job guarantee
Not trusting our political class is no reason to avoid introducing progressive policies
There is a consistent undercurrent against Modern Monetary Theory (MMT) that centres on whether we can trust governments. I watched the recent Netflix documentary over the weekend – American Conspiracy: The Octopus Murders – which reinforces the notion I have had for decades that there is a dark layer of elites – government, corporations, old…
A practical exercise for the reconstruction of the Left
By Carlos García Hernández
Originally published in Spanish on 1/7/23.
Definition of a State: a territory with fixed borders under a central authority with the capacity to issue national currency and to impose debts in that currency on all residents of the State.
Consequence I: the national currency takes its value from the need of citizens to settle their debts with the State.
Consequence II: before collecting the imposed debts, the State has to spend in national currency to make paying the debts possible.
Consequence III: the State gives rise to a market in which goods and services are bought and sold in exchange for the national currency in order to settle debts to the State, self-sufficiency and savings.
Consequence IV: the State can acquire on the market everything that is for sale in the national currency, since as a sovereign issuer it cannot run out of its own currency.
Consequence V: the State’s production possibilities frontier is limited by the real resources of the economy, not by the State’s financial resources in national currency.
Consequence VI: the State can increase its production possibilities frontier by importing goods and services from foreign markets.
Definition of economic policy: introduction by the State of endogenous and exogenous variables in the economic cycle.
Endogenous variables: variables introduced by the State that must be complied with by economic actors in order to participate in the national market (laws).
Exogenous variables: variables that the State allows to be decided by private actors participating in the national market during the economic cycle.
Proposals of fiat socialism:
I. Convert the following variables into endogenous variables of the economic cycle:
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- Guaranteed and permanent full employment through job guarantees based on employment buffer stocks.
- Full and prudent use of natural resources.
- Guarantee to every citizen of food, shelter, clothing, health services and education.
- Social security in the form of pensions and subsidies.
- Guarantee of decent labour standards.
II. Allow citizens to decide which variables should be endogenous or exogenous in the economic cycle by democratically deciding the extent of private sector participation in the economy.
Practical Exercise:
Based on the above, consider what economic policy should be pursued by the Left. That is, which variables should the Left incorporate into the economic cycle as endogenous variables and which variables should be considered exogenous?
***
The proposals of the Spanish Left and of the Western Left in general coincide with the proposals of fiat socialism, except on the first, and most important, point; permanent full employment guaranteed by law. The Spanish economic cycle incorporates as endogenous variables the defence of nature (unsuccessful), the guarantee of food, clothing, health services (insufficient) and education (underfunded), social security in the form of pensions and subsidies (too low) and legislation (not complied with) on labour standards. Left out of the economic cycle are the right to housing and above all the right to guaranteed work.
Why does the Western Left not guarantee access to a job? Because of their inability to understand that the level of unemployment is a political decision, just like guaranteed education or healthcare.
The definition of a State, the consequences of this definition and the definition of economic policy referred to at the beginning of this article describe what is called the monetary economy of production. In this economy, what mobilises human and material resources to create consumer goods are debts to a central power that issues the money it demands is paid in the form of taxes. Consequently, and if we consider consequence IV, the State can acquire in national currency all unemployed labour in exchange for wage labour, so that everyone who is willing and able to work has a job and a situation of permanent full employment is reached. If, in addition, full employment is achieved through job guarantees based on employment buffer stocks, and floating exchange rates and permanent 0% interest rate policies are adopted, as the modern money consensus holds, the economy can be driven towards what fiat socialism has dubbed the Lerner point, an ideal state of the economy in which both inflation and unemployment are zero.
We have just hit the last frontier of capitalism. Grudgingly, during the 20th century, the workers’ movement progressively wrested access to social rights from the jaws of exogenous variables and introduced it into the realm of the endogenous variables of the economic cycle. Margaret Thatcher and Ronald Reagan were in charge of stopping this process of emancipation. To do so, they created a myth that the Western Left has accepted. This false and invented myth is called neoliberalism.
Neoliberalism changed the definition of the state and with it the consequences of the existence of states. In the neoliberal deception, public spending no longer precedes the collection of taxes, but it is taxes that finance subsequent public spending. Thus, it is no longer the State that chooses the level of employment in the economy, but the private sector that, through its investment decisions, decides the level of unemployment. This is how mass unemployment and not permanent full employment becomes an endogenous variable of the economic cycle. This is also how neoliberalism progressively denies access to social services and gradually returns this access to the realm of exogenous variables of the economic cycle.
The reconstruction of the Left must involve destroying the false myth of neoliberalism and turning both permanent full employment and universal access to the social services proposed by fiat socialism into endogenous variables of the economic cycle. To this end, the deception of tax-financed public spending must be discarded.
The recovery of monetary sovereignty is the first step to be taken by the Spanish Left. The spending and public deficit limits imposed by the European Union and the Euro are the most advanced expression of neoliberalism. Once recovered, monetary sovereignty must turn all the social rights of socialism into endogenous variables of the economic cycle and allow the citizens to decide the size of the private sector through their democratic participation.
You cannot rebuild what does not exist.
Euro delendus est
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Should we favour a Job Guarantee over a Universal Basic Income as a means of achieving a more socially just society?
Catherine Armstrong [1], The University of York, 2023
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Introduction
The Universal Basic Income (UBI) guarantees every adult an income. The Job Guarantee (JG) provides employment to everyone willing and able to work. I argue that while both policies claim significant benefits, the JG is better able to ensure a wide distribution of opportunities for the realisation of important non-financial goods. On this basis, we should favour the JG as a means of achieving a more socially just society. Although a comprehensive argument for either policy must account for economic costs, this is beyond the scope of my discussion (however, proponents of the UBI and JG respectively have accounted for how each might be funded [2]). I also leave aside questions of political feasibility – which are themselves inevitably inextricably linked with cost – to focus on social justice.
