Mitchell’s laws: The more budgets are cut and taxes inceased, the weaker an economy becomes. Until the 99% understand the need for deficits, the 1% will rule. To survive long term, a monetarily non-sovereign government must have a positive balance of payments. Austerity = poverty and leads to civil disorder. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
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Those of you who have seen the web site at MMP Blog 50: MMT Without the JG? Conclusion know I’ve taken a terrible pasting for daring to continue saying what I said previously in Why Modern Monetary Theory’s Employer of Last Resort is a bad idea and in MMT’s Job Guarantee (JG) — “Another crazy, rightwing, Austrian nutjob?”
Because Modern Monetary Theory (MMT) and Monetary Sovereignty (MS) have so much in common, I hate to see MMT destroy its credibility, and by association, the credibility of MS, on an unrealistic idea. We’ve worked too hard to build that credibility.
Sadly, some MMTers have invested so much personal capital into the Jobs Guarantee (JG) idea, that emotionally they find it impossible to view JG dispassionately. In fact, one of the major proponents of JG has written a book about it, and there is no way that book will be “unprinted.”
For the uninitiated, JG (formerly called “Employer of Last Resort”) is a proposal whereby the federal government would guarantee a job to anyone who wants one. Simple enough.
JG is based on the reasonable notion that involuntary unemployment is bad. Without addressing all the reasons behind unemployment, JG provides a simplistic solution: Give people jobs so they will have dollars and have “something to do” that is “productive” – the most common themes expressed by MMT.
Here is a direct quote from one of the foremost proponents of JG: “JG creates jobs for those who want them, then trains workers on the job.” For a moment, visualize the nationwide, millions-of-workers reality of that, before you continue reading.
The devils are in the details, and what fierce devils they are.
*What jobs?
*What pay?
*Where are the jobs?
*Who hires?
*Who fires (Is firing even possible?)
*Who supervises?
*Who trains?
JG makes the tacit assumption that someone involuntarily unemployed will be so desperate he/she will take any job. But even in today’s economy, vast numbers of jobs are available, so many jobs, employers need to spend time and money, advertising for employees. Recently, I looked at Monster.com and found more than 1,000 jobs, waiting to be filled, just in Chicago alone. Add to that all the jobs being advertised in the Chicago Tribune, the Chicago Sun Times, the many other local papers, plus all the unadvertised jobs.
I saw all sorts of jobs: Office jobs, outdoor jobs, work-from-home jobs, restaurant waiters, busboys and dishwashers, fast food order takers, delivery people, lawn maintenance, maids, nannies, window washers, inside sales, outside sales, phone sales and sales trainees, warehouse and manufacturing workers, and on and on and on – these jobs exist. Walmart, Macdonalds, Starbucks et al continuously hire.
Yet, the unemployment rate in Chicago exceeds 8%. How can that be? Simple. From the standpoint of job seekers, they are the wrong jobs with the wrong pay at the wrong locations.
When I put forth that problem, MMT proponents respond, the government will match people to jobs. Oh really? Today, there are more than five million unemployed for 27 weeks or more (Federal Reserve Bank of St. Louis). These people live in big cities, small cities, villages and farms, spread all over the nearly 4 million square miles of this country. Who will match job seekers to jobs?
The JG program assumes people want jobs, when in fact, people want income, not jobs. Yes, I’ve heard the protestations that people need to be active and productive, and I’ve heard from people who say they love their jobs. Mostly, it’s all a myth.
If people loved their jobs, why do they prefer weekends to weekdays? Why are employers forced to pay higher than regular wages, just to get people to work more than 8 hours? In fact, why pay wages at all. Nobody pays people to go to Disneyland or to go Hawaii or to a movie. Nobody pays people for time off; people do “time off” for free.
How many people really prefer waking early in the morning, traveling an hour to work, taking orders from, and trying to please, a boss, worrying about being fired or passed over for promotion, then traveling another hour home – how many people prefer that to doing things they really enjoy like golf, fishing, tennis, sightseeing – or writing a blog?
What do people tend to do when they win a big lottery? Answer: Quit those jobs they “love” so much. (Of course, when they blow their winnings, what do they do? Look for a job. They need the money.)
So far we have touched on two JG myths: People will accept any job to get off the unemployment rolls, and the government is capable of matching people to jobs.
Now let’s get to salary. JG proponents either differ, are vague or noncommital on this crucial subject. One MMT leader says $30,000 per year plus benefits. (By the way, I keep saying “leader” because I don’t want to embarrass anyone by naming them.) Visualize the effects on all the employers, who pay less than $30,000, if everyone were guaranteed such pay. Massive numbers of firms would be driven out of business. The result: Fewer jobs, not more.
Another MMT leader says the JG pay should be at or below minimum wage, so as not to compete with private industry. But those minimum wage jobs already exist, as I’ve noted above. No JG needed.
Despite the fact that wage is one of the fundamental parts of any jobs plan, JG proponents don’t agree on what wage will be offered nor do they understand a wage’s effect on the economy.
So that’s the third JG myth: Wage doesn’t much matter.
Then we come to the “bufferstock myth.” To quote from the original JG post, “ . . . you can use the JG pool as a better wage- and price-stabilizing bufferstock than the “reserve army of the unemployed” can be.”
“Bufferstock” is a supply of people who are available to take jobs. It’s important, because if there is no bufferstock, employers can’t find people to hire, so must compete with other employers by offering higher and higher salaries, which leads to inflation.
But the notion of JG jobs being bufferstock requires that something about JG jobs must be less satisfactory than the jobs being offered by private industry – else people wouldn’t want to move. Bufferstock requires that the JG jobs pay less than minimum wage or in some other way, be less appealing to the JG jobholders.
But those low pay, less appealing jobs already exist – by the millions. So how does JG provide an improvement over the current situation? It doesn’t. It guarantees the same jobs the unemployed already have demonstrated they don’t want.
So that’s the fourth JG myth: JG provides bufferstock.
Then we come to a reality of employment, to which I allude in the headline: “You can’t fire me; I’m JG.” Businesses are controlled from the top. Someone in the role of CEO or president instructs subordinates, who in turn, instruct their subordinates.
To instruct there must be control, which is based on the ability to reward and punish. Rewards consist of compensation and promotions. Punishment means firing. But how does JG allow for increases in compensation or for firing?
The government would set some compensation level, and it’s difficult to imagine businesses being able to deviate from it for temporary jobs. And as for firing, how does one get fired in a jobs guarantee situation? Employers, being able neither to reward nor to punish, would have no control over employees, who would have no motivation to do as they are told.
So that is the fifth myth: JG provides good, productive employees.
In summary, JG seems wonderful when viewed from a distance: People need jobs; give them jobs. But under the microscope, it is an unrealistic disaster.
Finally, I can’t end without quoting one JG defender: “Jobs have a social benefit of social interaction and that’s where many people meet their partner for life these days.”
So you have it: Despite all its fatal flaws and myriad myths, JG can serve as eHarmony.com. That’s what makes it all worthwhile.
