Ben Bernanke: “The U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.”
We have written often about MMT’s “jobs guarantee” — the guarantee that the federal government either will give or find a job for everyone in America who wants a job.
The difference between “give” and “find,” is the difference between working for the federal government and working for private industry or local governments. In the former, the government is the employer of last resort. In the latter, the government is the employment agency of last resort.
There are two beliefs underlying the jobs-guarantee:
- Jobs are hard to find, which is why people are unemployed
- Working for money is morally superior to being given money
Both beliefs are wrong. The facts are:
- Jobs are not hard to find. There a many millions of jobs available. Look in any newspaper and you will see hundreds of jobs. Go online and you will see many thousands of jobs.
The problem is, they are the wrong jobs. Either they are in the wrong location, require the wrong skills, or simply are not something you want to do.
- Working for money neither is moral nor immoral. It simply is working to obtain money.
Someone who wins the lottery, or is born to wealthy parents, or who receives a multi-million dollar income because his stock options rose, is no more or less moral than a ditch digger.
The rich simply want the non-rich to believe there is something morally wrong about the non-rich doing what the rich do, namely receive money from the government or other sources for doing little-to-nothing.
Sadly, the not-rich have been brainwashed into adopting the notion that when poor people receive money for which they haven’t worked, they are considered “sloths who are gaming the system,” or termed “food stamp mamas.”
But when the rich receive money, wealth, and power for essentially “being there,” that is their manifest destiny and moral right.
This is the moral nonsense that has been adopted by MMT with their “jobs guarantee.”
You don’t work for the love of work, nor do you work because it is morally right. You work to obtain money, so you can buy and do the things you really want to do.
Sure, you may like your job. But you do not prefer working to being on vacation, taking a free trip around the world and living in luxury.
Be honest. You look forward to weekends rather than to Mondays (unless you are paid on Mondays).
That said, the jobs guarantee is an idea only a politician or a university economist could love. It is completely, unworkable in the real world:
1. Exactly who in the government will find jobs for everyone — in NY city, in the empty reaches of North Dakota, in an island off the East Coast — jobs for each person who wants one?
I challenge anyone to describe the bureaucracy and the bureaucrats who can handle that assignment in every village and hamlet in America.
Or will millions of people be required to move away, to some other location from the one in which they wish to live?
2. Who exactly will:
–Find or create available jobs everywhere
–Promote, demote, and switch jobs everywhere
–Fire if need be, the millions of people who should be fired for the government’s firing criteria?
Geographically, where will all of the above be done?
3. Who exactly will find jobs for the people who are fired for each of the different causes? What are the criteria for being fired and how will those criteria be enforced?
4. What will workers of all levels be paid? Minimum wage (to lower America’s average wage) or above minimum wage (to compete with the private sector)? Will everyone be paid the same, or will workers be paid differently for different work?
5. What about healthcare, maternity leave, vacation days, IRAs and myriad other benefits? Where will those benefits come from?
6. And most important, will these be real jobs or “bullsh*t” make-work jobs (http://bit.ly/2JMFXjU)
If people are hired only because they need jobs, rather than because the job needs people, what prevents the jobs from being make-work?
Unfortunately, the public has not thought deeply about the jobs-guarantee plan. They just like the notion of a guaranteed job.
Already, a jobs-guarantee idea polls pretty well
Published: May 2, 2018
Sanders, other potential Democratic White House hopefuls back idea
By Robert Schroeder, Fiscal Policy Reporter. Reuters
Does the prospect of a government-guaranteed job appeal to you? You’ve got company: nearly half of U.S. voters like the idea, according to a recent poll.
The proposal has been getting some traction on the left lately, after being floated by think tanks and embraced by likely Democratic presidential candidates including Sens. Cory Booker, Kirsten Gillibrand and Bernie Sanders.
In a new Rasmussen Reports poll, 46% said they favored such a program. Sanders, according to the Washington Post, backs a version that would see local and state governments offer proposals for public works projects.
Workers would be hired for at least $15 an hour with paid family and medical leave.
Whoops! Now the plan has morphed onto “local and state governments” most of which are broke or overtaxing their residents.
And what is this about “public works projects”? Will these be ditch-digging jobs for former executives, women, the infirm and others who have no background or desire in this area.
Or are we in the “beggars can’t be choosers” area, where if you want money, you must labor, because for the poor, labor is moral?
There are numerous practical questions about a jobs-guarantee plan, including its cost. In one proposal, the Center on Budget and Policy Priorities estimated an annual cost of $543 billion for the creation of 9.7 million full-time jobs.
The above paragraph is nonsense for two reasons:
- Cost is irrelevant to a Monetarily Sovereign government that can create unlimited amounts of its own sovereign currency.
- No one on earth can come up with a $543 billion number for creating 9.7 million full-time jobs. Those are numbers completely snatched out of the air.
So, the Center on Budget and Policy Priorities (who?) said it would cost $55,979.38 to create and implement and supervise each of various unknown jobs in unknown locations for an unknown length of time? That is beyond ridiculous.
A plan like Sanders’ is dead on arrival as long as Republicans control Congress.
It should be dead on arrival no matter which party is in control. It is ill-considered, uncontrollable nonsense.
It would be far simpler and far more beneficial to more people to institute the Ten Steps to Prosperity (http://bit.ly/2JLsg4E)
Let us begin with Step #1, straightaway.
Rodger Malcolm Mitchell
Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell
The most important problems in economics involve the excessive income/wealth/power Gaps between the have-mores and the have-lesses.
Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics.
Implementation of The Ten Steps To Prosperity can narrow the Gaps:
Ten Steps To Prosperity:
1. ELIMINATE FICA (Ten Reasons to Eliminate FICA )
Although the article lists 10 reasons to eliminate FICA, there are two fundamental reasons:
*FICA is the most regressive tax in American history, widening the Gap by punishing the low and middle-income groups, while leaving the rich untouched, and
*The federal government, being Monetarily Sovereign, neither needs nor uses FICA to support Social Security and Medicare.