First, some definitions. Under a UBI, all adult members of society receive an income, paid at a uniform level at regular intervals by the government. Eligibility for the UBI is not affected by a potential recipient’s wealth [3], their marital or parental status, or – most critically for my purposes – their willingness to work: it is universal. The UBI might be paid at a level below what is sufficient for subsistence (for instance, the Alaska Permanent Fund paid $3284 per person in 2022 (State of Alaska, 2021)), but I focus primarily on a UBI of at least subsistence level.
The second policy under consideration requires slightly more explanation. The JG is a public option for jobs, which would guarantee every job seeker of legal working age the offer of employment at a living wage. Its implementation would eliminate unemployment, defined according to the International Labour Organisation as joblessness on behalf of those ready, able and willing to work (Greenwood, 1999, p.3). To prevent poverty among those who fall outside this category, the JG would be complemented by other forms of targeted income support, such as generous disability and caregivers’ assistance, child benefits and a living retirement income. For caregivers who would still like to take up paid employment, the scheme would also be supplemented with universal professional childcare and after-school activities (Tcherneva, 2020, p.65-66).
Although funded by the central government, the JG is administered locally. Job centres would regularly solicit project proposals from residents, community organisations and local authorities (ibid, p.83). Across many different communities, jobs could be created by scaling up existing initiatives, as well as redefining productive work to include sometimes unprofitable but nonetheless socially valuable activities, particularly in care, local environmental enhancement and small infrastructure projects. JG employees might remove invasive plants, set up tool libraries, provide transport to appointments for the elderly or disabled, and organise various classes and programmes – among hundreds of other possibilities (ibid, p.95).
Many JG positions will also include on-the-job training, credentialing, and education to better enable employees to eventually transition to higher-paid private- or public-sector work. To ensure minimum disruption during transitions, JG jobs must be able to accommodate a flexible number of workers, and as such, would not replace but only supplement permanent public-sector jobs (in, say, emergency services or law enforcement). For instance, the more people (within reason) cleaning plastic off a local beach or helping to create a community garden, the better – but no time-sensitive service essential to society’s operation would be risked if numbers fell. In order to bid workers away from these jobs, though, firms must at least match JG wages and conditions, essentially ensuring an economy-wide living wage floor (ibid, p.45).
The UBI and JG have many benefits in common: most obviously, the ability to greatly decrease poverty. Furthermore, by guaranteeing either income or alternative employment, each would afford workers more ability to turn down low-wage or otherwise unattractive jobs. Another point in both policies’ favour concerns the ‘unemployment trap’. For many who are willing and able to work, the only options available are very low-wage jobs which might yield little or no increase over the means-tested benefits on which they currently rely. Since UBI payments would be unaffected by one’s taking up work, and the JG guarantees a decently-paid job to all who would like one, either policy would help remove this barrier to work.
Important to note here is that although the UBI and JG are not conceptually incompatible, they are usually advocated as alternative rather than complementary policies. This is partly a matter of economic cost; more relevant for my purposes is the question of necessity. I have suggested that both policies would tackle poverty, afford workers more leverage over employers and help mitigate the unemployment trap. Given these overlapping benefits, the implementation of one policy would lessen the need for the other. To decide between the two, then, we should consider whether their differentiating features – the UBI’s universality, and the JG’s direct provision of opportunities for rewarding work as well as income – can afford one policy a significant advantage over the other.
In my view, the JG has such an advantage. To argue this, I refer to Van Parijs’ (2000) justice-based argument for the UBI, which goes roughly as follows. Social justice requires that people have not just formal freedom (for instance, property rights), but the necessary means to make use of that freedom in service of their aims. The UBI, Van Parijs continues, can ‘hardly fail to advance that ideal’. I agree on both points. For many people, certain freedoms (to choose a job in one’s desired field, start a family or pursue personally enriching activities, among others) are rendered essentially theoretical by a lack of income, and a UBI would suffice to make these options real and attainable. For other individuals, though, real freedom to pursue certain aims requires not just additional personal income, but structural community-wide changes which a JG is better able to deliver than a UBI. As such, I think a JG would be able to further advance social justice, so understood.
In Section 3, I detail this argument and propose that the JG offers many individuals the opportunity to realise psychologically and socially important non-financial benefits of work. First, however, I consider and dismiss an argument that the UBI’s universality affords it significant advantages inaccessible to the JG.
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Universality and benefits
Under a UBI, everyone would receive a cash transfer, but the JG has no comparable universality. It does not itself aim to provide an income for even close to everyone: some people are employed elsewhere, but more importantly, not everyone is willing or able to work. The JG, one might argue, provides no assistance to those who fail to meet these conditions, which is made especially problematic by the significant overlap between those unable to work and those most in need of financial support.
Of course, JG advocates acknowledge the need to supplement the scheme with various government assistance programs for those who cannot work. This isn’t a simple solution, however, since such programs are themselves the subject of warranted critique. Barry (2000) describes means-tested government benefits as ‘demeaning [and] demoralising’. There is ample evidence that their recipients are socially stigmatised – in one study, 34% of claimants reported feeling either self-directed stigma or perceived stigma by others (Baumberg, 2016, p.181). Furthermore, around 55,000 people did not claim the Universal Credit to which they were entitled during the COVID-19 pandemic because of worries about how benefits recipients are perceived, with even more citing confusion as to their eligibility or inconvenience involved in the process (Butler, 2021).
