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The Inflation Reduction Act’s failure to garner votes for Democrats has generated significant handwringing in political circles. Although targeted toward benefiting red states, the IRA failed to produce meaningful impact before the 2024 presidential election. Voters presumably care about one type of spending—the type that results in an immediate reward. Delayed gratification through subsidizing the conversion of coal-powered energy towards cleaner technologies, for example, cannot muster a political groundswell. Many policies can appeal to voters on different levels, but one surefire solution is to give the voter a good-paying job.

Matthew Zeitlin has weighed in on how the political theory undergirding the IRA broke down, and Brian Callaci noted that “centrist Democrats jettisoned the stuff that was would have kicked in immediately, been visible to public.” In my opinion, the process of converting government spending authorized by the IRA into jobs takes too long. That’s because government agencies must contract with private entities pursuant to onerous rules (out of an aBuNdAnCe of caution). And upon securing their contracts, contractors must solicit job applicants, and finally hire. The government could cut out the middleman by employing the workforce directly, as it did in the highly successful New Deal programs, the Civilian Conservation Corps, and the Works Progress Administration (WPA).

Per the Biden White House, in the first two years since passage of the IRA, clean energy projects created a meager 330,000 jobs. That’s hardly enough votes to swing an election. An analysis by the Political Economy Research Institute at the University of Massachusetts Amherst estimated that, before it was pared by the Trump administration, the IRA’s climate, energy, and environmental investments would create more than 9 million jobs over the next decade. The problem from a political perspective is that jobs created under the next administration don’t count for much, and perversely could benefit your political opponent.

It’s the Jobs, Stupid

In light of DOGE’s wicked winnowing of the federal workforce in the name of “efficiency,” the lodestar for the next Democratic campaign should be the immediate replacement of lost government jobs and the creation of new government jobs, not government spending. A spending program is just a clumsy vehicle for job creation. Aside from garnering votes, a jobs program would build human capital for workers to deploy in their future work in private or public sector. A jobs program critically would shift power balance in labor market towards workers, allowing workers to capture a larger wage share.

The U.S. economy creates jobs, but not all jobs are equal. Many jobs do not offer a pathway towards career and income advancement. With apologies to Uber drivers, who suffer mightily under their employer’s flooding of the market with replacements, we would never dream of our children becoming independent ride-hailing operators. And the prospects for recent graduates in particular is dim. The chief economic opportunity officer at LinkedIn explained how Artificial intelligence (AI) is threatening entry-level jobs. To wit, the unemployment rate for college grads has increased to 30 percent since September 2022, compared to 18 percent for all workers.

The solution to this labor market problem, which AI has materially worsened, lies in a massive federal jobs program. Such a program would provide entry-level positions with opportunities for continued development in the public sector or advancement in the private sector—that is, the very opposite of what Elon and the tech bros tried to achieve with DOGE. The notion of finding “inefficiency” among government jobs is at best a thinly veiled attempt at demonizing government workers and setting neighbor against neighbor. Government workers fresh out of college or nearing retirement might lack the skills (for different reasons) to seamlessly transition into a new position. Should they be tossed overboard?

As even The Economist admits, much if not most government spending on basic research will lead nowhere or never be commercialized; but that doesn’t mean the investment in supporting scientists in the interim was a waste of taxpayer funding. We kept a bunch of scientists gainfully employed during the project, fine-tuning their research skills. This by itself is a worthy investment. Government-funded research is an investment in the public welfare. Hence, Trump’s attacks on universities generally (and Harvard in particular) are an attack on the public welfare.

On a personal note, I was hired by the Securities and Exchange Commission (SEC) while finishing up my dissertation. At that entry-level job, I learned how to code in SAS and, along with a colleague at the SEC, I published my first paper. I took those skills with me into the private sector, advanced as a consultant, and even sold a firm to a publicly trade consultancy. Would Elon (who ironically has nursed from the teat of government for decades) have approved of that public investment in me? Who knows. Was it a waste of taxpayer money? Certainly not based on what I’ve paid in taxes over my lifetime or in the staff that I’ve been able to keep employed. That limited government investment has paid dividends many multiples over what I earned at my first SEC job.

The Benefits of a Jobs Program Would Be Significant

Public sector workers account for roughly 15 percent of all employment in the United States. By contrast, the comparable share is 30 percent in Norway. Citing work from the CBO, Gregory Acs of the Urban Institute explains that a WPA-style jobs program would create 6.5 million publicly funded jobs. He notes that the WPA was up and running in just four months, and only six months after its creation, the WPA employed about 2.7 million Americans. A 2018 paper by the Center on Budget Priorities called for the provision of universal job coverage for all adult Americans, including health insurance for all full-time workers in the program. Among the benefits of such a plan would be (1) the elimination of involuntary unemployment, (2) the establishment of a “de facto floor in the labor market, greatly increasing the bargaining position of workers throughout the economy,” and (3) increased employment, and therefore expenditures and tax revenues for local and state governments. 