2. FEDERALLY FUNDED MEDICARE — PARTS A, B & D, PLUS LONG TERM CARE — FOR EVERYONE (H.R. 676, Medicare for All )
This article addresses the questions:
*Does the economy benefit when the rich can afford better health care than can the rest of Americans?
*Aside from improved health care, what are the other economic effects of “Medicare for everyone?”
*How much would it cost taxpayers?
*Who opposes it?”
3. PROVIDE A MONTHLY ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA (similar to Social Security for All) (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB (Economic Bonus)) Or institute a reverse income tax.
This article is the fifth in a series about direct financial assistance to Americans:
Why Modern Monetary Theory’s Employer of Last Resort is a bad idea. Sunday, Jan 1 2012
MMT’s Job Guarantee (JG) — “Another crazy, rightwing, Austrian nutjob?” Thursday, Jan 12 2012
Why Modern Monetary Theory’s Jobs Guarantee is like the EU’s euro: A beloved solution to the wrong problem. Tuesday, May 29 2012
“You can’t fire me. I’m on JG” Saturday, Jun 2 2012
Economic growth should include the “bottom” 99.9%, not just the .1%, the only question being, how best to accomplish that. Modern Monetary Theory (MMT) favors giving everyone a job. Monetary Sovereignty (MS) favors giving everyone money. The five articles describe the pros and cons of each approach.
4. FREE EDUCATION (INCLUDING POST-GRAD) FOR EVERYONE Five reasons why we should eliminate school loans
Monetarily non-sovereign State and local governments, despite their limited finances, support grades K-12. That level of education may have been sufficient for a largely agrarian economy, but not for our currently more technical economy that demands greater numbers of highly educated workers.
Because state and local funding is so limited, grades K-12 receive short shrift, especially those schools whose populations come from the lowest economic groups. And college is too costly for most families.
An educated populace benefits a nation, and benefitting the nation is the purpose of the federal government, which has the unlimited ability to pay for K-16 and beyond.
5. SALARY FOR ATTENDING SCHOOL
Even were schooling to be completely free, many young people cannot attend, because they and their families cannot afford to support non-workers. In a foundering boat, everyone needs to bail, and no one can take time off for study.
If a young person’s “job” is to learn and be productive, he/she should be paid to do that job, especially since that job is one of America’s most important.
6. ELIMINATE FEDERAL TAXES ON BUSINESS
Businesses are dollar-transferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the federal government (the later having no use for those dollars). Any tax on businesses reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all business taxes reduce your personal income.
7. INCREASE THE STANDARD INCOME TAX DEDUCTION, ANNUALLY. (Refer to this.) Federal taxes punish taxpayers and harm the economy. The federal government has no need for those punishing and harmful tax dollars. There are several ways to reduce taxes, and we should evaluate and choose the most progressive approaches.
Cutting FICA and business taxes would be a good early step, as both dramatically affect the 99%. Annual increases in the standard income tax deduction, and a reverse income tax also would provide benefits from the bottom up. Both would narrow the Gap.
8. TAX THE VERY RICH (THE “.1%) MORE, WITH HIGHER PROGRESSIVE TAX RATES ON ALL FORMS OF INCOME. (TROPHIC CASCADE)
There was a time when I argued against increasing anyone’s federal taxes. After all, the federal government has no need for tax dollars, and all taxes reduce Gross Domestic Product, thereby negatively affecting the entire economy, including the 99.9%.
But I have come to realize that narrowing the Gap requires trimming the top. It simply would not be possible to provide the 99.9% with enough benefits to narrow the Gap in any meaningful way. Bill Gates reportedly owns $70 billion. To get to that level, he must have been earning $10 billion a year. Pick any acceptable Gap (1000 to 1?), and the lowest paid American would have to receive $10 million a year. Unreasonable.
9. FEDERAL OWNERSHIP OF ALL BANKS (Click The end of private banking and How should America decide “who-gets-money”?)
Banks have created all the dollars that exist. Even dollars created at the direction of the federal government, actually come into being when banks increase the numbers in checking accounts. This gives the banks enormous financial power, and as we all know, power corrupts — especially when multiplied by a profit motive.
Although the federal government also is powerful and corrupted, it does not suffer from a profit motive, the world’s most corrupting influence.
10. INCREASE FEDERAL SPENDING ON THE MYRIAD INITIATIVES THAT BENEFIT AMERICA’S 99.9% (Federal agencies)Browse the agencies. See how many agencies benefit the lower- and middle-income/wealth/ power groups, by adding dollars to the economy and/or by actions more beneficial to the 99.9% than to the .1%.
Save this reference as your primer to current economics. Sadly, much of the material is not being taught in American schools, which is all the more reason for you to use it.
The Ten Steps will grow the economy, and narrow the income/wealth/power Gap between the rich and you.
50 thoughts on “The MMT Jobs Guarantee con job”
Well said, Rodger, and I agree with you that the MMT JG is a “con.”
If MMT merely said “we propose creating make-work dead end jobs that pay starvation wages and have all kinds of restrictions on who is eligible,” I might go along with that, with the understanding that some people would benefit from those crappy jobs just as some people benefited from the New Deal job programs.
But instead, MMT promises $15 an hour, no restrictions on who is eligible, and most of all, they promise jobs that match your skills. As you point out, this fairy tale is coming from university economists with zero real world experience.
No one who lives in the real world believes such a program is practical or politically feasible.