JG advocates should not overlook the importance of these considerations. However, I think that three arguments can be made in response. First, at least some of the problems associated with traditional benefit schemes can be mitigated. Eligibility conditions can be made clearer, for instance, and the JG itself could employ people to help make others aware of their entitlements and assist claimants in making applications.
Secondly, it’s inaccurate to suggest that because a JG doesn’t provide income to those who do not or cannot work, it provides them no assistance. As Tcherneva points out, the JG is designed to improve the lives of non-workers as well as workers. In addition to broadly improving the communities in which everyone lives, JG employees would provide services specifically for those with disabilities, the elderly and caregivers (for instance, offering transport to medical appointments and organising specialised programs), which would disproportionately benefit non-workers (ibid, p.66).
Finally, few of its proponents suggest that a UBI could replace the existing benefits system altogether. Depending on its rate, it might be necessary to leave the system wholly intact, only subtracting the UBI amount from benefits payments (Van Parijs, 2000). Even for a UBI set at subsistence level or above, we must ask: subsistence for whom? A universal cash payment by its nature cannot be sensitive to individuals’ different needs. As Anderson (2000) points out, some people are much less able than others to convert income into opportunities – in particular, those who have or whose dependents have disabilities or special needs. Some such individuals will still require targeted income assistance even with a UBI on which many able-bodied people without dependents could live fairly comfortably. Such a UBI would undoubtedly help many people out of the benefits pool, but it would not empty it.
This is not to downplay the significant good such a reduction implies. However, a JG would also substantially reduce the number of people reliant on traditional government assistance. Those on job-seekers’ benefits would find immediate and decently-paid work with a JG. Furthermore, many people who would currently like to but do not work due to disabilities, caregiving responsibilities and mental health issues are unable to do so because of contingent factors, such as a fiercely competitive job market, discriminatory hiring practices and a lack of accommodative opportunities. Conversely, the JG is flexible to all job-seekers’ circumstances and guarantees them work which suits their abilities and needs. Ultimately, both the JG and UBI would need to be supplemented with additional income support to some extent, but both would significantly reduce the number of people reliant on it. There is no fatal argument against the JG here.
Accepting this, one might argue that the JG’s lack of universality robs it of a different but related advantage. Even if the UBI cannot eliminate the need for additional income support, perhaps it can nonetheless eliminate the associated stigma. After all, there is no longer an out-group ‘recipients of government assistance’ which can be conveniently demonised, since everyone now receives a UBI. Surely this will result in a shift in attitudes regarding those who need additional support?
This is plausible, but I think it may be easy to overstate. For one, we all currently receive government benefits in some form – universal health care (in the UK), the legal system, indispensable public goods like roads and street lighting – but knowledge of this has not prevented social stigma against those who require financial assistance such as Universal Credit. Admittedly a UBI would involve a somewhat more direct and obvious transfer of benefits, but I doubt this would entirely counteract the pervasive tendency towards stigmatisation. Secondly, although the very wealthy are technically among the recipients of the UBI, functionally speaking they will lose more than they gain from its implementation if it is funded via progressive taxes, as many proponents advocate. As such, there would be at least one segment of the population able to easily psychologically differentiate themselves from and continue to stigmatise recipients of government assistance.
To be clear, stigma is an issue of social attitude which cannot be wholly rectified by any economic policy; that the UBI would probably reduce stigma is one of its strengths. However, I think that a JG is likely to result in a similar reduction. As above, the JG prioritises work which benefits the elderly, those with disabilities, and other groups disproportionately unable to work. It frames not just the meeting of these individuals’ material needs but the enrichment of their lives as valuable work deserving of a wage and social recognition, and in doing so, instils an ethos of respect for both caregivers and care recipients. This kind of ethos is antithetical to the social attitudes which result in stigma against those in need of financial assistance, and would likely have some counteractive effect.
Ultimately, the UBI would lead to a difference in degree rather than kind, both in reducing (but not eliminating) the need for targeted benefit programs, and in reducing (but not eliminating) the stigma faced by recipients. The JG, I think, can do the same on both counts. In the face of a stalemate, I proceed to a positive argument for the JG.
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Non-monetary goods of work
The JG offers work to those who would be jobless otherwise. This is especially beneficial because unemployment is self-perpetuating: firms are often reluctant to hire those who have been unemployed for a long period. By helping people maintain technical and employability skills, the JG protects against long- as well as short-term unemployment (Tcherneva, 2020, p.29). The UBI does not offer the same.
Is this cause for concern, though? The problem with unemployment, one might argue, is that it reduces income, and the UBI guarantees that. But this would be an oversimplification. Jobs can – and, many argue, should – provide workers with more than money. Gheaus and Herzog (2016, p.70-2) argue that justice is concerned with the distribution of not just income but also opportunities to make a social contribution, find community, attain some form of excellence, and receive social recognition. The authors call the foregoing the ‘non-monetary goods of work’: they cannot be bought, and their status as ‘goods’ is justified by significant evidence that they are widely valued by workers. Furthermore, while possible (at least in principle) to attain these goods in many different domains of life, work is a privileged context for their realisation.
This latter point is, I think, especially clear with regard to social contribution. As the authors point out, the workplace is the paradigmatic setting for ‘social encounters aimed at producing utility’ (ibid, p.76). While much socially contributory work is unpaid (consider childcare and housework), there is a natural expectation that if one is paid to do something then it should be worth doing, that something has gone array if it isn’t. Psychological research reflects this: both UK and EU28 workers who felt their jobs weren’t useful scored significantly lower on the WHO Five Well-Being Index than those who believed otherwise (Soffia et al, 2022, p.833). Furthermore, many people are willing to give up higher salaries for more meaningful work, with meaningfulness defined in terms of the work’s perceived ‘personal and social significance’ (Hu and Hirsh, 2017, p.2, emphasis added).