Rodger Malcolm Mitchell
http://www.rodgermitchell.com
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No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia. Two key equations in economics:
Federal Deficits – Net Imports = Net Private Savings
Gross Domestic Product = Federal Spending + Private Investment and Consumption + Net exports
#MONETARY SOVEREIGNTY
#Monetary Sovereignty - Mitchell 
Rodger,
I’m not an MMT leader, but I have some ideas about these:
*What jobs?
I would prefer for JG workers to do
– training, such as learning to use MS Word so they can apply for that office job
– help writing a better resume, or learning interviewing skills
– things now done only by volunteers, such as working in food banks or with Habitat for Humanity (I think some people call charities like these “NGOs”, for non-government organizations, meaning also non-profit organizations.)
The idea is for JG not to compete with private sector employers for sales.
*What pay?
I think it has to be approximately minimum wage, but might include child care (provided by other JG workers in a co-op arrangement, ideally). Some think it should also include health insurance, but they also believe government should provide health insurance for everyone, so maybe that is not to be included when compared to minimum wage. The idea is not to compete with private sector employers for employees.
*Where are the jobs?
Very much local. Most of the unemployed live in urban areas with at least some public transportation. The job must be within reasonable distance of the worker.
*Who hires?
Local governments or charities. No large centralized bureaucracy.
*Who fires (Is firing even possible?)
See “who hires”. If the employee does not perform satisfactorily, they can be “fired”. JG is for people “willing to work”.
*Who supervises?
Supervisors would be permanent employees of the hiring organization. They will often be additional permanent employees. JG includes money for this, in addition to the JG workers’ wages.
*Who trains?
For the “training” activities available to JG workers, the same organizations that provide that training today, in the private sector. Some non-technical training would be OJT, like how to show up for work on time, every day, clean and sober.
I know some MMT leaders have other ideas about some of these things, and they do not always agree with each other. My version of things is designed specifically to address the devilish details that you worry about. I was skeptical of JG until I worked them out for myself.
Just as a JG job on your resume would be superior to unemployment “gaps”, a private sector job even at minimum wage would be superior to a JG job. Workers with ambition for advancement and higher pay would prefer a private sector job to JG for that reason.
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golfer,
Thanks for your comments. While I respect your efforts, each of your answers has unrealistic implications.
For this answer, I won’t debate the real-world practicality of your suggestions other than this one: ” If the employee does not perform satisfactorily, they can be “fired”. JG is for people “willing to work”.”
The vast majority of unemployed were fired, for many different reasons. JG is supposed to give jobs to everyone who wants one, i.e. to the millions of people who were fired.
In the real world, I don’t see how “willing to work” would be evaluated. Seems unrealistic. But then, that’s just one of the reasons JG is unrealistic.
I truly wish MMT would focus on ways to stimulate economic growth, which automatically would take care of the unemployment situation, rather than being sidetracked with JG. Unemployment only becomes a big issue when economic growth is slow.
JG is a digression. MMT has taken its eye off the ball.
Rodger Malcolm Mitchell
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“I truly wish MMT would focus on ways to stimulate economic growth, which automatically would take care of the unemployment situation, rather than being sidetracked with JG.”
Isn’t that what MMT already says should be done first?
The sequence of events is supposed to go something like this:
Let’s imagine that economic stimulus is applied properly, via tax cuts/ infrastructure spending/whatever – such that the budget deficit expands, the output gap closes, high growth resumes, and unemployment eventually falls to, say, 3%-4%. MMT and MS seem to agree that that is what would happen.
Now, in such a booming economy – with 3%-4% unemployment – I think it’s pretty safe to state that the only people without jobs (excluding transitionals) are those who are in fact low-skilled, less intelligent, and can only work jobs at or around the minimum wage level.
Thus, the wage differentiation issue would largely be avoided. So too would the practical problems of having a massive pool of unemployed. There should never be a massive pool of unemployed to begin with under MMT. That is the faulty premise that I think a lot of these anti-ELRA articles begin with.
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I think the vast majority of the unemployed today were “laid off”, not “fired”. There is a difference. JG employees would never be laid off, and if they would be then that would not be much of a “guarantee”, would it? If they would not do “what the boss wants them to do”, as you put it, they could be fired, just like any employee can be fired “for cause”.
I think “willing to work” is easy to evaluate. If he shows up, and performs the work he is told to do, and is not under coercion, then he is willing to work. If he doesn’t show up, and doesn’t have an acceptable reason (e.g., sick leave is OK, just like in the private sector), then he’s not willing. If he shows up and makes himself obnoxious and unproductive, he’s not willing. If he shows up drunk or stoned, he’s not willing. What sort of real world situation do you think would be hard to evaluate, and would occur in large numbers of cases?
You said in WR’s blog that 4.5% unemployment that prevailed just prior to the Great Depression was considered the best that an economy can do. Is that different today? By properly managing the deficit (as MMT says we should do), how low an unemployment rate can we achieve? And what do we do about those still unemployed, since it is through no fault of their own and their disease cannot be fixed by any resolution of their personal problems, because the economy is already doing the best it can do?
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“But even in today’s economy, vast numbers of jobs are available”
True, but the number of applicants for those jobs is even vaster. There is always turnover, and relatively high turnover in relatively lower-paying jobs. That is why there is lots of advertising (internet and newspapers reach wider audiences than just hanging a sign in the window).
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“government will match people to jobs”
Not in the same sense that Monster.com matches people to jobs. The jobs that JG workers will fill are going unfilled today, because they are volunteer jobs. Now, especially, the need is greater for JG workers, like food bank volunteers. Not only are the JG workers a buffer stock, those types of jobs are also a buffer, expanding and contracting counter-cyclically.
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I too have struggled with the implementation of the JG for many of the same reasons you have cited. In my view some of them can be resolved, but it would probably be far more coercive than most JGers might be willing to accept. A low wage job would replace unemployment insurance after a short period (say 26 weeks of Unemployment Insurance payments) and all other forms of Government assistance would be cut off after another 24 months should a person not enter the JG. This type of a JG would really be sugar coated Workfare… I don’t think this is what JGers have in mind…
The JG would act as a wage floor though and might force MacDonalds et.. al. to increase wage/benefit packages to attract workers. Such an increase in wages paid by “low skill” employers might not be overly inflationary if there is unused productive capacity.
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Fundamentally, I think it all comes down to one question: How low does unemployment need to go for poverty to be eliminated in America?
I ask this question because I don’t think it’s right that the world’s richest nation has a permanent poverty class.
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Tyler,
Yours is a perfect response.
Unemployment does not = poverty. JG recipients can be “employed,” but live in abject poverty. Can you imagine a family of 4 surviving on JG’s minimum wage, while living in Manhattan?
So the goal is not to eliminate unemployment, but to eliminate poverty — two completely different things.
Yet another reason I think JG is a digression.
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“But those low pay, less appealing jobs already exist – by the millions. So how does JG provide an improvement over the current situation? It doesn’t. It guarantees the same jobs the unemployed already have demonstrated they don’t want.”