At first, I fell for their con. It sure would be nice to never have to worry about being unemployed or being stuck in a misfit job. But I kept asking MMT WHAT would I be assigned to do in a JG? WHERE would I be doing it? HOW would I get there? And they could never answer those three simple questions. I came to realize that MMT is ivory tower types (with a few finance types thrown in) who have never had a “real” job in their lives. The JG is just a game to them. MMTer’s themselves have no intention of digging ditches or picking up trash. They imagine the JG for “other people,” not for themselves, so it’s not their concern if a JG turns out to be low wage dead end jobs.
Meanwhile, a couple of politicians have seized on the JG as a way to generate some publicity and enthusiasm. Those politicians know full well that an MMT-style JG is a dead-on-arrival in Congress, so those politicians are conning us, too.
Full employment is a worthy goal, but there are other ways to achieve full employment. Increasing deficit spending, i.e. “functional finance,” would be the simplest way to go about it. But MMT can only say “JG-JG-JG, la-la-la I can’t hear you!” I’ve lost a lot of respect for them.
Two groups puzzle me these days:
1. The people who support Donald Trump
2. The people who support JG
So, I guess that together, the majority of people in America puzzle me. 🙂
Do you know of Neil Wilson?
Here is a take on Basic income and JG.
View at Medium.com
Does he refer to what you see as a basic income?
The problem with Jobs Guarantee is that it is unworkable. The problem with Basic Income is that it is basic.
i think we need both. When circumstances are poor due to injury or illness we need a Basic Income, which takes the place of a invalid pension etc. Otherwise we need a job.
Having a job is very popular! Governments are the responsible party to find employment since in levying tax they created unemployment. Governments can make work that will give full employment. Remember most jobs are for looking after each other, so AI won’t take over.
Your assertion that they will be shit jobs is looking backwards at the past. It doesn’t have to be that way. Also if you don’t want to work you don’t have to. Up to you.
There is only one barrier to a JG and that is the eventual exhaustion of resources to purchase. That affects everybody and every credo.
The JG will set the basic living wage for the whole community.
The BI will set the standard of remuneration.
It will not lead to runaway inflation.
“Your assertion that they will be shit jobs is looking backwards at the past. It doesn’t have to be that way. Also if you don’t want to work you don’t have to. Up to you.”
What is your plan for providing “non-shit jobs”? And your comment about not having to work if you don’t like the job or don’t want to work, is exactly the problem with JG. It provides jobs, that people may or may not want, rather than benefits that people do want.
And so far as “eventual exhaustion of resources to purchase,” please explain how that works. I’ve never seen it in all of human history.
Rodger, starting with your last remark; it is an end of civilization event, probably. We “cannot have infinite growth in a finite world” is a comment you surely have heard. Growth, the life blood of our economy is doomed to stop. The idea of an alternative economy, the circular economy, is nonsense as the 2nd law of thermodynamics is unchangeable. Everything we do creates waste.
Since the wealthy only have eyes for profit they will not attempt to stop the growth addiction. So basically we will crash.
Then money will be in trouble. We only create money by spending to buy stuff.”stuff” is not available or is too scarce to provide for billions of us humans.
This is not something we willingly wish to discuss. But we will consume everything possible in the frantic race to stay alive another day. We are a locust species. Survivors will have no low hanging fruit to restart on. Money will be the least of their worries. In the meantime we might as well try to get things right.
I explained earlier to Dan Lynch my position on the rest.
“We “cannot have infinite growth in a finite world”
Got it: Nothing lasts forever. The question is: What shall we do from now until forever?
What’s your suggestion?
Rodger, Did you get my comment regarding your question about what to do. It should have appeared by now. It was my 2nd attempt.
If you are trying to establish credibility, Neil Wilson is not the way to do it.
Having a CAREER job is very popular, but how many Americans want a temporary junk job? Not me. Does Neil Wilson want to dig ditches or pick up litter? No. JG advocates want junk jobs for OTHER PEOPLE, not for themselves. Hypocrites!
John, you have not addressed the 3 fundamental questions about the JG:
— WHAT would I be assigned to do?
— WHERE would I be doing it?
— HOW would I get there?
If you get around to answering those questions, bear in mind that JG work cannot compete with the private sector. It cannot duplicate existing government jobs like road maintenance or park maintenance. It cannot be something that needs to be done on an ongoing basis, like child care or elder care because then who would do those jobs when the JG pool shrinks? It cannot be something that requires expensive equipment or materials — and almost everything requires expensive equipment or materials! Also remember that you promised me a job that matches my skills, and my skills are technical, so I’m not interested in changing your grandma’s diapers.
A JG wage will be whatever Congress decides. Just because someone in an ivory tower says the JG wage will be $15/hour does not mean that the JG wage will be $15/hour.
The types of JG work will be whatever politicians decides. Just because someone in an ivory tower says that JG workers will be tending community gardens does not mean that JG workers will be tending community gardens.
Yes, governments could create work to provide full employment, but as Kalecki explained 75 years ago, governments will not do that because it is not what the ruling class wants.
Rodger keeps hammering away at the GAP between the rich and poor. Rodger is correct. Democracy does not work when there is a large GAP. Until the GAP is addressed, JG’s and Basic Incomes are non-starters. MMT has no plan to fix the GAP.
Dan, it’s not so different from when, after WW2 we did have full employment [that is 2% unemployment]. Every proviso you erect here applied then, and I don’t recall the angst you put up now was an issue. Sure there are shit jobs but what is one of them differs through time. The examples you list are underemployed. I think you will find many opportunities neglected today for work available. Yes, politicians will decide. It is they who have to fulfill the full employment mantra. They always did. That’s their problem- the fundamental questions you list.
If they stuff it up you can be sure with a UBI they will be equally incompetent.
It was never the private sector’s obligation to provide jobs for all. They only use labour in sufficient numbers to be profitable. That has never changed. Government creates unemployment because it taxes us and we need its currency to pay tax. Therefore if they create unemployment they have to remedy it. They did until neo-liberalism took hold.