Relatedly, a job might be meaningful in virtue of its personal significance by encouraging a worker’s pursuit of excellence. Gheaus and Herzog understand excellence as a relation between one and one’s work, which includes both the development of one’s skills and the accomplishments resulting from their exercise (2016, p.74). For instance, a craftsman might exhibit excellence through beautiful works, as well as the artistic or technical skills necessary for their creation. Studies suggest that jobs with characteristics amenable to individuals’ attaining excellence (such as skill variety and opportunities for feedback) are associated with higher job satisfaction and motivation (Fried and Ferris, 1987, p.287-322).
Gheaus and Herzog also emphasise community, that is, the experience of doing an activity with other people to whom one stands in relatively free and equal relationships. Community is valued in many contexts, but working together constitutes a specific experience: partaking in collective, sustained efforts which result in joint accomplishments (2016, p.76). This makes the workplace an obvious setting to realise this good, and again, there is psychological evidence to attest to its significance – in one survey, 92% of respondents cited workplace friendships as an important factor in their willingness to remain at a company (Mason, 2022).
Finally, many people desire social recognition for the work they do (Gheaus and Herzog, 2016, p.78). Interestingly, social recognition also serves to bolster the realisation of other goods: knowing that others will appreciate the excellence of one’s eventual achievements can motivate one to hone one’s skills, and one’s own feeling of having contributed socially can be confirmed by others’ recognition. In all, the non-monetary goods of work offer important benefits for an individual’s psychological and social well-being.
Accepting this, an argument for the JG emerges: while a UBI delivers only income, the JG also provides opportunities to realise these non-monetary goods. For one, all JG jobs must be socially contributory to be implemented in the first place; this is their defining feature. They are typically community-based, often involving working with other employees towards a joint endeavour (for instance, a small infrastructure project) or directly engaging with other community members (say, playing music for care home residents). Furthermore, since the JG centres collaborative work and its projects are decided via participatory democratic decision-making, problems of unjust hierarchy which can be inimical to the development of equal relationships are less likely to emerge.
What about excellence? Although some JG jobs will inevitably involve relatively simple tasks, others require specialist skills. Further, the inclusion of training and education programs is obviously conducive to workers’ long-term pursuit of excellence. Finally, while the implementation of a JG cannot entirely change the social perception of certain kinds of work as less impressive than others, a JG job would almost certainly garner one more social recognition than no job at all. Further, recall that the JG involves redefining productive work to emphasise community-enhancing activities which might have previously been considered the remit of volunteers. As I argued in Section 2, this would plausibly contribute to some shift in societal attitude towards valuing this work more highly.
These features of the JG are comprehensively beneficial. For someone facing unemployment, the JG would provide opportunities to realise important non-monetary goods as well as needed income. For someone whose current job provides few such opportunities, the JG provides another option for their consideration. Furthermore, the new-found need to compete with JG jobs for workers will incentivise firms to make their job positions more attractive; this will likely have knock-on effects on not only wages but the availability of non-financial goods. Conversely, in delivering income only, it seems that the UBI offers less.
One can object, fairly, that this comparison is myopic. While the UBI does not directly deliver opportunities to realise these non-monetary goods, it can essentially buy individuals more free time in which to realise those same goods outside of work. The workplace is a privileged context for their realisation, yes, but not the only possible context. In fact, part of the reason for Gheaus and Herzog’s arguing that these goods should be distributed widely and fairly within the jobs market specifically is because work is non-optional and extremely time-consuming for most people. Thus, adequate opportunities for the realisation of these goods outside of work are unlikely – but a UBI might change exactly this (ibid, p.80).
For a fairer comparison, imagine a generous UBI which frees up enough time for the majority of people to devote to the pursuit of these goods. I think a problem remains. Recall the objective of the UBI, as enumerated by Van Parijs: to grant people real as opposed to merely formal freedom by providing them the necessary means to achieve their aims. For the aim of attaining the goods of work and their associated benefits, some people will inevitably require more than extra time (or, indeed, income). Consider the following example.
Suppose that John lives in a community with ample material and social resources: accessible public transit, green spaces, thriving local businesses, a sense of community. With the implementation of a UBI, he can substantially cut his hours at his (unfulfilling) job and devote that time to other goals: there, ready in his local area are volunteering projects with which he can help, language and art classes he can attend, clubs to join and events at which he can socialise. While it might still be preferable for his job to deliver some or all these goods, this is now much less plausibly a requirement of social justice: after all, the UBI has afforded him time to take up the abundant opportunities elsewhere.
Now imagine that Jack and Jane live in a very different community – there is very little community space (perhaps only a convenience store within walking distance), almost no green space, and the sense of community is undermined by a high crime rate. Jack cannot find work; Jane works long hours at a poorly paid and unrewarding job. Suppose that a UBI is implemented. Now, Jack no longer needs job-seekers’ benefits, and Jane can afford to cut her hours – but compared to John, their opportunities for realising the non-monetary goods of work are still substantially limited by the material realities of their community.
A JG, by contrast, would open valuable projects tailored to this community’s specific needs, directly facilitate participation and financially incentivise social contribution. Jack would receive not only income but a chance to contribute, develop skills and forge new relationships. Jane could cut her hours or even quit her job entirely, and take up a part- or full-time JG job in which to pursue the goods of work. Furthermore, her original employer and other firms similarly situated would now have to compete for workers with living-wage, rewarding jobs. This would require that they either improve their working conditions – likely including opportunities for the realisation of non-monetary goods – or raise wages significantly. Workers whose employers take the latter approach could afford to work fewer hours. And, since the JG provides opportunities not just for its own workers but others in the community – for instance, setting up classes and programmes through which one might realise excellence and community – this discretionary time can be used in meaningful and enriching ways. Ultimately, a JG would result in the community-wide proliferation of opportunities to realise important goods.