Patently false in the State of Iowa, which otherwise has low unemployment. There is a significant gap between low-skill job offers and the number of low skilled workers, Way too many low-skill workers for the number of job offers. There is almost full employment of high-skill workers, and a shortfall of mid-skill workers relative to the number of job offers, according to the Cedar Rapids Gazette last week.
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“Way too many low-skill workers for the number of job offers.”
What are the low skill, minimum wage jobs unemployed people want, and how will JG create them?
One problem I have with JG is, it seems to be a moving target. Criticize any aspect, and someone will describe a situation that solves that problem — but it’s a different situation from what the last guy described.
For instance, do you visualize the government as an employment agency or as creating jobs from zero, and in either event, how does it do that.
And I still don’t understand the specific process by which someone is fired in a JG situation.
Rodger Malcolm Mitchell
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When I first read about MMT – at Warren Mosler’s website, there was no mention of a Jobs Guarantee (JG). But the rest of what I read made perfect sense. Your analysis of a jobs guarantee seems to be on-track, though I could add another point for you — namely that technology can increase productive capacity so much that fewer workers are needed to provide for the whole human population. Over time, everyone would end up on the Jobs Guarantee.
Instead of a Jobs Guarantee, a Basic Income Guarantee (BIG) would be much better – especially if its size were related to the excess production of the nation. That way, if too many people are sitting back, doing nothing, the BIG would get smaller, encouraging people to find more productive activities. On the other hand, if the BIG increases due to too much excess production, more people will decide they can get by without working. It provides a natural, negative feedback loop.
The problem with both the JG and BIG is that without addressing the vast inequalities in income and wealth between the 1% and 99%, both would probably leave their recipients in or near poverty.
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RMM,
I’m glad we could follow up on our discussion here at your blog.
To preface, I should make clear up front I do not advocate the JG is de facto good policy. I’m open minded to the idea and somewhat warming to it, although there are many implementation issues to consider. I’m writing because as someone who is considering the JG, I don’t find your concerns persuasive. Let’s go through each:
1) Alleged Myth 1: People will accept any job to get off unemployment rolls
JG makes the tacit assumption that someone involuntarily unemployed will be so desperate he/she will take any job. But even in today’s economy, vast numbers of jobs are available, so many jobs, employers need to spend time and money, advertising for employees.
My suspicion is MMTers might propose changes to unemployment compensation (UC) to coincide with the implementation of the JG for a more symbiotic relationship between the two. It seems to me getting the involuntarily unemployed (IU) off of UC wouldn’t be too terribly difficult by either reducing the rate and/or duration of UC benefits. So granting for sake of argument some may object to the available JG jobs as unsatisfactory, the decision may reduce to choosing between the lesser of two evils. We’ve all taken a job at one point that wasn’t our ideal choice but was nevertheless preferable to being unemployed and without much if any income. And it isn’t like these jobs are going to be miserable, life-draining pseudo-opportunities. They should be perfectly pleasant places to work with a genuine contribution to society. They may not be ideal, but they ought to be acceptable to any reasonable person.
Secondly, I don’t find your want ads empirical data necessarily evidentiary of dissatisfaction with available jobs. Your argument seems to be, because there are lots of want ads, there are therefore a lot of jobs available people don’t want. Hence, creating more of these jobs–as the JG proposes–seems a certain failure. But you haven’t established that all or most job offers are unwanted jobs just by virtue of their availability. I think you’ve overlooked transient unemployment. How do you know the ads aren’t resulting from people or companies looking into alternative opportunities/people? Transient unemployment creates a need for perpetual want ads. Some businesses may even be motivated to run ads relatively consistently because they have a large work force which is ever changing and/or high turn over.
As an aside, if we were to accept your argument that want ads were evidence of unwanted jobs, your argument proves to be pretty condemning evidence of the private sector’s ability to match available workers with available opportunities, given vast quantities of people are rejecting the current millions of jobs the non-government domestic sector has made available. This suggests markets aren’t efficient and may need more central planning, which ironically is one of your concerns about the JG.
And finally, I’m not so sure JG jobs need to be menial. e.g. we could have an underpaid research and development department, whose workers are honored for their contribution to and sacrifice for society. This would be similar to how the military is regarded. Such innovation producers would serve a culturally venerable place. It wouldn’t even necessarily require sacrifice. Accepting a JG job could be with the foreknowledge you make up the income difference only if your work is truly innovative and profitable. I don’t see why they couldn’t profit with success. It would be good incentive to sacrifice now for potential gain later. Even if unsuccessful, they’d be honored and appreciated for the public good such work is intended to and often will provide.
There might be a manner in which this particular type of JG can be tied together with the university system, and therefore tied together with unskilled but learning labor as well as people being laid off during a recession who are returning to training facilities to find new opportunities.
2) Alleged Myth 2: The government is capable of matching people to jobs
The JG doesn’t necessarily require the government to match people to jobs. The IU could be offered a range of jobs from which to choose, all of which are related to projects the government has deemed in the public interest. Alternatively, targeted subsidy of private industry may suffice, avoiding any direct government employment, leaving people to choose from the private sector opportunities. An example would be; the government could hire private, bidding contractors to perform infrastructure retooling rather than hiring and managing them itself.
3) Alleged Myth 3: Exact wage levels are just a side issue, and not a key to JG
I don’t believe MMT academics would suggest the level of wages of the JG employees is peripheral to a smooth functioning economic system which utilizes a JG. I think what MMTers intend to communicate is, one doesn’t need to know the exact wage before he has an opportunity to determine the program is one worthy of support. In other words, don’t miss the forest for the trees.
4) Alleged Myth 4: JG jobs provide a ‘bufferstock’ of potential employees.
Bufferstock requires that the JG jobs pay less than minimum wage or in some other way, be less appealing to the JG jobholders. But those low pay, less appealing jobs already exist – by the millions. So how does JG provide an improvement over the current situation? It doesn’t. It guarantees the same jobs the unemployed already have demonstrated they don’t want. So that’s the fourth JG myth: JG provides bufferstock.
JG jobs might have to pay less than a revised minimum wage, but not less than the current minimum wage. Secondly, as noted previously, you haven’t established the JG promises more unacceptable jobs.
5) Alleged Myth 5: People want to be employees more than something more fundamental.
The JG program assumes people want jobs, when in fact, people want income, not jobs.
There are many who would love a free lunch. People shouldn’t be given a free lunch though, and the JG prevents just that with a coinciding reduction in UC benefits. The system needs to account for both opportunity and accountability. The goal cannot be merely to provide people with an opportunity or income, as this would generate an environment ripe for moral hazard. Accountability must be incorporated. Generally speaking, people should have to produce to receive income, right? The JG would encourage a “give to the system before you can take from it” attitude, i.e. it would encourage fairness and balance.
Robert Rice
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Robert, you’re describing a wonderful, heavenly system. Now think of the realities of the logistics and of the government.
One of many unrealistic examples: Your comment, “They should be perfectly pleasant places to work with a genuine contribution to society.”
And, ” . . . we could have an underpaid research and development department, whose workers are honored for their contribution to and sacrifice for society.”
And, “The JG would encourage a “give to the system before you can take from it” attitude, i.e. it would encourage fairness and balance.”