The fact a UBI is getting traction for the rich is precisely because it fits a neo-liberal agenda. They can wash their hands of any blame, and as they won’t have to pay a decent wage and will use people for free so to speak. I doubt the government will even want to fix that problem. It’s a minefield not faced by a JG, and a lot more expensive.
Dan, it’s like this. You gotta have faith that:
1. Somehow, federal bureaucrats will learn how to train and supervise thousands of local government bureaucrats who
2. Somehow will learn how to find or create millions of non-crap jobs that millions of people actually want (at minimum wage),
3. While, somehow, not competing with private industry,
4. And somehow, the local government bureaucracies will learn how to train people to do jobs they don’t know how to do,
4. While offering people who don’t want those jobs, an unspecified Universal Basic Income.
You see, JG is so bad, that to make it work, you have to supplement it with UBI, so people will have a choice between working for minimum wage or not working and receiving a basic income.
In short, it boils down to working for a job you don’t like or receiving an enhanced form of unemployment compensation.
Work for money or not work for money. Hmmm, I wonder how that will turn out. JG says people will flock to the JG jobs because people have an emotional and moral need to labor for invented jobs that don’t yet exist. Yeah, right.
Rich and retired people don’t have that emotional and moral need. Don’t ask why. That is just one of a hundred questions that will be ducked by JG adherents. When I asked John how JG/BI was better than the Ten Steps to prosperity, his response was “Apples and oranges.” That is typical.
Dan, if you try to discuss JG with any of its adherents, you also will find that each person’s JG differs substantially. John Doyle’s JG is a JG/UBI that is so outlandish it needs to be introduced city-by-city, all over the country.
As everyone knows, all federal programs are introduced city-by-city, aren’t they?
When you finish arguing that ridiculous idea, the next guy’s JG will be something completely different. The only thing all the JGs have in common is the words “Jobs Guarantee.”
But don’t worry. Somehow it all will work out, because everyone likes guarantees.
Lots of straw men there Rodger. Remember there were days with full employment back before 1970 – 75. It worked then, it can work now. All it takes is the government to set it in motion. As to how competent they are, well it’s no different from today and we cobble something every day, imperfect but it somehow survives.
As to rubbish jobs, don’t we have a superabundance of them already?
As you say there will be lots of jobs for bureaucrats. Are they rubbish jobs? I tend to think so. Jobs for life! That too.
It is the governments obligation to remedy unemployment. They can do it in two ways. 1] provide the job opportunities for the private sector with plenty of deficit spending on repairing infrastructure etc and 2] organise work by itself. It doesn’t need to outsource work to the private sector. It can set up more hospital beds, aged care centres, and entertainment complexes etc etc, and contract them itself. Keep the financial sector at bay. And do your 10 steps as well!
As I repeatedly have said:
1. The problem is not a lack of jobs. There are plenty of jobs. Millions of jobs.
2. They just aren’t the right jobs for any individual job seeker.
3. The real problem is lack of money.
4. JG is a huge undertaking designed to solve a non-problem.
5. The Ten Steps is simple, much easier to implement, and it will solve the real problem. LACK OF MONEY.
Have you never looked for a job? You go to the paper or online and you see thousands of jobs. Out of all those thousands of jobs, you see a mere handful you would like. Think about it: Why so few? JG doesn’t answer that question.
Then one day, you will retire and you won’t have a job at all. Is that a problem? Why or why not? JG doesn’t answer that question, either.
JG looks at statistics, not people. It sticks person A into Job slot B. Problem solved. JG is an economist’s statisitical solution to a human problem.
Sorry, that doesn’t compute. There is no lack of money, but there is certainly a lack of government policy. It’s vastly easier for the government to ramp up spending and that will get jobs going again than go through the political angst of a UBI. A UBI , being Universal will spend a huge sum on people who don’t need it. Getting jobs going again will be necessary. The idea of a JG is to keep the government’s nose to the wheel. No more NAIRU nonsense. Your UBI won’t change any of that.
Sorry that it doesn’t compute. Perhaps you need a new computer.
Re. UBI, I never have suggested UBI. I’m sticking with the 10 Steps until someone shows me something better.
What do you mean you don”t speak about a UBI? In your 10 steps is item 3. a UBI under another name, a bonus you call it. And it is “U” universal.
What didn’t compute is your contention there are millions of available jobs therefore a JG is almost taken care of already and is not a con. We just need it “set in stone”, so the government cannot abandon it like they abandoned full employment back in the 1970’s. As to being jobs people don’t like, precious darlings, mustn’t soil their lily white hands, we seem to have a solution already, like all the Turks in Germany and similarly in other nations they do the unwanted jobs. The nightsoil men aren’t needed now so that’s an improvement in the jobs market. They are still jobs and they need to be filled, without putting unemployed on the scrap heap, except by individual choice. That will change when affluenza is lost.
Your universal bonus income just needs to be a filler, without the “U” which is what I have been saying.
UBI stands for Universal BASIC INCOME. The idea is that it will provide a BASIC INCOME to everyone. which will obviate poverty. I would estimate that in today’s world a UBI would need to be at the very least, $15,000 in states like Mississippi and West Virginia, and much more in New York and other major metropolitan areas,
Thus an effective UBI would need to be relatively large and to take into consideration local cost-of-living as well as family composition.
A mere universal BONUS is not meant as a primary subsistence, and thus does not need to take cost-of-living or family composition into consideration. Social Security, for instance, is a BONUS, not a UBI. Learn the difference.
I have no idea what your comment about JG means. You say my contention is that . . . “JG . . . is not a con”??? Huh?
Finally, your “precious darlings, mustn’t soil their lily white hands,” comment is beneath contempt, but is perfect for what the rich have been trying to sell to the populace. In your world, apparenty the poor are lazy takers, and the rich do all the work. Truly disgusting.