One might counter that a UBI would – eventually – mitigate the problem facing communities such as Jane’s by funnelling money to its residents. The crime rate would fall with the poverty rate, and with more money, people would be more willing and able to start small businesses, co-operatives and local initiatives. I don’t doubt that there is some truth to this. Note, however, that it leaves community enrichment entirely up to individuals’ discretion. Surely it is also possible that with more money, many people will simply move, leaving those for whom the UBI income translates into fewer opportunities (many of those who live with disabilities or addictions, for example) to an even more depleted community. There is no comparable systemic change as brought by the JG, and therefore, a diminished advance in social justice.
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Conclusion
While the implementation of either policy would advance social justice, I think the JG offers a significant advantage unavailable to the UBI. By providing socially-valuable employment as opposed to isolated income, the JG offers a tangible and immediate opportunity for people to realise the goods of work and all their psychological benefits – regardless of the initial state of the communities in which they live. The JG is certainly not a panacea, and careful attention needs to be paid to supplementary income support, especially for non-workers. However, the need for such support and the associated stigma are unfortunate realities with which either policy would have to contend to some extent. Ultimately, in terms of promoting the realisation of psychologically important goods, as well as socially and environmentally enriching society at large, I think the JG has enormous promise.
[1] Catherine Armstrong is currently studying for an MA in Political and Legal Philosophy at the University of York.
[2] E.g., Tcherneva, 2020, p.67-80; UBI Works, 2022.
[3] Many proponents argue for the UBI to be funded via progressive taxes, such that wealthier individuals would lose money in real terms from its implementation, but everyone would receive an identical cash transfer.
Bibliography
Anderson, E. (2000), ‘Optional Freedoms’, Boston Reviews, https://www.bostonreview.net/forum_response/elizabeth-anderson-optional-freedoms/ Accessed 18/4/23.
Barry, B. (2000), ‘UBI and the Work Ethic’, Boston Reviews,https://www.bostonreview.net/forum_response/brian-barry-ubi-and-work-ethic/ Accessed 18/4/23.
Baumberg, B. (2016), ‘The Stigma of Claiming Benefits: A Quantitative Study’, Journal of Social Policy, Vol. 45 (2), pp.181–199.
Butler, P. (2021), ‘Tens of thousands in UK avoided universal credit during Covid over stigma’, The Guardian, https://www.theguardian.com/uk-news/2021/apr/19/tens-of-thousands-in-uk-avoided-universal-credit-during-covid-over-stigma Accessed 18/4/23.
Fried, Y. and Ferris, G. R, (1987) ‘The Validity of the Job Characteristics Model: A Review and Meta-Analysis’, Personnel Psychology, 40, pp.287–322.
Gheaus, A. and Herzog, L. (2016), ‘The Goods of Work (Other Than Money!)’, Journal of Social Philosophy, Vol. 47 (1), pp.70–89.
Greenwood, A.M. (1999), ‘International definitions and prospects of Underemployment Statistics’, proceedings for the ‘Seminario sobre Subempleo’, pp.1–18.
UBI Works (2022), ‘How to Pay for a Basic Income in Canada’, Who Pays for Basic Income? Probably not you. — How to Pay for Basic Income in Canada (ubiworks.ca) Accessed 23/4/2023.
Hu, J. and Hirsh, J. B. (2017), ‘Accepting Lower Salaries for Meaningful Work’, Frontiers in Psychology, Vol. 8, Article 1649, pp.1–10.
Mason, K. (2022), ‘Study: Fully Remote Workers Report 33% Fewer Friends at Work’, JobSage, https://www.jobsage.com/blog/coworker-friendships-survey/ Accessed 18/4/2023.
Soffia, M., Wood, A. J. and Burchell, B. (2022), ‘Alienation is Not ‘Bullshit’: An Empirical Critique of Graeber’s Theory of BS Jobs’, Work, Employment and Society, Vol. 36 (5), pp.816–840.
Tcherneva, P. (2020), The Case for a Job Guarantee, Cambridge: Polity Press.
Van Parijs, P. (2000), ‘A Basic Income for All’, Boston Review https://www.bostonreview.net/forum/ubi-van-parijs/ Accessed 18/4/2023.
State of Alaska: Department of Revenue (2021), ‘Permanent Fund Dividend’. https://pfd.alaska.gov/ Accessed 18/4/2023.
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Campaign Platform & Job Guarantee. Rick DeVoe MN-01
Hopefully we will see, in not too distant future, the inclusion of a Job Guarantee planks in many more platforms.
Campaign Platform – Rick DeVoe – MN1
Good Jobs For Everyone: Full Employment Plus (FEP) is the 2022 version of FDR’s and MLK’s proposals for all Americans to be guaranteed a job at a livable wage working in and for their own communities, when good jobs are unavailable in the private sector. FEP plan jobs will be determined, as to the scope of work, by local governments and nonprofits. Job completion will be locally administered. A Federal backstop program, consisting of work to restore human and natural habitat, will provide work if there is unfilled demand at the local level. Read more
Debt Ceiling, Job Guarantee, Inflation
Grabbing a moment to catch up:
The Case for Minting a $1tn coin to deal with America’s Debt Ceiling
— Nathan Tankus (@NathanTankus) <em>The Guardian</em> (@guardian) Oct 15, 2021
Good Forms of Collectivity: Low-Carbon Care Work and a Federal Job Guarantee
— Natan Last (@NatanLast) Los Angeles Review of Books @LAReviewofBooks April 26, 2021
Like Haiku, the limits created by Twitter offer opportunities for brevity and coherence. Here’s the first bit of Steven Hail’s admirable Nov 1, 2021 Twitter thread:
“Inflation is not in itself some terrible disease which we have to minimize or eliminate.