Several studies have documented the benefits from public sector employment, in terms of their effects on wages and employment.

An alternative to a federal job is a federal wage subsidy, such as the earned income tax credit, in which the government gives a tax break to workers whose incomes are below a certain threshold. A recent paper by Maxime Gravoueille (2025) finds that local labor markets in France more exposed to an increase in wage subsidies realized faster growth in hours worked and slower growth in average hourly wages. Unlike a federal job (or job offer), a wage subsidy cannot alter the bargaining position of a worker vis-à-vis its employer.

Another weaker alternative to a federal job is a federal training program. Training displaces the worker’s income while she is being trained, and there is no guarantee of a job (let alone, a superior job) at the end of the training. In 2019, the Council of Economic Advisors under the first Trump administration sought to evaluate the benefits of federal training programs. It concludes that the evidence is mixed, with the “positive effects of training in the [Department of Labor’s Workforce Innovation and Opportunity Act] Adult program … only found in smaller scale, non-random studies.”

Spread the Wealth from Federal Jobs

Federal jobs have been centralized in or near Washington DC. That’s great for DC-area homeowners (like myself), but there is no reason to concentrate the jobs and associated benefits here. Better to spread the jobs across the country, so that each region can benefit from the federal jobs program. By maintaining a parochial presence, the federal government can engender a broader realization of what it can contribute and effectively rebut the mindless “starve the beast” echo chamber. Claiming that the federal government doesn’t understand local issues becomes far less convincing when one’s neighbors work for the Bureau of Land Management or the Census Bureau.

Imagine what would happen to wages if there were a massive new employer in every region of the country. Recent grads could be hired directly out of school, acquire on-the-job skills (e.g., programming) and experience, and then enjoy the option of staying in the federal job or transitioning to the private sector with a job in hand. Such optionality would profoundly shift the power balance towards workers, as private-sector employers would be forced to share a larger portion of the worker’s marginal revenue product, driving up the labor share. In the absence of government job guarantee, a worker’s best outside option is often welfare or Uber.

Pure self-interest motivates Elon and other tech bros’ desire to defund the government generally and federal jobs in particular. These large employers want to a desperate workforce that they can exploit to “drive shareholder value”. Competing against the government for skilled programmers or scientists cuts into the tech bros’ profits. In response to massive spending cuts at research universities, The Economist reports that the number of applications for overseas jobs from American scientists in the first three months of 2025 increased by a third compared to the comparable period in 2024. The lack of outside options for these scientists, or the prohibitive transfer costs of taking an overseas position, means they would be more willing to take a wage cut at a private sector employer.

Not convinced? Remember the time before antitrust litigation forced the NCAA to loosen its collusive grip on athlete labor and implement the transfer portal. Unsurprisingly, very few athletes sought to evade the restriction to play overseas directly out of high school. Doing so entailed significant costs for younger athletes, costs that time and family considerations only amplify for more experienced workers. The removal of that restraint has now allowed competition to flourish and labor to benefit. Of course, this exact sort of competition casts a pall of fear over “shareholder value” crowd, aghast at the prospect of having to pay workers a fair wage. After all, just over a decade ago, the Silicon Valley tech giants settled the In Re High Tech no-poach litigation, which accused them of agreeing not to compete for each other’s workers.

In summary, a federal jobs program would generate enormous social, political and economic benefits. A federal worker is more likely to vote for the party responsible for creating her job. The Democrats’ notion of getting voters excited about clean energy was a pipe dream. Democrats can pursue policies that support the environment, but that issue isn’t sufficiently potent to drive votes. It’s time to shift messages from government spending to government jobs.

College athletics are most definitely changing. For more than a century, the NCAA has maintained absolute control over the athletes’ labor market and restricted their pay to only a scholarship. But it appears that soon athletes will be paid a share of the revenue that college sports generate. This means that the expense report of each athletic department around the nation will soon include a new entry: Wages Expense—Athletes

So, where will the money come from to meet this expense?

It is important to emphasize right now that athletic departments do not currently have money to pay athletes a wage. Colleges and universities are non-profit organizations. This means, as the name obviously implies, there are no profits. Whatever money is brought into the organization is spent on the mission of the organization (or whatever the decision-makers decide is the mission). There is no entity like owners in professional sports to claim a profit, and therefore no profit technically exists.

So, when you hear someone say “college sports aren’t profitable,” you shouldn’t be surprised. Non-profits don’t have profits. Really, this shouldn’t be that hard to understand!

All of this means that right now there is no money to meet a new expense. Whatever money the schools have earned from college sports in the past has been spent. For wages to be paid to athletes, different spending choices will have to be made.