Clearly, you will say anything to “win” your argument. Thank you, Mr. Trump.
I was being ironic about the lily white hands. How about you learn about irony.? I heard Americans are deficient in understanding Irony. I thought it was an exaggeration. Apparently not! I’m not your opponent! You should know.
YOU said JG was a con, in a previous post. I say it’s not.
We agree a UBI would cost a lot. Your Bonus is just a cheaper substitute. It’s not otherwise much different. I know the difference.
Reminder,- Jobs are vacant because workers are not being employed because they are not wanted, and training has been neglected. The firms have what they need and the economy is not growing enough to employ them. A JG would force the government to spend up to the level of full employment, and – we hope – make education free so they can get training, [FICA free as you want. You are not alone there].
We have much the same problem here in Aus. There is no FICA, but trade schools have been closed down, so we import qualified workers on temporary visas at up to $4000 a week. It’s pretty scandalous.
Total bullshit. You claim to know the difference but say there is no difference. You must have learned, “What I really meant was . . . ” from our lying President Donald Trump. Say one dopey thing, then claim you were misunderstood by people too stupid to understand what you really meant. If you’re going to lie, find a better teacher than Trump.
WAIT. When I say that, I am just being “ironic.” I hope you are smart enough to understand my clever irony. Or was it irony?
Rodger has more patience than I do at debating JG’ers.
No, a JG would not necessarily bring the economy up to “full employment” unless you think having highly skilled people do demeaning make-work is “full employment.”
Look, if MMT wants to create junk jobs for low-skill workers, then at least be honest about it and call it the “Junk Job Guarantee.” You can make a viable argument for such a program, because there are certainly some low-skill workers who would benefit from it. Just don’t shower me with BS about how you are going to create “good” jobs that match my skills. That is, as Rodger put it, a “con.” It’s bait and switch — MMT paints a rosy picture of a JG to win support, yet any real life job program will be mostly low paying junk jobs that will be unappealing to skilled workers and that won’t help the individual get a career job.
Nor do we have to choose between a JG and unemployment. There are other paths to full employment. Those paths are blocked by political problems, not by economic problems.
Training is not the issue. As the old story goes, if you send 10 dogs out to search for 9 bones, at least one dog will not be able to find a bone, no matter how well trained the dog is. What we need are more bones. The government is certainly capable of creating more bones out of thin air, but the irony is that the numerous constraints of a JG program make it extremely difficult for the government to create bones out of thin air.
— a real-life JG cannot compete with the private sector. That was true of the New Deal programs.
— a real-life JG cannot duplicate existing government programs. That was true of the New Deal programs — and by the way, there are already Medicaid and Medicare programs that cover elder care. Most of that elder care work is outsourced to the private sector so JG elder care would be breaking two rules at once.
— a real-life JG cannot train workers to compete with existing workers. That was true of the New Deal programs — the trade unions did not want the CCC or the WPA to train more trade workers, because there was already a glut of trade workers.
— a real-life JG cannot be anything that requires substantial materials or equipment because that explodes the cost of the JG, and taxpayers will justifiably question spending $1 million to create one job (very typical for infrastructure jobs). Wouldn’t it be cheaper to simply give the unemployed money?
Outside of the medical field, I am not aware of any proven shortage of trained workers in the U.S. — and the doctor shortage is deliberate thanks to lobbying by the AMA. If there were truly a shortage of elder care workers, or teacher’s aides, or what have you, then market forces would bid up their wages. I guarantee you that there would be plenty of people applying for elder care and teacher’s aide positions if they were permanent jobs that paid $100,000 with full benefits and 6 weeks paid vacation.
Dan, you are correct, though I believe the focus on “jobs” is wrong. The purpose of government is to improve the lives of the populace, and this does not necessarily mean work. It means benefits.
The “Jobs Guarantee” merely attempts to give people something to DO. That is not what people need. They need the benefits that the Ten Steps offers.
Rather than a “Jobs Guarantee,” there should be a “Benefits Guarantee.”
One more observation on whether a JG would produce “full employment,” aside from the fact that skills and minds and factories would not be fully employed. While MMT proposes that its JG would be open to “all takers,” any real life JG will have numerous restrictions on who is eligible. The New Deal programs had significant restrictions. The Jefe program had restrictions. The India job program has restrictions. There is zero chance that the U.S. Congress will pass a JG that is open to all takers. There will probably be mandatory drug testing. Illegal immigrants will not be eligible. People with criminal records will probably face restrictions (ask yourself, do you want to work along side a convicted child rapist? I don’t.) As Rodger has pointed out before, there will have to be a way to fire JG workers, so those fired workers will be unemployed. And so on and so forth.
Or, what happens if the unemployed refuse to take the dead end JG jobs? FDR offered the unemployed Bonus Army protesters CCC jobs, and most of them refused.
how do you two approach the issues that underlie a Basic Income? For example the tendency of employers in the part-time labour market to exploit the implicit ‘subsidy’ to further reduce wages and exacerbate the trend away from full time work to low wage, low productivity part time bullshit jobs, deskilled and reducing falling average material living standards.
it would give little to offer those that would choose to work instead of relying on a UBI. It would not reduce unemployment. [Mitchell and Fazi -Reclaiming the State, 2017. pp 228]
If the government instigated an increased budget deficit spend, which it would be obliged to do, it would lack an in-built inflation anchor and would lead to inflation pressure. So the greater the share of income generated in any period received by people who offer nothing in return, the higher will be the risk of inflation, and the supply side of the economy will shrink while the demand side stays stable. The real resource space available will be reduced.
The authors say that a basic income policy is highly problematic with regard to its capacity to deliver price stability and sustained full employment. Who are we to naysay that? If you don’t understand my summary then read the book
I do not advocate UBI. Wait, Perhaps you still don’t understand. Maybe if I say it louder: I DO NOT ADVOCATE UBI.