It goes on and on. Sounds like someone is sprinkling a little fairy dust on JG.
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Rodger,
I think I’ve come full circle to your side of the argument. It makes sense for civilians. However, there’s still a way to solve both the problems you raise and the problems MMTist are trying to solve….
1) Re-institute the draft.
2) Give draftees the option to stay in after their mandated term of service.
3) Require an honorable discharge as a prerequisite for civilian employment.
It’s not a perfect solution but, when you think about it, it’s the best one thought of so far. There would have to a few additional controls put in place, but it would work. It works for Taiwan, South Korea, and Singapore, anyway….
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Roger, you keep going over old ground and repeating right wing talking points that insult the unemployed.
— wages ? The JG would replace the minimum wage — which should be a living wage — as discussed by Mosler and Wray. Where is the mystery ?
— $30,000 minimum wage ? In Denmark, a dishwasher makes $15/hr and has health care and a comfortable pension. Yes, things cost more, but the standard of living and the quality of life are high.
— matching workers to tasks ? The military does it all the time. The WPA did it. The military does not match successfully 100% of the time, but neither does the private sector. I’ve performed all sorts of mis-matched jobs in my so-called career. Where does the mystery come in ?
— firing ? How does the military fire ? It discharges, but you have to screw up pretty badly, and they give you plenty of 2nd chances. At a minimum, JG firing could be similar to military firing. Workers would be allowed to re-apply at a later date, but they’d have to convince the JG manager that they’d overcome the problems that caused their dismissal — sobered up, got counseling, etc..
In my ideal JG, I would take the firing thing a step further, and make the JG responsible for attempting to rehabilitate the problem employee.
— people want income, not jobs ? Some people, not all. I know lots of handicapped people who draw disability, but they’d rather work at least part time, if someone would hire them, and if they were capable of performing the task.
I know people who have inherited money or won the lottery or married someone who has money, yet they still prefer to work, at least part time.
But mostly I know people of color who can’t get hired due to discrimination, so they live on the dole. They survive, but they’re miserable.
— my ideal JG would be voluntary. If the JG is mandatory, then the JG admin should have the authority to recommend that an individual should instead get unemployment/disability if the JG is not able to place that individual — bearing in mind that placements will be limited in rural areas, and older people and disabled people will have many physical limitations that make them unsuitable for some types of work.
— I disagree that raises and promotions are necessary for motivation. My previous employer had zero raises and promotions other than the rare promotion to management. Every hourly worker got the same wage regardless of skill level or seniority. The wage was competitive for the area, so it simply wasn’t an issue.
— I’m open to having more than one skill & wage level in the JG, though I don’t view it as absolutely necessary. Not much different than the WPA or the military.
— I disagree with some that JG administration should be local or non-profit. Do you have any idea how backwards and corrupt many local governments are ? Most local non-profits are affiliated with churches and have religious baggage that employees should not have to put up with. No thanks, the JG should be administered by a Federal bureaucracy with professional management. The JG admin could assign workers to local schools and non-profits, but the employee would report to the JG admin, not to the local yokel.
We actually do have a partial JG — it’s called the military. Except that the military is restricted to young people in good physical condition who have a high school diploma and are willing to travel all over the world blowing things up. Many poor people from rural areas, where there are no job opportunities, join the military precisely because it is a JG.
If we can have a military JG, then why can’t we have a civilian JG ?
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JG is a really dumb idea.
But some MMTers will not let this go.
Beliefs many flawed mostly drive the world not logic and evidence. They are everywhere. Its a fight MMT have outside and inside. The JG being one inside example.
All the JG will do is distract non MMTers looking in from the key MMT message. Fortunately I never knew about the JG until I read about it on your site. Even though I found your site from a MMT site.
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JG, if you come around to the non-JG aspects of MMT, then you have come to believe that the basic message is that our federal govt, as a monetary sovereign, could be spending a lot more into the economy without either raising taxes or depending on borrowing. Pretty fundamental stuff whether on this blog or any related MMT blog. Further , the only constraint to that increased federal spending is the potential for adverse demand-pull inflation that might induce a wage-price spiral – basically not on anyone’s credible forecast.
With that alone, you will make mincemeat out of any deficit hawk nitwit at any cocktail party.
But then comes the tricky part – what should the govt spend that increased money on? Bailing out Wall Street again? Bridges to nowhere? Solyndra? Keeping people on unemployment and food stamps? Tax breaks for the rich? The military-industrial complex? to go to war?
Be ready. You’re in for a ‘shirt storm.’
Now, take it up a notch or two and imagine getting whatever increased federal spending through Congress. More tax cuts? More shovel-ready? Yea, right.
Now, how about block grants to local communities to get people off “the dole” and doing something productive AND a priority in their communities?
I know which of these I would prefer being responsible for selling.
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The key is the size of the govt deficit not DIRECT govt spending
So any combination of
cut direct tax
Increase pensions and benefits
cut indirect tax
Increased direct Govt spending if the people / Govt wants to go down this route
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“who fires?”
would you feel better about the JG if obama hired donald trump as THE BOSS?? i’m sure if the price is right, ol’ donald, as principled as he is, wouldn’t object at all to working for our president, as kenyan/indonesian-born as he is!!
“rodger, you’re fired!
what? wait a minute, you can’t fire me–i’m on JG!! don’t you know anything about MMT!!
“i don’t care! that kenyan/indonesian, in a stroke of rare clarity of thought, brought me in to this administration for one reason, one single reason only–to fire people like you!! so, ready or not, JG or not, YOU ARE FIRED!!”
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LOL gotta love the conspiracy theorists……
George Romney was born in Mexico. He ran for President and all legal experts agree he was qualified to serve (he ran in ’68 and legal experts then and today still agree).
My son was born in the Philippines. His CRBA from the US Embassy in Manila states he is a natural born US citizen. We applied for and received his US citizenship documents and US passport about two months after he was born (and this was just last year).
The Donald and all these other idiots continue to amaze me. If, by chance, any of you idiots are reading:
BIRTH LOCATION IS NOT THE “END ALL/BE ALL” OF NATURAL BORN CITIZENSHIP.
There are two ways to claim natural born US citizenship as per law: birth on US soil (jus soli) and/or citizenship of parents (jus sanguinis). Even if Obama was born in Afghanistan, it wouldn’t matter. Obama’s mother was a US citizen when she gave birth to him. End of debate.
But you’ll never convince The Donald…..
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also, the guy obama ran against in ’08, john mccain, apparently was born in panama. but you didn’t hear a single peep about that from that toupee-wearing fool… gee, i wonder why??
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Roger, I believe at the heart of you’re going off the rails with the JG is your envisioning it as “make work.” From there, everything else flows; from legitimate concerns (“big government” matching job seekers to jobs) to demonstrating your debating points prowess (e.g ‘ah-ha, you MMTers don’t have a single JG canon that you genuflect to and never deviate from!’).
Just try this one exercise: imagine that all or nearly all communities have needs that are highly valued,could be greatly fulfilled with low-wage workers, and these needs exceed what would be obtained even if we employed every person. With that one assumption, your critiques of JG fall to wayside.
