Reinstate the Draft

President Obama sports an ambitious agenda that includes restarting the economy, fixing unemployment, rebuilding infrastructure, improving government efficiency/accountability, all while playing nursemaid to the regeneration of individual civic responsibility. There is one stone that could be used to kill all of these birds simultaneously. Reinstate the draft.

A 21st century “draft” would go beyond military service and resemble the service obligations in place throughout Europe. Even though the last draft notices were mailed out by the Department of Defense in 1973, male Americans from the ages of 18-25 are required to register for the selective service draft in the event that they may be called up to serve in the military. Co-opting that process for a broader purpose, the federal government could create a program that requires all American citizens to provide 24 months of civil service by their 25th birthday.

Projects

One of President Obama’s favorite tag lines is the “shovel-ready project”, referring to a project that lacks only money and manpower. These programs evoke the spirit of the Civilian Conservation Corps, (CCC) which employed low-skilled workers in the construction of national parks and forest management. In today’s world, one can imagine a whole host of projects that could receive these workers. Existing governmental organizations like the military, homeland security and infrastructure maintenance (DOT) could swallow millions. NGOs ranging from the United Nations to the Salvation Army could take thousands more. Other recipients could include domestic non-profits, state and local governments, schools and universities, foreign aid programs, federal research facilities and government-funded arts programs. The only requirement for eligibility would be non-profit status and the demonstrated provision of benefits to the public. Hypothetical examples would include:

· A college graduate with an economics degree working as an analyst for the Dept. of Commerce
· A high school graduate working as a firefighter for the Forest Service
· A law school graduate clerking in a state appellate court
· A vocationally-certified diesel mechanic working as a volunteer contractor for a U.S. peacekeeping force.

Employment

According to 2000 census data, roughly 1.5% of the population turns nineteen each year, requiring of educational institutions and the job market to absorb 4.5 million people. With an economy that once consistently grew faster than the rest of the world, this once wasn’t a problem. But the recent crisis highlights an alarming trend. Over the past ten years, the unemployment rate of young workers has been on an upward pace. The graph below compares unemployment levels for the 19-24 and 25-54 age groups.

The relative gap in unemployment for the two groups has increased 25% in the last ten years (going from 4% to 5%), and at the end of 2008, the nominal unemployment rate for the 19-24 age group hit 11.3%. There are many possible reasons for this, but one sobering possibility is that our school systems are failing to provide this generation of workers with the skills required by an increasingly competitive global economy, putting new entrants to the job market at a disadvantage. At the top and the bottom of the skills spectrum, opportunities seem to remain relatively stable for young workers, but in the middle, those opportunities seem to be narrowing. This is overwhelmingly hitting those that should hypothetically comprise the middle-class: high school graduates, alumni of community colleges, vocational schools and, increasingly, four year universities.

As the average educational debt burden grows (in 2008, the average loan debt for college graduates was north of $20,000, a 6% increase over last year), a widening post-graduation employment gap will drive many students into financial distress. Faced with that possibility, 18-year olds may choose to postpone or avoid college, diminishing the overall productivity of the workforce and reducing America’s global competitiveness.

A civil service draft would provide a cushion for those students, giving them a two-year period to defer their loan costs and build a financial buffer. During those two years, they would also have the opportunity to continue their training and education, making it more likely that they would find employment after completing their obligation. The resultant unemployment curve would instead look something like this:

Paying for the program

The financial cost of the civilian service program would be large, but manageable. Assuming that the government subsidized an average fully loaded salary of $35,000 per year, with 15% defrayment coming from the participating organizations, the program could be supported at a cost of 3.5% of total government spending. It is assumed that state and local governments would shoulder a portion of the costs, with federal transfers covering the rest.

The true economic costs the program would be difficult to measure, given that some “crowding out” of the private sector would undoubtedly occur. Furthermore, for high-productivity individuals, the two year obligation might destroy some private sector wealth creation. These figures also do not factor in the costs for implementing and managing such a massive program, which would involve twice the number of people as are currently serving in the military.

At the same time, the potential benefits of the program could hypothetically dwarf any costs. Marginal increases in worker productivity would payout over the life of each worker, and the improvements in physical and organizational infrastructure would reduce systemic inefficiencies that add to the economic cost structure of the country. The program could create a improved sense of personal responsibility and shared cultural identity. This could serve to reduce crime, increase civic participation and increase domestic stability. It would also help to ease the burden on our taxed military forces and stimulate a increase in foreign volunteer work, improving foreign relations and increasing global stability.

From an implementation perspective, this idea is more of a thought exercise than an actual policy suggestion. Political resistance to the idea could be insurmountable, and the sheer logistics of incorporating the structure of this program into our society would create serious cultural dislocation. Simply put, it is a bit of a wacky idea. But given the dramatic steps taken by the government in the last few months, which includes nationalizing banks and taking effective control over automotive industry planning, nothing seems that wacky anymore.