Read the Ten Steps to Prosperity.
Then you’d better rewrite your point 3!
Perhaps you should reread it.
That’s why you need to rewrite it!
John, just as there are many versions of the JG, there are many versions of a Basic Income.
The wage subsidy problem is real but can be largely mitigated if the BI is designed carefully — many BI’s are not designed carefully.
First, a UBI or a means-tested BIG? A UBI might have more political support because it seems like everyone gets free money, but a means-tested BIG would cost a fraction of a UBI and still help the people who need help. I favor a means-tested BIG but try to see both sides of the issue and try to make either work.
With a means-tested BIG, I suggested setting the BIG right at the poverty level (or poverty level plus $1 so we can claim to eliminate poverty). I suggest making the BIG weekly rather than annual — the means testing would be based on that one week’s income regardless of annual income. That’s actually easy to do, not much different than how we presently make unemployment insurance a weekly thing. If your weekly income was less than the BIG, then the BIG would top it off. If your weekly income was equal to or greater than the BIG, then you get nothing that week.
To eliminate the wage subsidy effect with my weekly means-tested BIG, the minimum wage should be set significantly higher than the BIG, say 25% higher. That way, no one who worked full time in a given week would get a BIG. No one who worked full time would have an economic incentive to quit their job and draw a BIG. That eliminates both the wage subsidy problem and the disincentive problem for full time workers. There would still be some disincentives for part time workers but they are mostly housewives and students and only small part of the labor force.
A UBI is much more complicated. I think a UBI could be made to work but you’d have to do it exactly the right way, and politicians don’t have a good track record of doing things exactly the right way. I agree with others that a UBI would likely require new taxes to avoid overheating the economy. Hopefully those new taxes would be progressive so that the rich’s UBI would be mostly taxed away while the poor would get to keep their UBI. Let’s say we make the UBI and the new progressive tax such that after taxes, the amount everyone keeps would be exactly the same as my means-tested BIG! Well then, the net economic effect of the UBI would be exactly the same as my means-tested BIG! Economically, such a program would not make a lot of sense because the government would be putting money in one of your pockets while taking money out of your other pocket, but I acknowledge the political advantage of a universal program.
Mind you, while I support a modest means-tested BIG, I view it as a safety net to keep people from falling through the cracks, not as a miracle cure for everything that is wrong with the economy. Beware of any one program that is billed as a miracle cure — including the JG.
Regarding the inflation anchor, MMT is all wet about a JG controlling inflation. Most inflation in my lifetime has correlated to oil, and a JG would not change that. At best, a JG would “anchor” the price of unskilled labor, but inflation has never, ever been caused by unskilled labor. So I call bullshit on MMT.
Yes, inflation is a concern, but first we have to understand the causes of inflation, and address them one by one, something MMT has failed to do. Yes, too much deficit spending can overheat the economy and cause inflation (but when was the last time that happened? WWII?) but we know how to fix that type of inflation — reduce deficit spending.
Question: why is it everyone worries about inflation caused by government creating dollars out of thin air, but no one worries about inflation caused by banks creating dollars out of thin air? Because most dollars are created by banks, not by government.
In summary, my proposed BIG would not create disincentives to work, so the supply side would not be significantly effected. This has been backed up by real world data like the Canadian Mincome experiment. My proposed BIG would have modest cost so increased deficit spending would be minimal, and if we do need to trim the deficit I can think of other areas that could stand to be trimmed, not to mention taxing the rich.
But even a well designed BIG would not be a cure-all. I think you need some sort of 10 point program for the economy, that includes functional finance budgeting, health care, education, child credits, etc., not just one single miracle program.
Well, you have obviously given plenty of thought to the problem, which I have not as my plate is already pretty full with other aspects of MMT and the evils of the mainstream lies. A JG /UBI issue matters to MMT theorists but it is a part only of the problems we have today. Basically it’s all theory at this time as we have neither a UBI or BIG or a JG in operation. We have to wait and see.
I base my thinking on the fact we used to have a world wide program after WW2 to have full employment and I don’t see all the angst you and Rodger apply to it as inevitable. Maybe so/maybe not.
Your [U]BI is Point 3 of the 10 steps [which I agree with] IS universal because you say it. If it applies to ” every man woman and child ” how is that not universal?
I detect in the comments here [not so much from Rodger] an inherent dislike of government interventions – as irrelevant to solutions. Very American, but very unhelpful as it is the government that has the reins on the economy etc. It’s just not true that the private sector does it all better. The private sector is based on profit and that kills it where the economy as supposedly aiming for a better life for all gets stung by corporate [profit] interference. It is why healthcare is twice as expensive as in other affluent nations.
Governments have to run these programs. They used to and can do it again even though they are well behind the privatisation surge. It’s very bad news that we think governments are biased incompetents sold out to profit motivated interference both here and everywhere. I can’t see how we resolve that.
Step #3 This step proposes we give a modest monthly Economic Bonus (EB) to every man, woman, and child in America, regardless of any other income or wealth they may have.. I would think that backers of UBI would say UBI is quite different.
Pavlina Tcherneva: Calling for a National Job Guarantee
The Zero Hour with RJ Eskow
Published on Apr 8, 2018
Pavlina Tcherneva working paper on JG:
Click to access wp_902.pdf
see also Bill Mitchell on job guarantee:
see also, just posted:
The Case for a Job Guarantee in the UK – Professor Fadhel Kaboub – 26 April 2018
Michabo Sustainable Harmony
Published on May 6, 2018
Alan2102, I just wasted 16 minutes watching Pavlina Tcherneva ducking specifics, just as I repeatedly have predicted.