For example, as with any employment, “willing to work” is within the context of the work that needs to get done and that is defined by the employer. If the work is not done, you cannot be employed – you are not willing to work at that job. Communities are only going to hire AND keep those who will get the work done on what the community deems as its critical needs. No workers willing to work at a particularly priority need, then the community moves on to the next priority need until there is the match with a “willing worker.” Again, the assumption is you will run out of willing workers before you run out needs.
I think others have done a pretty good job of addressing your other concerns. I do think you giving some thought to what I believe is at the heart of rejection of the JG would, however, be the most profitable.
Anyway, thanks for your critiques, it is helping to hone the argument for JG.
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The problem with JG is it’s a moving target. There really is no JG other than the words “jobs” and “guarantee.” Everyone seems to have a different idea about what the jobs are, what the guarantee is, what the pay is, etc.
Exactly what jobs are you talking about? Where do the jobs come from? Is the government just a super employment agency or do the people actually work for the government? Who actually pays the salary?
Exactly what are the terms of the guarantee? Exactly what is the pay? It’s almost as if proponents believe an omnipotent government agency magically will find (or is it create? Who knows?) jobs that pay enough to keep people out of poverty, yet don’t compete with the private sector. Or something else.
Criticizing JG is like eating Jello with chopsticks. The program keeps changing according to the whims of the sponsor.
Even worse, some beliefs are based on zero data. Among liberals, for instance, there is the belief that people do not really work for money, but rather for the satisfaction works gives them. Well, yes and no.
And I still don’t understand how JG job motivation works. In the real world, motivation to do as the boss wishes comes from three areas: Promotion, raises and firing. Somehow, JG never seems to address those three issues in a consistent way.
To all who so ardently believe in JG I ask, exactly what is JG? If you were in Congress, voting for JG, exactly what would you be voting for?
Rodger Malcolm Mitchell
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“where do the jobs come from?”
–where do post office jobs come from? where do jobs at NASA come from?
“is the government just a super employment agency or do the people actually work for the government?”
–wow, that’s a tough question. let me ask you a few even tougher questions: do all those people working at the dept. of homeland security work for the government? does a janitor at the US Treasury work for the government? does a truck driver at the post office work for the government? does a mechanic in the Army work for the government?
“who actually pays the salary?”
–who actually pays the salary of a helicopter pilot in the Coast Guard? who pays the salary of a cleaning lady at the US Geological Service? who pays the salary of a secretary at the EPA?
maybe (just maybe) it’s the term “JG” that’s tripping you up, rodger? perhaps the MMT crowd needs to phrase things a bit differently (a point i and others have made repeatedly). maybe they should just say that congress should target a certain unemployment rate (say, 2 or 3 or 4 or 5% or whatever) by ensuring that a certain number of federal jobs are available to the unemployed public at different skill levels. there’s literally a guhzillion things to do, so that’s not difficult at all.
as for the pay level, well, how is that handled NOW?? is the pay scale for postal workers in new york city exactly the same as it is for postal workers in duluth, iowa??
anyhow, the problem i think with the so-called JG is the framing of it. it’s being framed as though it’s something other that what we ALREADY have–federal government employment!! when employment in the private sector goes down, the government needs to increase employment in the public sector to pick up the slack. the government is the inverse of non-government…
there’s no need to mandate that it should be an $8/hour job, cuz the government already has its regional (and skill-level) pay scales.
anyhow, i honestly think this whole “debate” is really a non-debate!! all that the MMT crowd is advocating for (though they’re not saying it correctly) is an increase in federal employment and, if by some chance they’re not, then they should be. if that is what they’re advocating for, then, rodger, honestly, you have NO argument against that whatsoever, cuz we already have federal employees, and as for as i know, their numbers could be increasing as we speak, albeit not as quickly as MMT’ers would like.
also, state and local governments also have employees and could probably use some more. as i understand, part of what congresspeople do on those rare times when they happen to be at congress is to lobby to get more money from the nat’l budget earmarked for their state. well, that’s something you, yourself advocate (though you don’t phrase that way). so, some of that money could go towards job creation. again, that happens everyday, so there can’t be anything wrong with an increase.
“who fires?” i hear that post offices and military bases are closing down around the country. so, who’s firing those guys? oh, i know–it’s obama’s good friend, donald trump!!
or here’s an idea–you could come back out of retirement and they could hire YOU!! that way, we can all sleep well at night knowing that all those undeserving, skill-less, formerly unemployed riff-raff will get the firing they deserve so they can get their generous unemployment checks, cuz, like you say, they didn’t really want to work anyway–they just want the money…
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Dan Lynch and I told you what a good JG is, Rodger – The military. Re-institute the draft.
You are probably very right when it comes to civilians. In my experience, most civilians are relatively lazy and unappreciative. Yet the laziest troop I’ve ever met still beats out the average civilian.
When we talk about JG, I think we need to accept a few universal (more like “practical”) truths:
– No JG, however well thought out, will achieve full employment.
– No JG, however well thought out, will provide the perfect job.
– No government program will magically fix what the old ones couldn’t.
– But we still need something done.
Enter military service:
– Re-institute nationwide conscription.
– Give people the option to stay in during economic calamity.
– It is not a menial, undignified, and/or unnecessary job.
– “Firings” are rare yet motivation is not a problem.
– Wages are set.
The machinations are already in place. We have the administrators, rules, supplies, etc. A few additional controls would have to be put in place (to curb draft dodgers/frivolous exemptions and deferments), but not that many.
This will not reach full employment….but it will get close. It will not be everyone’s dream job….but it will be an option during bad economic times. There will still be some of the inefficiencies often associated with government programs…..but not near as much; the military is pretty disciplined.
We have legions of young people out of work, and while military might not be their dream position, it’s a step up from unemployment. Requiring a draft would at least make it fair. “Everybody has to report for a two year tour on active duty before their 25th birthday.” Most of them are supremely qualified. All you need to be is healthy and patriotic.
The only major thing needed is political will. Troop levels and service requirements are set by Congress. They can be changed.
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I assume you’re aware that “unemployed” includes old people, too???
Anyway, I thought JG was supposed to be like a temp job that could serve as bufferstock. Ah, but the army is just another variation on that popular JG theme — the plan that nobody understands, but everyone loves.
This becomes more and more humorous. I am criticized for criticizing JG, but when I ask people what JG is, they tell me details aren’t important. They just love JG.
“Well, I’ll have to operate on you to fix your illness.”
“What kind of operation, doctor?”
“Don’t ask me for specifics. I’ll leave that up to my nurse.”
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“They just love JG.”
i know what will turn you around, rodger–a slick advertising campaign.
i can see it now–imagine a scantily-clad girl sitting in a provocative pose at a desk. on the desk there’s a plaque, “JG Processing Secretary,” and behind her there’s a mountain of papers. her boss has come in to talk to her about it, but he’s clearly beguiled by her scantily-covered cleavage. and below the scene, there’s the caption, “we LOVE the JG–you will too!”
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I already addressed those points Rodger – while we need to do something, we need to stop assuming JG will solve all woes.