It is not like Covid, needing to be stamped out. It is not like involuntary unemployment, underemployment and insecure employment, which are genuinely social evils.” Read more.
It’s All Connected
Added to Job Guarantee, here.
A Federal Job Guarantee: The Unfinished Business of the Civil Rights Movement • The 1963 March on Washington put a government guarantee to a job at the front of the civil rights agenda. It’s long past time to complete the work.
— Rep. Ayanna Pressley (@AyannaPressley), David Stein (@DavidPStein <em>The Nation</em> (@TheNation) Sept 2, 2021
A little macro background for Macroeconomics: Provisioning and Prosperity, particularly with regard to universities as a provider of alternative currencies.
The Rise of the UniverCity • As they come to resemble corporations, universities increasingly wield the kind of power and influence that were hallmarks of ruthless employers in isolated company towns. Historian Davarian Baldwin calls this ominous trend the “rise of the UniverCity.” — Davarian Baldwin (@DavarianBaldwin), <em>Jacobin</em> (@Jacobin) Sept 2, 2021 #Background #Unis4All #InTheShadow
A new addition to our Blogroll and Kelton’s page under Primary Sources.
The Lens – Stephanie Kelton • “The Lens is a portal into my academic and professional world. It’s a place to visit for economic analysis, commentary on public policy, and previews of forthcoming talks and publications. Never miss an update.”
Direct Job Creation in Greece
Senior Scholar Rania Antonopoulos recently participated in a webinar for the European Trade Union Institute, during which she discussed the rationale behind and experience with the implementation of the “Kinofelis” direct job creation program—a limited job guarantee for Greece. Watch her presentation below (accompanying slides are here).
The Levy Institute’s previous Strategic Analysis for Greece found that supplementing EU Recovery Funds with a more expansive job guarantee program (employing up to 300,000 people by 2022Q1) would help lift the Greek economy closer to its pre-pandemic growth trend.
The “Thing” with Job Guarantee Programs…
In a February 18th front page article in the business section of the New York Times, Eduardo Porter surveys the potential for a job guarantee program. After starting with the caveat issued by Republican politicians—why trust your life choices to bureaucrats?—the piece goes on to present opinions of various experts on employment programs.
It is noteworthy that even among the specialists, not one has ever been involved in actual fieldwork or research in the various experiments with job guarantee programs. In an era in which we are asked to respond to facts, none of those consulted on the implementation of job programs has ever provided statistical analysis of results, nor studied the communities where the programs were actually successful in achieving their stated goals—which in general are much wider than the suggestions that the programs have not contributed significantly to lessen economic recessions, or that they are too expensive and that they might produce “useless make-work.” Indeed, there are no references to the many existing experiments.
Consider Argentina, where there is ample evidence that the Head of Households Program (HHP) played an important role in alleviating the recession and actually had a significant impact on the recovery of the economy after the 2001-2 economic, political, and social collapse. In situ fieldwork based on participant interviews conducted in urban irregular settlements shows[1] that the impact of program work experience was much greater than a simple impact on sustenance incomes. Indeed, program design produced significant impacts on gender equality and environmental preservation.
Women were able to join several activities that not only provided them with an income but also provided access to food, basic medical attention, regular health checks for families, child care, literacy, and training. Most importantly, participation in program activities created a community support network in areas of extreme poverty. The jobs that many consider “useless make-work” provide training for women that allows them to leave abusive domestic conditions.
Fieldwork undertaken in Lomas de Zamora shows that the programs provided relief for families experiencing food insecurity and improved women’s participation in training activities that allowed them to apply for jobs beyond housekeeping or as street vendors. The women also expressed their satisfaction at being able to help their children with school work and were proud to go to work and participate in educational activities.
Other employment opportunities that have been reported in on-site studies include that of a women’s cooperative (in the area of Lomas de Zamora in the provincia de Buenos Aires)—the “Agua mas trabajo” (Water plus Labor)—which installed sewage in underserved areas in the metropolitan area of Buenos Aires. The federal government provided the heavy machinery and the materials to several cooperatives; among them cooperativa Nueva Argentina, composed of 15 women and one man. The women learnt plumbing, welding, and basic construction skills and received technical, legal, and business training as well.
These aspects might not seem relevant in the discussion of countercyclical policy and labor market efficiency, but in communities with high unemployment, crime, and domestic violence rates and high percentages of immigrants and unemployed heads of households, the social contributions can be significant.
If we are to appropriately assess the viability and costs of these programs, it is incumbent on experts to analyze the more general benefits they provide. One reason that these aspects have been overlooked is that the programs Porter mentions, such as “work opportunity tax credits,” are simply subsidies to the private companies where the government covers a percentage of the workers’ wages. They are not successful because they only offer money and don’t include the most successful part of the programs—the activities that encourage people to improve their education and their training, having a long lasting impact on their lives and the lives of their families and communities. Further, the European research cited in the article that provides an “overview” of the labor market effectiveness does not represent micro statistical survey data from the programs they analyze. None of the work of the researchers cited provides statistics derived from actually visiting the community projects and interviewing participants. Instead, their conclusions are based on results from macro data. Their analysis is based on databases compiled by the United Nations and doesn’t include the details of each program—leaving an important blind spot not captured by the numbers and models they have selected.