Since you sent this to me, it is clear you either have not watched the video yourself, or you did not read the above post. She said exactly what I repeatedly have shot down:
1. She equates not having a job with the social ills that are caused by not having money — crime, despair, increased mortality. Yet, rich people, who do not have a paying job, are not plagued by these ills. Why? Answer: It is not a lack of jobs that is the problem; it is a lack of money.
2. She finally “clarifies” that these will be federal jobs. Yet, defenders of JG repeatedly give mixed messages about this. At long last, Alan2102, are these federal jobs or are they private jobs? I have grown weary of JG defenders going both ways on this issue.
3. And what kind of federal jobs are they. Well, they are “like” WPA a jobs, “but different.” How different? No one knows. And are they the kind of jobs the unemployed want? No one knows. How will they not be “bullshit” jobs? No one knows.
And does it matter whether the unemployed want those jobs? No, because beggars can’t be choosers. According to Tcherneva, they should be happy just to have a job, any job.
4. And these jobs will double the nation’s minimum wage to $15, but by some mystery of economics, JG supposedly prevents inflation. Pueeeze!
5. And that doubling of the minimum wage will not have a profound effect on private industry??? Gimme a break.
Had you even bothered to read the above post, and then watched/listened to the video, you never would have sent it to me, since it merely reinforces what I have been saying about JG. In short, it is a naive program that is unworkable.
The Ten Steps to Prosperity is infinitely better. In fact, merely taking Step #1, “Eliminate FICA,” will do more for the poor, than JG, and will require no administration effort at all.
I cannot imagine why you think this video is any help at alI, as it merely confirms all that I have been saying about this naive program.
Ultimately, it is exactly what the rich want, because it solidifies the belief that the poor need to labor — for minimum wage — in order to survive.
You obviously have very strong feelings about this, Rodg. That’s cool. Me, I think there is plenty of room for both a JG AND UBI. Jobs are very important, and so is income security apart from jobs. Perhaps you should read Tcherneva’s paper on the subject, and invite Bill Mitchell over for a discussion. It might be fruitful!
PS: and btw, I did not find your post convincing, because you are so fanatically opposed to the JG that you allow your emotions to overwhelm your mind. For example, you use language suggesting that the JG must be enacted universally overnight, or else… or else… or else I don’t know. It is as though you cannot imagine a staged, sensible, sane roll-out of a big national program (which a JG would, of course, be). Hence, you ask unanswerable questions like: “Who exactly will: –Find or create available jobs EVERYWHERE, –Interview EVERYWHERE, –Hire EVERYWHERE”, and so on. Obviously there are no answers to such highly loaded questions. It would not be possible to do those things EVERYWHERE, overnight. So what? That misses the point. All of those things can be done, but not overnight. You might want to sit back and meditate a bit on why you have such a visceral reaction of hatred toward this idea. Perhaps it is not as good as the UBI… but perhaps it is. I don’t know, but the heat that you are expressing exceeds the light that you are shedding.
First, you make an assumption. Then you criticize your assumption as being impossible. Then you criticize me for having your assumption.
By the way, what is Your plan aside from criticizing your assumption about my assumption?
Rodger, I cited Tcherneva’s thoughtful working paper on the JG, which goes into much more detail than could be presented in a video format. Have you read this paper? Here’s a brief snippet from page 17 (of 67), which I found not just interesting, but exciting:
One of the aspirations of the JG program is to foster a process whereby jobs and projects are proposed and managed from the bottom up—i.e., via direct input of community members and other stakeholders. Because it is a locally based program that targets the needs of the community and its members, the program lends itself to broad participation of constituents in its design and operation.
Indeed, for its long-term success, participatory governance is likely a prerequisite. There are many models and real-world experiences that can inform a design that incorporates citizen engagement, public decision-making, and local institution building. For example, participatory budgeting can ensure that municipalities rely on citizen input about the local projects that require funding and involve them in the budgeting process itself. Experience with participatory budgeting shows that it significantly improves the effectiveness and results of local social programs.
Wow! Fantastic! This is how large fedgov programs should be run! Participatorily, democratically, with plenty of local input and influence. And, you will notice, that partial answers to some of your questions are in that very text, as well as throughout the rest of her paper. It is not a matter of knowing who, precisely, (and presumably who AT THE TOP) will “find and create available jobs everywhere”, or “interview and hire everywhere”, instantaneously, or in advance, or *ex nihilo*. That’s a silly straw man. A vast program like this develops and evolves — and preferably in the way that Tcherneva just described in the paragraphs above. She also provides details on the general classes and types of jobs that a JG program could focus on, and much else. I highly recommend it, if you want to know something about what JG theorists are thinking. Check it out. Who knows? You might like it!
Also, Rodg, don’t miss her scores of questions and answers, which are quite informative! Here’s one:
42. Why don’t we just give people cash assistance instead?
Even if UI were increased, other cash assistance programs were strengthened, and a form of basic income guarantee were implemented, people would still want jobs.
Research indicates that the nonpecuniary costs of unemployment (85–93 percent) far outweigh the pecuniary costs (15–7 percent) (Winkelmann and Winkelmann 1995). This suggests that interventions that are based on providing income alone will not be successful. People reap a great many benefits from working; income is but one of them (see figure A4 in appendix II). Decent work at decent pay brings significant mental and physical health benefits, it increases and deepens one’s social capital, strengthens educational and labor market outcomes of other family members, and offers institutional support and economic opportunities not available to those outside the labor market, to name just a few.
While there are many good reasons why some people cannot or should not work and why other public policies should be designed to offer them economic security, income assistance does not solve the problem of involuntary unemployment.
Keep in mind that there is nothing about the JG that is antithetical to or incompatible with UBI. On the contrary: they complement each other. If you don’t want to work at a job, fine! There should be supports in place that allow that. But most people DO want to be employed at something or other, that provides for real needs, and that’s fine too, since there sure is plenty of work that needs to be done! Apart from ridiculous things like digging ditches and filling them up again, there is no such thing as a “bullshit job”. All jobs that provide for human, animal and environmental needs have dignity and worth. The term “bullshit job” is itself offensive, if it refers to jobs that provide for said real needs.
