives Greg Casar of Texas, Valerie Foushee of North Carolina and Sara Jacobs of California, would tax large AI firms on whichever is higher: the value of their "tokens" — data units used in AI models — or their AI product revenue. The tax rate would rise with unemployment.

"AI CEOs are openly predicting their technology could put millions of Americans out of work, and our government is doing nothing to save jobs and protect working people," Casar said in a written statement.

Meanwhile, Cleveland is running a small-scale test. The non-profit Universal Basic Employment, founded by CEO Devin Cotten, is launching a one-year pilot costing almost half a million dollars with five workers who drive vans at a transportation company. Instead of creating new jobs, the program subsidizes existing private-sector wages.

UBE targeted what it calls an autonomous wage — the pay level where people lose eligibility for most safety net benefits, just over $27 an hour in Cleveland. The drivers currently earn about $15, so the pilot splits the $27 with employers: workers get a sizable raise, and the company saves money.

The program doesn't replace housing vouchers or other assistance, Cotten said. But wages, unlike siloed benefits, let workers build credit, qualify for mortgages and keep dollars circulating in poor neighborhoods. And he thinks the framing can travel across party lines.

"Work is a shared value across political lines," Cotten said. "I think crafting a solution based on work allows us to be a bipartisan solution."

With AI executives themselves forecasting layoffs, the question for the next Congress may not be whether a job guarantee gets a hearing — but which version reaches the floor first.