Yes – old people likely can’t serve, but neither can severely disabled people, regardless of age. Old people aren’t being hired in droves in the private sector either. No program, public or private, is going to employ everyone. It’s impossible. (However, there are cases of septuagenarians being called up to active duty.)
And I already addressed the buffer stock comment – it’s only a two year term of service. People would be in and out depending on the economy. Again, a few additional controls (like a clause in the enlistment contract) can do wonders. And prior service individuals could be given the option to rejoin during economic calamity, regardless of any break in service. In fact, the draft would be good in that respect as training wouldn’t be required – they’d have already done it.
I understand critiquing something that’s obviously messed up. but I’m getting the feeling you’re throwing out the baby with the bath water.
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salsabob,
Exactly how do your “block grants” work. What are the projects? Who plans them? Who receives the money?
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not a 100% sure, but it might work like YOUR “block-grant,” rodger.
https://rodgermmitchell.wordpress.com/2012/04/14/which-presidential-candidate-offers-the-better-plan-for-closing-the-income-gap/
“5. Send a population-based stimulus payment to each state, so that the monetarily non-sovereign states can afford to improve their infrastructures, education and police and fire protections.”
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That’s what you mean by “block grant”???
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i don’t wanna speak for salsabob, but what you were referring in your post used to be called “block-grants” a long time ago.
in fact, the only intelligent thing that ignoramus from texas, rick perry, had to say during the republican presidential debates was that he wanted to reinstate the nixon-era block-grants to the states. funny thing was that each time he said it, it was passed over in silence–not a single candidate nor panelist commented on it. no surprise…
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The problem with JG is it’s a moving target. There really is no JG other than the words “jobs” and “guarantee.” Everyone seems to have a different idea about what the jobs are, what the guarantee is, what the pay is, etc.
There is no moving target with respect to the fundamental idea of the JG. As a policy choice to provide not just most but all interested participants in society with an opportunity to earn an income, there is no variance of opinion. JG advocates all believe the JG is the best way to fully eradicate involuntary unemployment while concurrently increasing price stability, business cycle stability, fairness in the system, etc. They agree on the big picture benefit and need for a JG. Details about the exact implementation of the JG however are fluid. Does every detail need to be worked out before determining it is a program that should or should not be supported? Why can’t there be some flexibility at this point in the program’s conception?
Criticizing JG is like eating Jello with chopsticks. The program keeps changing according to the whims of the sponsor.
Try to not fixate so heavily on the trees and instead focus on the big picture. If I were you and I were trying to rebut the JG, I would explain why I believe full employment is not a goal worth attempting to achieve. That seems to be the real fundamental difference between your position and MMT. MMTers accept the Fed’s dual mandate (or something close to it) as a worthwhile goal. I suspect this is also true of most economists. You have stated previously you do not believe in FE. Why not then criticize the JG as a giant waste of time by trying to solve a problem that doesn’t need solving? I’d like to hear what your argument for this is.
Even worse, some beliefs are based on zero data. Among liberals, for instance, there is the belief that people do not really work for money, but rather for the satisfaction works gives them. Well, yes and no.
Let’s agree not everyone wants a handout. A lot of people take pride in earning an income. There is a certain confidence and feeling of accomplishment which comes from being productive. There is some level of societal acceptance and honor that comes with not being perceived as a bum. Most people want an opportunity to earn. If the natural operations of markets cannot provide this opportunity to everyone interested in it, why not have the government create it? Government isn’t perfect, government needs accountability, but government doesn’t have to be a deterent from positive outcomes either. If it can be used to give people opportunities without it becoming some bureaucratic nightmare, not only is involuntary unemployment virtually resolved, but price stability is increased, business cycle waves are decreased, production increases, attitudes and quality of life improve, etc.
And I still don’t understand how JG job motivation works. In the real world, motivation to do as the boss wishes comes from three areas: Promotion, raises and firing. Somehow, JG never seems to address those three issues in a consistent way.
You could still have promotion, e.g. individuals could move from a JG job to a private sector job, all within the same company. This would be similar to how many corporations use temp workers. You could still have firing; the JG is for the involuntarily unemployed. This presumes they want to work and therefore will perform what their duties require.
Robert Rice
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Robert, just curious. Have you ever run a company?
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We’ve had a bunch of really long responses — too long for me to answer in any detail, and clearly, advocates of JG will continue to misstate my words, so to make things simple, I’ll try to summarize all the advocates’ comments:
“I have no idea how JG works,
but that doesn’t matter.
I’m completely in favor of it,
because I love those words ‘JOBS GUARANTEE.'”
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Roger says he has no idea how JG works. I don’t either. In fact, I don’t understand MMT. It looks to me like academicians are twisting simple ideas into forms so abstruse than no one can understand them; not even the academicians themselves. Certainly bankers and bond traders in the real world have no interest in MMT. I say that if an idea cannot be stated clearly and succinctly, then it’s not worth stating. (Just my opinion of course.)
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Richard, how’s this:
Because a Monetarily Sovereign government has the unlimited ability to create its sovereign currency, it never needs to tax or to borrow.
Everything in MMT and Monetary Sovereignty follows from that one statement. Clear and succinct enough?
Rodger Malcolm Mitchell
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Yes Roger, quite clear and succinct. My point is that MMT academicians use endless words to say the exact same thing, with ninety percent of their blather being arcane gibberish and academic argot. To me this is so pointless and annoying that I simply ignore MMT academicians. Elitists don’t listen to them. Neither do the masses. So what use are they?
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Golfer,
Of the 15 million officially “unemployed,” 9 million have been unemployed for more than 15 weeks and 5 million have been unemployed for more than 27 weeks. I don’t know whether they, their bank, their landlord and their grocer consider them “fired” or “laid off.”
The easiest thing for an employer to do is simply to let someone go because they simply aren’t needed. No need to document reasons, which could lead to a lawsuit.
So with a jobs guarantee, people will feel free to come to work, and play video games all day. When they are fired, laid off, let go or released, they are guaranteed another job. Right?
Anyway, JG guarantees a job to everyone. So, if you’re fired “for cause” (whatever that means), does JG give you another job?
Don’t answer, because you don’t know. No one knows. It’s another JG detail wherein lies a devil. Think of all the various alternatives, and their implications, and you’ll see the difficulty.
The good news: Implementing and monitoring all aspects of JG would require a massive federal staff, which in itself, would reduce unemployment. Hey, maybe JG isn’t so bad after all. 🙂
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hey, now, there you go, rodger!! now, you’re starting to get it!!
ok, but seriously, here’s a humble suggestion for one of your future “think-pieces,” which could be something like this:
“given the shellacking i’ve taken in the last week or so, apparently a lot of people out there believe in a JG, or as it used to be said a long time ago, that the federal government, as the currency issuer, should be the Employer of Last Resort.
but, i wonder, since the federal government is in fact the currency issuer, shouldn’t they be the Employer of FIRST Resort? what would be the economic consequences if they were?
or, have i (and everyone else out there in the MS/MMT/MMR blogosphere or whatever you wanna call it) missed something and they are in fact the EFR instead of the ELR? and how would we know, one way or the other?”