Buried in the psychobabble, Big Brotherism about my “need” for low-pay government work, you inserted this meaningful phrasing: “If you don’t want to work at a job, fine! There should be supports in place that allow that.”
What exactly did you mean? Where is that described in JG? Is that your own invention? What exactly are those “supports”?
Yes, the idle rich promulgate the nonsense that I need to work, and so in order to satisfy my “need,” the government will force me to work in minimum wage jobs, in order to eat. The idle rich do that so there will be a large cadre of slave labor available to them.
Yet how is the majority of Americans over 70 not working at a paying job, and yet not suffering from “nonpecuniary costs”? I’m retired and quite content.
And isn’t it strange how little labor is required to satisfy the so-called “needs” of the rich, and how much labor is required to satisfy the “needs” of the not-rich? Or perhaps, lounging on a yacht is considered labor???
Finally, how is all this better than the Ten Steps to Prosperity?
“What exactly did you mean?”
Exactly what I said.
“Where is that described in JG?”
It isn’t. I said very clearly where I stand: we need BOTH JG and UBI. They do two different and important things.
“What exactly are those “supports”?”
“Yes, the idle rich promulgate the nonsense that I need to work”
Who cares what they promulgate? Let people do what THEY WANT TO DO, for whatever reason, their own reasons. If they want to work, there’s plenty of useful and essential work that needs to be done; let’s give them good jobs. Only if THEY WANT THEM. No coercion.
“the government will force me to work in minimum wage jobs”
WHO the fuck said anything about government forcing crap jobs? Not me.
“I’m retired and quite content.”
Great! Stay that way.
“Finally, how is all this better than the Ten Steps to Prosperity?”
Apples and oranges. Different issues.
Got it. If they want to work, give ’em a job they’ll like. If they don’t want to work, or don’t like the job, give ’em enough money to make ’em happy.
What a wonderful plan.
And what is the issue JG + BI addresses that the Ten Steps don’t address?
Briefly, it sounds like the federal government funding local governments to do what the local governments can’t afford to do, while attaching all sorts of requirements to this funding.
Is that your vision of JG?
Or does JG fulfill its mission simply by hiring a gigantic federal bureaucracy to “ensure that municipalities rely on citizen input about the local projects that require funding and involve them in the budgeting process itself”?
Again, why is this better than the Ten Steps to Prosperity?
In addition to the psychobabble, Big Brotherism about my not being happy unless I labor in a low-pay, government job, I note this line: “If you don’t want to work at a job, fine! There should be supports in place that allow that.”
Where is that described in JG? Is this your idea? What are those “supports”?
I love your opinion that “there is no such thing as a “bullshit job”. Would you enjoy working all day after day in the typing pool? Or being a greeter at Walmart? Or 8-hours a day saying, “Shall I supersize that” at Burger King? Would that satisfy your supposed “need” for labor?
Would being a coal miner satisfy your psychological needs? Or perhaps you prefer being an 8-hours-a-day ticket taker for a train station?? Would that provide you with greater emotional satisfaction than simply having your financial needs taken care of?
Any job in which you would prefer to be on vacation is a bullshit job from the standpoint of the laborer.
Odd, isn’t it how the majority of 70-year-old Americans don’t have paying jobs, yet don’t suffer from the Winkelmann and Winkelmann syndrome.
Here is the reality: The idle rich promulgate the notion that the not-rich have a psychological need to labor, while the rich have no such need. (Must be something in the genes, right?) Or do you consider lounging on a yacht to be labor?
The rich want a large cadre of slave labor, so they have sold the notion that labor makes me happy. Yet, here I am, retired and happy.
And finally, why is JG superior to the Ten Steps to Prosperity?
Wow I haven’t been to this site in a while and this topic seems to have set off a wee bit of a firestorm. I have looked at the arguments for both JG and UBI and I am not much of a fan of either.
It seems the way to create meaningful jobs is to create demand for labor through investment into the things that society desperately needs.
The obvious way to do that of course is through federal deficit spending (i.e. Roger’s 10 steps).
Universal health care (step 2) would create demand for doctors, nurses, technicians, medical suppliers, social workers, researchers, and administrative and support staff, while decreasing economic burden on individuals and employers.
Investing in public infrastructure (step 10) would create demand for civil engineers, architects, construction workers, general laborers; investing in public education (step 5, 10) would increase demand and wages for teachers, administrators, and custodial staff, and over time help create a more capable workforce.
Investing in subsidized public transportation (step 10) would create a variety of jobs, and help low wage workers in getting to and from work. Clean energy, urban renewal, the arts, national parks, resource sustainability, the list of societal needs is endless.
In addition, cutting regressive federal taxes (steps 1,6, 7) would put more money in peoples pockets and increase spending in the general economy, further increasing demand for goods and services and jobs. It is a virtuous cycle.
No need for complicated and unworkable federal programs.
Rodger, if the real problem is lack of money, why not just do income assistance that is large enough to eradicate poverty?
It’s not just poverty. The middle is hurting, too.
As the intro to the Ten Steps to Prosperity says, “The most important problems in economics involve the excessive income/wealth/power Gaps between the have-mores and the have-lesses.
“Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics.
“Implementation of The Ten Steps To Prosperity can narrow the Gaps”
Just imagine what Step #1 alone could accomplish. Then add #s 2,3,and 4, and you are well on your way to a truly prosperous economy.
Remind me again:
1. Why exactly are all these jobs vacant? (Think about it, and you’ll understand why JG would flop.)
2. How will JG help our economy and the unemployed?
Question: What do we do with all those bureaucrats who were hired to implement the Jobs Guarantee? Fire them now and hire them later — repeatedly