Many athletic directors have made it clear what different choices they would like to make. In a recent article by Chase Goodbread in USA Today, athletic directors indicated they would like to cut sports played by men and women that don’t currently generate the revenue we see in football and men’s college basketball. In other words, if football players or men’s basketball players need to be paid more, schools can find that money by cutting women’s sports or men’s Olympic sports that don’t involve bouncing a basketball.

Goodbread noted that athletic directors seemed less willing to focus on a more obvious solution:

Power Four athletic directors who’ve been outspoken about revenue sharing threatening the subsidy of non-revenue sports haven’t been so quick to discuss the money that could be saved by curbing the spiraling cost of coaches’ salaries…

Although athletic directors may not want to talk about it, it does seem rather obvious that if players are going to get paid more, it is the coaches who should be getting less.

Let’s talk about the pay of football coaches in the professional and college ranks. According to Front Office Sports, the average pay of the twenty highest paid NFL head coaches is $8.98 million. And the average pay of the twenty highest paid NCAA football head coaches (again, according to Front Office Sports) is $8.99 million.

This result should strike everyone as very odd. At least, it is odd if we think about how women are paid in sports. This summer Nefertiti Walker and I published a book on women’s sports called Slaying the Trolls.  In this book we discuss the pay of Dawn Staley. In her career coaching women’s basketball, Staley has led the University of South Carolina to three national titles. She has also coached Team USA to both a world championship and an Olympic gold medal.

In 2022, South Carolina signed Staley to a new seven-year contract that will pay her on average $3.2 million per year. As we note in Slaying the Trolls, this amount matched what Frank Martin was paid by South Carolina to coach its men’s basketball team in 2020-21. Martin was fired in 2021 after ten years where he never came close to winning any titles anywhere. As Nef Walker and I note, Staley works very hard to be paid as well as a mediocre man!

Of course, we know why Staley’s pay doesn’t seem to reflect how much better she is at her job. The revenues in women’s college basketball simply don’t match the revenues in men’s college basketball. And since revenue dictates pay… well, there is nothing anyone can do.

Right?

Apparently in the world of football, this story is very, very wrong. Revenues for the NFL and college football are most definitely not the same. According to Forbes, the 32 teams in the NFL in 2023 averaged $581 million in revenue. The average revenue of the top 32 college football program, by contrast, as reported to the U.S. Department of Education, was only $100 million. 

So, an average NFL team has more than five times the revenue of the average college football team. But the top head coaches get paid the same in both places. How is that possible? Why don’t the rules that people apply to women also apply to men coaching football?

The highest paid people employed by the NFL are the players. Dan Campbell might be an amazing coach for the Detroit Lions. But if Jared Goff (the team’s $53 million starting quarterback) were replaced by Nate Sudfeld (one of the team’s back-up quarterbacks), Campbell would not look like a great coach anymore. Consequently, the Lions are never going to make Campbell their highest paid employee.

It’s a different story in college football. Once again, the NCAA has historically restricted the labor market for players. It has been a different story, though, for the coaches. For a century people been okay with schools monopsonistically exploiting athletes. But coaches have always been treated like they were in a free labor market.

That free labor market, though, was impacted by the exploitation of the athletes. Because athletes weren’t getting cash, there was always a much bigger pile of cash for the coaches. And that meant there has been enough cash for colleges to pay their football coaches like they were NFL coaches. To be clear, the revenues in college never justified those huge paychecks for the coaches. So, the coaches didn’t really “earn” this money.

Yet that never mattered. As we note in Slaying the Trolls, when it comes to sports, men really love men. And in college sports, because the players couldn’t be paid cash, the football coaches have historically been shown a great deal of love by athletic directors (who tend to be men!).

But now it should be a different story. Now that players can be paid, a school like Clemson University should be making very different choices. In 2022 (the latest year we have data), Clemson reported football revenues of $74 million. The same school paid Dabo Swinney, its head football coach, $11.5 million. Going forward, Clemson shouldn’t be giving 16 percent of its revenue to one coach. This is because Clemson will soon discover that Swinney isn’t really that great of a coach if he doesn’t have the very best players. And like the NFL has learned, those “very best” players really are worth more to the school than the head coach.

One suspects that highly paid football coaches will object to this story. In fact, Mike Gundy recently asked his players to stop asking for more money now that fall practices have started. But despite Gundy’s objections, the players will keep asking for more money. And that money should eventually come from the coaches.

The revenues from college football simply don’t justify the salaries currently paid to the head football coaches. So, when it comes time to add that wage expense for players, athletic directors should start looking at the pay of their coaches. And if the coaches say they want to keep getting paid like they are NFL coaches, schools should tell them to actually go work for the NFL.

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