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again, as for your firing issue, i stand behind my suggestion of hiring donald trump!!
of course, nobody wants to get fired, but they especially don’t want to get fired by a pompous fool who’s wearing a wig!!
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Rodger,
You’re right about one thing, since JG doesn’t exist yet (in the US – there have been similar programs in other countries), nobody knows the details of how it will work. The proponents don’t always agree on the details. It will have to be worked out, some of it by trial and error.
Before the first earth orbit, nobody knew how we would get astronauts to the moon and back, but that didn’t stop us from going ahead with the project.
If not JG, how should we treat the unemployed when the economy is doing the best that it can, and millions of able, willing, qualified workers are still unemployed?
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Going to the moon was the goal. I disagree that our nation’s goal should be to give everyone a job, which I explain in the post.
I don’t know what you mean by, “the economy is doing then best it can,” but before I embarked on JG, I’d begin doing at least the first this 8 items (below) first:
1. Eliminate FICA (Click here)
2. Provide free Medicare — parts A, B & D — for everyone, from cradle to grave.
3. Send every American citizen an annual check for $5,000 or give every state $5,000 per capita (Click here)
4. Provide long-term nursing care insurance for everyone
5. Provide free education (including post-grad) for everyone
6. Provide a salary for everyone attending school (Click here)
7. Eliminate corporate income taxes
8. Increase the standard income tax deduction annually
9. Increase federal spending on the myriad initiatives that benefit America
Then, if unemployment still were at unacceptable levels (doubtful), I’d find out why, and then work on curing the causes.
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Rodger,
Maybe I misinterpreted your statement. Here’s what you actually wrote:
“Joe, just before the Great Depression, unemployment was about 4.5%, which many economist feel is at the very bottom of the buffer stock a healthy and growing economy should have. ”
And here’s what I asked you about it (above), which you haven’t answered:
“You said in WR’s blog that 4.5% unemployment that prevailed just prior to the Great Depression was considered the best that an economy can do. Is that different today? By properly managing the deficit (as MMT says we should do), how low an unemployment rate can we achieve? And what do we do about those still unemployed, since it is through no fault of their own and their disease cannot be fixed by any resolution of their personal problems, because the economy is already doing the best it can do?”
I think all economists, including MMT economists, believe that even an overheated economy, with demand-pull inflation occurring, would not produce 0% unemployment. It seems impossible that skills and job requirements would match right down to the last individual worker. As full employment is approached, there would be shortages of some skills, for which employers would bid up the price, along with a surplus of others. When all your 9 points are implemented, what is your theory for dealing with the surplus skills?
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I have to agree with Roger’s points. Before implementing a Jobs Guarantee, lets fix the economy. Then, if we still have a problem with unemployment work on that. I’m thinking that free healthcare, free education, and $5,000 per year per citizen will put a lot of money into the bottom of the economy.
After paying down their debts, most people will start spending that money on things they want – increasing demand. The increased demand will encourage sellers to order more product from distributors, distributors to order more product from manufacturers, and manufacturers to order more product from the producers of their raw materials or other inputs. The whole chain, from beginning to end, will need to hire more laborers (reducing unemployment) to support the additional business. The increased incomes to those laborers will allow them to spend more on additional things they want.
Depending upon inflation, that $5,000 per year may have to be adjusted to retain it’s benefit to the economy.
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All of MMT agrees to fix the economy (by increasing the deficit). That is not the issue.
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Nathan,
You may feel you “addressed” those issues, but to my thinking you did not “solve” those issues. People already can join the army if they wish, but forcing people into the army is a ridiculous solution to unemployment.
The army is a lifestyle most people despise and only a limited number of people enjoy — uprooting families, forced travel, war danger — and all this to cure unemployment?? It’s like chopping off everyone’s hand to cure nail biting.
Anyway, is your draft-based JG the same as anyone else’s JG? You’re simply making my point that there is no JG. The only thing the various proponents of JG have in common is the words “jobs” and “guarantee.”
Other than that, there is no viable, coherent plan. It’s just a bunch of pie-in-the-sky.
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Golfer,
The term “surplus skills” may be misleading, but let’s take it down to the extreme and say, there is one unemployed person left in America, and she is a 60-year-old, northern-Montana physicist specializing in quantum chromodynamics.
What shall we do about her? Find her a job waiting tables in the local diner? Digging a ditch for a new sewer? Delivering mail? Find her a job as a physicist in southern Montana?
O.K., let’s not be that extreme. Let’s say that the unemployment rate is 1%, which computes to about 1.6 million people, spread all over America, having a wide variety of skills. What shall we do about them?
Will JG be able to locate jobs:
–reasonably near their homes?
–in private industry?
–matching their skills?
And in the unlikely event JG is able to handle such a monumental task, will these people replace other people, who currently work in these jobs?
After all, if I’m a car dealer, who needs a salesman, and the government offers to pay a salesman’s salary, why should I hire a salesman whose salary I need to pay? Maybe I’ll fire one of my salesmen and hire a JG person.
People tell me I shouldn’t worry about such details, because if we just implement the program, the details will be solved — something like the goal of going to the moon. In the beginning, no one knew how to do it.
But I liken JG as jumping in a moon-bound rocket, before you even know how to get there, and hoping it all will work out.
Bottom line, rather than having people waste hours on ill-fitting jobs, and other people waste hours trying to fit people to jobs, I’d rather continue unemployment insurance for two years, and allow people to spend hours looking for work. At least we know how to do that.
But we have no idea how to do JG.
Rodger Malcolm Mitchell
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If an unemployed physicist wants JG (she would still have the option to take unemployment insurance, if JG is added to the current crop of programs) then she would do what anyone in JG would do: work for a charity organization such as the local food bank.
Of course, if she is the last unemployed person, the food bank is probably no longer in existence, and we could just give her the $8 an hour.
The 1.6 million scattered across America would work in about 160,000 different charities in their local communities, doing things that are done today by volunteers, for which labor is in short supply because the wage for a volunteer is $0. They would be supervised by permanent employees of the charity, who are supervising the current volunteers.
Some have suggested that JG be a government-subsidized job at a private industry employer, as you seem to envision. There are lots of problems with that, the most obvious being that the employer might lay off his “regular” employees and hire JG employees in their places. There are theoretical problems with it, too. If employers take subsidized JG workers in addition to their regular work force, their output will go up. But, the reason they didn’t hire regular employees to increase output is that they can’t sell the increased output!! Then what happens?
“What would they do?” is the thorniest question about JG. You’ve assumed probably the worst possible answer.
But I still don’t see your answer. What would you do after 2 years, when your unemployment insurance extension expires? (JG doesn’t expire.) What do they do to support themselves when unemployment insurance is insufficient?
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Golfer
If the government implements all nine of my suggestions, and despite that, there remain a few people who used up their two years of unemployment insurance, but still cannot find a job in this booming economy, I would pay them a salary to go to school. See: https://rodgermmitchell.wordpress.com/2010/07/17/salary-for-attending-school/
That’s my JG.