Government programs always incite political debate and recrimination, usually based on the prejudice of the analyst rather than the hard work of actual on-site analysis. There are always examples of programs that do not produce the desired objectives, but it is important to learn from those that actually work and recognize the appropriate catalogue of costs and benefits. When the programs’ activities are designed with the participation of members of the communities where they are implemented, the gains are significant. But government officials must commit to improve the well-being of the participant communities, not the balance of the government’s budgets.
[1] TEPEPA, Martha 2013 El Programa Jefes y Jefes de Hogar: Experiencia en Ing. Budge, Lomas de Zamora, Argentina, Tesis de Doctorado, Colegio de Mexico.
Thursday, 7 September 2017 - 6:21pm
I've been meaning to go through the literature on every thrust and parry in the ongoing argument between proponents of a Job Guarantee and those of a Basic Income, and put together a thorough response. That's not going to happen in the next month or so, so in case I get hit by a bus, here's two paragraphs of where I stand (or don't stand) in the debate, lifted from a comment I just posted on Neil Wilson's blog:
Basic income vs. job guarantee is a false dichotomy that ill serves anybody who takes sides. There is undoubtably some overlap in that they both aim to reduce hardship and stimulate demand, but as far as I can see they’re mostly orthogonal in the range of problems they can potentially solve. Also they’re both programs that we already run, in the sense that we (in developed sovereign currency economies) already have a labour buffer stock program — unemployment — and a basic income, set at the level of zero.
I’m totally sold on (at least my understanding of) the job guarantee as a better implementation of a labour buffer stock, but I don’t think that “with a job guarantee in place, no matter what the particular circumstances may be, anywhere and forever, no level of basic income other than zero could be justifiable” is a defensible argument. And it runs counter to the general MMT stance of “these are the economic policy tools available; how you choose to use them is a political decision”.
When the Fed supported a Job Guarantee policy (and the economist who made it happen)
Circuit here. I'm back from a few months hiatus following the birth of my second child, a baby girl. Thanks to all readers for your continued interest in this blog.
A few weeks ago, Rolling Stone magazine ran a piece by Jesse Myerson supporting the idea that the government should guarantee a job to anyone who is willing to work. In their recent work, Dean Baker and Jared Bernstein also give support to this policy proposal. Randy Wray, Warren Mosler and other modern money (MMT) economists have been pushing for this idea for a long time. On the center-right and right, the idea is being promoted by Peter Cove and Kevin Hasset.
This is good news. I certainly welcome a good debate on this idea. That said, it's too bad that commentators who are skeptical of the idea simply dismiss it as a non-starter for policymakers.
This, of course, is overstating the case somewhat. It's worth recalling that in the 1970s none other than the Chairman of the Federal Reserve supported the idea that the federal government should be the "employer of last resort". Here's the former Fed Chairman Arthur Burns back in 1975:
I believe that the ultimate objective of labor market policies should be to eliminate all involuntary unemployment. This is not a radical or impractical goal. It rests on the simple but often neglected fact that work is far better than the dole, both for the jobless individual and for the nation. A wise government will always strive to create an environment that is conducive to high employment in the private sector. Nevertheless, there may be no way to reach the goal of full employment short of making the government an employer of last resort. This could be done by offering public employment -- for example, in hospitals, schools, public parks, or the like -- to anyone who is willing to work at a rate of pay somewhat below the Federal minimum wage.
Burns
With proper administration, these public service workers would be engaged in productive labor, not leaf-raking or other make-work. To be sure, such a program would not reach those who are voluntarily unemployed, but there is also no compelling reason why it should do so. What it would do is to make jobs available for those who need to earn some money.
It is highly important, of course, that such a program should not become a vehicle for expanding public jobs at the expense of private industry. Those employed at the special public jobs will need to be encouraged to seek more remunerative and more attractive work. This could be accomplished by building into the program certain safeguards -- perhaps through a Constitutional amendment -- that would limit upward adjustment in the rate of pay for these special public jobs. With such safeguards, the budgetary cost of eliminating unemployment need not be burdensome. I say this, first, because the number of individuals accepting the public service jobs would be much smaller than the number now counted as unemployed; second, because the availability of public jobs would permit sharp reduction in the scope of unemployment insurance and other governmental programs to alleviate income loss. To permit active searching for a regular job, however, unemployment insurance for a brief period -- perhaps 13 weeks or so -- would still serve a useful function.
The idea was even supported by one of the most respected names in economics at the time: Franco Modigliani. When asked to comment on Chairman Burns's proposal during a testimony before the Congressional Banking committee in 1976, Modigliani said the following:
...the idea of a public employment program as an employer of last resort, which is an alternative to unemployment compensation, strikes me as a very sound idea (p. 110).
Interestingly, the economist who got Burns and the Fed to put serious thought into the idea of a job guarantee was another well-respected contributor to US public policy during that period: Eli Ginzberg.
Job Creation through Public Service Employment
Eli Ginzberg was a Professor of Economics at Columbia University and author of numerous books on human resources and manpower economics. He was also -- in the language of Harold Wilensky and organizational sociology -- a "contact man", a person who provides ideas and furnishes intelligence to decision-makers on the political and ideological tendencies in the society at large. Ginzberg played this role throughout his career as presidential adviser for many administrations and through his affiliation with the Manpower Demonstration Research Corporation (MDRC), which recently marked its 40th year of operation.
Ginzberg was an institutional economist in the tradition of John M. Clark and Wesley C. Mitchell who believed fervently that "people, rather than physical or financial capital, were the principal source of productivity and wealth" (1987:107). For this reason, Ginzberg believed it was critical for the government to eliminate unemployment as quickly as possible through the use of a publicly-funded jobs program.
Another reason why Ginzberg believed the government ought to be employer of last resort is that he understood that economies sometimes face a shortfall in jobs that makes it impossible for all unemployed workers to find work:
Just as reality has mocked the ethos of equality of opportunity for many minority children, the counterpart doctrine that adults are responsible for their own support and that of their dependents has been undermined by the continuing shortfall in jobs. The existence of high unemployment rates make it socially callous, even reprehensible, for a society to continue to affirm the doctrine that all adults who need income should work and then not provide adequate opportunities for many of them to fulfill this imperative.
Although the US experimented with federally financed job creation in the 1930s and again in the 1970s, the record in retrospect must be viewed as equivocal. Most students believe that on balance the New Deal was right to put large numbers of the unemployed to work on governmentally financed programs rather than to keep them on the dole as the British did. (1987:162)
Ginzberg
On this last point concerning whether income transfers or guaranteed work should be the centerpiece of US social policy, Ginzberg's view was informed by the work he did during the Great Depression. Here's how Ginzberg summarized the conclusions of a 1947 book entitled The Unemployed that he co-authored on the topic of unemployment during the Great Depression:
The principal lessons I extracted included the superiority of work relief over cash support...; the cause of unemployment being rooted in a shortfall in demand for labor, not in the inadequacies of the unemployed; the centrality of work and self-support for the integrity of the individual worker, his family, and the community. By the time our investigation was concluded, [we] were convinced that no society concerned about its security and survival could afford to remain passive and inert in the face of long-term unemployment. We argued that in the absence of an adequate number of private sector jobs, it was the responsibility of government to create public sector jobs. (1987:111)
Ginzberg also believed that guaranteed work for those who are able and willing would find greater acceptability among Americans than a policy that would require government providing a guarantee income to everyone. According to Ginzberg, providing guaranteed income to everyone would conflict with the powerful American ethos of self-reliance and the American population's highly favorable view toward the culture of work:
There is no simple way, in fact, there is no way to square the following: to provide a decent minimum income for every needy person/family in the US, given the differentials in living standards, public attitudes, and state taxing capacity, and at the same time avoid serious distortions in basic value and incentive systems that expect people to be self-supporting through income earned from paid employment. (157)
For this reason, Ginzberg believed that a job guarantee should play a key role in social policy:
Accordingly, I would like to shift the focus from welfare to work, from income transfers to the opportunity to compete, from dependency status to participation in society. In advocating this shift toward jobs and earned income and away from unemployment and income transfers, the planners must focus on two fundamentals: the developmental experiences that young people need in order to be prepared to enter and succeed in the world of work; and the level of employment opportunities that a society must provide so that everybody able and willing to work, at least at the minimum wage, will be able to do so. (157)
In the 1970s, Ginzberg held the position of Chairman of the National Commission for Manpower Policy, a government-mandated commission that produced some of the best policy-oriented research on the topic of public service employment, including an excellent paper entitled "Public Service Employment as Macroeconomic Policy" by Martin Neil Baily and Robert Solow (1978) that explains how public service employment (PSE), while not necessarily more stimulative than the normal kind of fiscal policy (e.g., government spending on goods and services and tax measures), can be a perfectly sensible policy if the program is well-administered and the jobs that are created provide useful social output:
Solow and BailyWe conclude that the main advantages of PSE over conventional fiscal policy are: (a) that it can be targeted to provide jobs for hard-to-employ groups in the labour force, and for especially depressed cities and regions; (b) that PSE employment, correctly targeted, may be slightly less inflationary than the same amount of ordinary private sector employment, so that total employment can safely be a little higher with a PSE component; and (c) that PSE can be coordinated with other forms of social insurance -- public assistance and unemployment insurance, for instance -- to make them perhaps more effective and certainly more acceptable to public opinion. (1978:30)
Solow later revisited the issue of public service employment in Work and Welfare (1998), in which he argued that any attempt to reform the welfare system in order to get the unemployed back to work would only succeed if every able and willing worker is given access to a job through public service employment and/or by offering incentives to businesses to hire the unemployed.
The Deal
It was in the 1970s that Ginzberg persuaded Chairman Burns to call on the US federal government to become the employer of last resort. Here's Ginzberg's account of how he was able to get the Fed Chairman to support the job guarantee:
I made a deal with Arthur Burns when he was the head of the Federal Reserve, that I would try to control the amount of money we asked for from the Congress for manpower training if he would come out in favor of the government as the employer of last resort. And he did it. It took him a year, but I negotiated with him and he did it.
A final word. Although Ginzberg supported the idea of a job guarantee, he fully recognized the high budgetary cost that such a policy would entail and the practical challenges facing public administrators in terms of successfully implementing a public service employment program. To address these concerns, he believed the government authorities should make improvements to the program using trial and error and cautious experimentation. But the key, he would argue, is to ensure that the jobs created through these measures provide productive social output:
There is no big trick to put more and more people on public service employment. If that is the only thing that one is interested in, obviously, the Federal Government can create the money by fiat and put more people on public service employment. The question is what are the short- and long-run implications of doing that in terms of keeping our economy productive, competitive and innovative....So I do not think it is just jobs; it is productive jobs and that is another way of saying that the Federal Government can go only part of the way in terms of assuring that we have a productive economy.
References
Baily, Martin N. and Robert Solow, "Public Service Employment as Macroeconomic Policy", National Commission for Manpower Policy, 1978
Ginzberg, Eli, The Skeptical Economist, Boulder and London: Westview Press, 1987
National Commission for Manpower Policy, "Job Creation through Public Service Employment: An Interim Report to the Congress", 1978
Solow, Robert, Work and Welfare, Princeton, NJ: Princeton University Press, 1998