Rodger Malcolm Mitchell
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So, a rotating buffer stock of involuntary unemployed at some level (1%? 4.5%?) is OK with you, as long as there is unemployment insurance, and it need not provide a “living wage”?
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Right.
Not sure how “living wage” is defined, but last I heard, JG was at minimum wage — or not. No one knows.
Anyway, there is no program, not even JG, that will take unemployment down to 0.
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I guess it depends what “unemployment” means. In the context of JG, it means “involuntary unemployment” – someone who wants a job and does not have one. Retired people, underage children, or others who don’t want a job don’t count.
JG does aim to reduce involuntary unemployment to 0%. Every last person.
A JG “job” would not be like private sector employment, where you go to the same employer’s place of business every day. On any given day, a JG worker might be assigned to one charity or another, or to training, or to resume polishing, or to job search, and a day’s assignment will often be different from the previous day’s assignment. Continuity is not prohibited, and may occur more or less naturally, but is only a secondary priority.
Of course, that’s only my idea of what JG would be like. Others have expressed different ideas, but nobody who has seen mine has said “No, you can’t let them work in a charity”, or “No, you can’t let them do training or resume polishing”.
Why would it not be possible for everyone who shows up for JG to be “employed” for that day doing one of these things?
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Rodger — I really like your approach to Monetary Sovereignty. From where I sit, it appears, however, that you have missed an important point about the JG. At least according to Randy Wray, the JG is a “mop-up” operation to be implemented AFTER all the nine points you have recommended, or something like them. I don’t remember if he details the points like you do, but specific ideas are an important addition to the debate. I think all of yours would be important and helpful.
If all of your nine points as shown above were implemented, how close to full employment do you think that would bring us? It would certainly increase aggregate demand and create the need for companies to hire. Perhaps it could bring us within one or two percent of “full employment” (allowing for transitional or frictional unemployment, of course). Then the JG would not involve a large number of people. And, it seems that some of your objections become minor if the JG is a relative small program.
I also happen to disagree that the concept is as undefined as you seem to think, but that is an opinion.
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From a timing standpoint, I don’t know how it’s possible to “mop-up” AFTER the nine points, which in themselves would could not be implemented instantly.
In response #20, I discussed a “relatively small” JG.
After tons of discussion, I’m still unclear about whether JG is a government employment agency or the government actually hiring people or a WPA program in which the government creates projects for which people are hired. Three different approaches. Which do you visualize?
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I think all three could be tried to see which is the most effective. Perhaps one or more could be used at the same time or in different localities. My personal preference is the idea of using existing, local non-profits to act as the employment agency, and possibly the employer because they know local needs the best. Funding cold be done on a block-grant basis. But, I’m not well-versed enough to work out all the potential benefits and limitations on each of these options.
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My most recent post involved Rube Goldberg machines. I gave the euro as an example. Perhaps I should include the various plans for JG as another Rube Goldberg machine.
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Government actually hiring people to work in government (or on WPA-style projects) makes no sense as a JG implementation. It is akin to your 9 points to improve the economy. Do it because the project needs to be done, not to provide jobs doing something that doesn’t need to be done. (And, btw, if the economy is at full employment and this project will remove real resources from the private sector, then you also must be willing to raise taxes in order to do this project.)
The Federal government’s role in JG is simply to provide the money. Local governments, and maybe existing private sector agencies, will likely be involved in managing the “employment agency” aspects of matching people to jobs.
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If we get real unemployment/underemployment down to 1% or 2% – I think our economic strength would be sufficient to skip the jobs guarantee and simply provide an income guarantee. It would be much simpler and meet the actual need – the need to afford food, clothing, housing, transportation, and perhaps some extras.
For the income guarantee, the devil is in the implementation – at what level do we guarantee the income? And what are the consequences of implementing that decision?
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John O’Connell,
First, consider the logistics of continually finding jobs for millions of people all over America. Stop and think of what being the employment agency to the nation really involves.
Not only must you keep in continual communication with all possible employers in all neighborhoods, but you must investigate them and also investigate every applicant. Heaven forbid you send a woman to a place where she is attacked, or send a pedophile to an orphanage.
This is not simply a matter of opening the phone book and making a call.
Then consider the jobless people, themselves. According to Randy Wray, JG’s leading proponent, it would pay minimum wage. How many people want the kind of rotating jobs you’re suggesting, while receiving minimum wage?
You’re not going to get many executive types who would rather earn minimum wage serving soup, than look for a real job.
Randy’s response is something like, “Well if they don’t want the jobs we offer, they no longer are involuntarily employed.” (Not a direct quote)
Problem solved. Right? So, how about offering everyone a job wrestling a lion. No one would take it, and that solves the problem of involuntary unemployment. 🙂
Yes, the words “job guarantee” sound wonderful on the surface, but when you dig into the details, it gets worse and worse.
Hey, if we can send men to the moon, we can send men to Mars. Right? Except for a few details.
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“First, consider the logistics of continually finding jobs for millions of people all over America. Stop and think of what being the employment agency to the nation really involves.
Not only must you keep in continual communication with all possible employers in all neighborhoods, but you must investigate them and also investigate every applicant. Heaven forbid you send a woman to a place where she is attacked, or send a pedophile to an orphanage.”
It’s being done already, by private sector companies. I don’t know anyone who would advocate doing it centrally for the entire nation. It should be done locally. What happens to Monster.com or Linkedin if a woman answers their ads and gets attacked? Or if a pedophile applies for a job in an orphanage? What happens if one volunteer (or supervisor) at Habitat attacks another? The employers would have a say in who they take, and if they have requirements for background checks or whatever, they can do those for JG people the same way they do for their other volunteers. Once JG is established, I’ll bet the local charities will be glad to contact their local JG branch to ask for workers, the JG administration won’t have to go find the employers.
“How many people want the kind of rotating jobs you’re suggesting, while receiving minimum wage?”
Probably a lot whose unemployment benefits have run out, or who need the health insurance or child care services that JG provides, and can’t afford it.
“You’re not going to get many executive types who would rather earn minimum wage serving soup, than look for a real job.”
I agree with Randy. If they don’t want a JG job, they are free to take unemployment insurance benefits, and if they have been successful executives, probably don’t even need that. They can live off their savings until they find another executive job, if they prefer that approach. Randy is a self-described “progressive”, and as such I don’t think he loses much sleep over those executives, he is concerned with the long-term unemployed.
(BTW, serving soup IS a “real job”. The private sector employs lots of people serving soup. It would be tough to take your wife to her anniversary dinner without them 🙂
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“It’s being done already, by private sector companies.”
You mean the thousands upon thousands of employment agencies all over America? Those offices, where people go to visit, are interviewed and have their credentials checked, before they are sent out for job interviews? Is that what you visualize?
There are millions of unemployed. Do you have any idea whatsoever, how many people local charities (excluding all religious charities, of course) would want to hire? Just asking.
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Lots. The times I’ve been involved, they’ve taken 50 or so volunteers at a time from one employer, and they ask for many more than they ever get. Of course, as the economy improves their demand for workers goes down along with the number of unemployed workers.
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