Will people still work if the government gives them money?

There is a rather widespread belief that if the government simply gives people money, they won’t work. Instead, they will be satisfied with the money they are given.

Long days, hard labor another day at the office for Oregon firefighters - CNN.com
Forest Fire Fighter: Median pay, $40,815 a year.

The variables in this hypothesis are: The amount of money, the people’s needs, the jobs available, the salaries available, and perhaps most importantly, the psychology of the people with regard to work.

There is a strange paradox that the people who labor hardest or at the least appealing jobs are paid the least.

It’s a paradox only because, for instance, one would think an employer would have to pay more to get someone willing to dig in a windowless, damp, dark, dreary, dangerous mine than to a teacher sitting in a comfortable, clean, often air-conditioned room, with windows to the outside.

Where would you rather be: A mine or a classroom?

Yet the median coal miner’s salary is about $29 per hour and the median elementary school teacher’s salary is about — right, that same $29 per hour.

When those coal miners, school teachers, forest fire fighters, et al are out of work, Modern Monetary Theory(MMT) refers to them as “buffer-stock.”

When you are nothing more than “buffer-stock,” you have no ambitions, preferences, or human needs.

You are just a peg to be fitted into an appropriately-sized government hole.

And having none of those aforesaid ambitions, preferences, or needs, you will be satisfied with whatever amount of money you have and/or receive.

So, if you are a buffer-stock person formerly making $50,000 a year, and the government was to pay you $30,000 a year, you will be satisfied, and not work to earn even more. At least, that is the belief of MMT and others with similar views.

California construction firm buys Lunda Construction
Highway construction worker: Median pay: $45,940 per year

And that is why MMT suggests its Jobs Guarantee.

Rather than having the government simply give you money, MMT et al would give you a minimum wage job, that you may or may not (probably, not) like, to prevent you and the other lazy slugs from just lolling about, doing nothing but collecting the dole.

The MMT rationale is that having any job, even a crap job, will look good on your resume, and help you find a job.

Puleeeze! I personally have hired hundreds of people, and never have found that make-work on a resume was more attractive than no-work.

Quite the opposite.

The myth of the lazy poor is rampant and ignores the reality that pay scales tend to be inverse to effort or benefit to society.

The laziest people on earth probably are the billionaires who resent having to walk, drive, lift, wash a dish, make a bed, set an appointment, wait in a line, fill out a form, or rear a child.

For those rich, their primary contribution to society is to give falsely appreciated property to charity, thereby gaining more in tax deductions than the cost of the property. (Hello, Donald Trump, who hasn’t paid taxes in most of the past 20 years).

These entitled few are given tax breaks that allow them to pay little or nothing against millions or even billions of annual income.

Yet there is annoyance, even among your fellow buffer-stocks, when a poor person receives any sort of free ride. Taking a few dollars in food stamps receives sneers even from the middle classes.

When there is a mention of Step 3. of the Ten Steps to Prosperity (below) [Provide a monthly economic bonus to every man, woman and child in Americasimilar to social security for all], there is heard in our land, plaintive moans, “Who will pick up our garbage; who will pave our streets; who will mow our lawns, who will do the dirty work the rest of us can’t bear to touch?”

The whole notion of the “buffer-stock” not caring to earn more and lift their standard of living is demeaning, ridiculous, and ignorant.

BUT, let’s say it’s true. Let’s say that if you simply give all those road construction workers the equivalent of their salary, and they decide not to work, what would happen?

First, it would stimulate the economy. When state and local governments pay bills, they use existing, recirculated dollars. No stimulus there.

But when the federal government pays bills, it uses newly created dollars, which increases the nation’s money supply and stimulates Gross Domestic Product.

Second, there would be a shortage of road construction workers, which would lift their salaries, and that would narrow the Gap between the richer and the poorer. A narrow Gap benefits the masses, which should be both a moral and economic goal of any nation.

In Summary, people are not “buffer-stock.” They are humans with hopes and dreams for themselves and their children. Whatever they have, they want more.

If unemployed people need money, give them money, not junk jobs.

Don’t pretend it is morally unsavory to do for the poor exactly what the government does for the rich. The less affluent need money, so give them money.

The inverse relationship between effort and reward is an abomination. If being given money means fewer people will accept junk jobs, good.

That will help force employers to make the jobs less “junky.” Work environments will improve and the pay will increase. Those are good results.

Every man, woman, and child in America should receive Social Security, and the benefits themselves should be increased. The result would be greater economic growth and a narrower Gap between the richer and the rest.

Rodger Malcolm Mitchell

Monetary Sovereignty Twitter: @rodgermitchell Search #monetarysovereignty Facebook: Rodger Malcolm Mitchell …………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………..

THE SOLE PURPOSE OF GOVERNMENT IS TO IMPROVE AND PROTECT THE LIVES OF THE PEOPLE.

The most important problems in economics involve:

Ten Steps To Prosperity:

  1. Eliminate FICA
  2. Federally funded Medicare — parts A, B & D, plus long-term care — for everyone
  3. Social Security for all or a reverse income tax
  4. Free education (including post-grad) for everyone
  5. Salary for attending school
  6. Eliminate federal taxes on business
  7. Increase the standard income tax deduction, annually. 
  8. Tax the very rich (the “.1%”) more, with higher progressive tax rates on all forms of income.
  9. Federal ownership of all banks
  10. Increase federal spending on the myriad initiatives that benefit America’s 99.9% 

The Ten Steps will grow the economy and narrow the income/wealth/power Gap between the rich and the rest.

MONETARY SOVEREIGNTY

15 thoughts on “Will people still work if the government gives them money?

  1. Rodger, I have never seen an MMT person demean anyone poor.It’s always people making criticisms of MMT that use it. “Buffer stock” isn’t a job description.It just describes a category of employment etc. It’s no more demeaning than “unemployed”. MMT people don’t add perjorative adjectives. Can you quote me an MMT person who says what you write.? Thanks.

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    1. I believe that “buffer stock” is demeaning. “Unemployed” refers to people. Buffer STOCK is used for inventory purposes. Cattle are known as “stock.” The notion that people are interchangeable is implicit in the concept, “buffer stock.”

      The whole concept of JG is that somehow, federal bureaucrats will find good, low-paying (minimum hourly salary) jobs — that don’t compete with the private sector — into which people will be inserted.

      MMT claims the process will be voluntary. It isn’t. If the “stock” don’t like the job into which the bureaucrat inserts them, they don’t get money. Not very voluntary.

      Then, who will supervise the job? Who will hire and fire the stock? How will promotions be handled, if by law, the wage must be minimum?

      I’ve written numerous articles about JG, among which are this, and this.

      You might enjoy reading them.

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  2. People will work whether or not there is a monetary system. Normal people want to do something with their time. We see volunteers in hospitals and fire depts., etc. Emergencies will produce heros from out of nowhere.

    If all of a sudden money should disappear, people would simply continue to work, else society comes to a grinding halt. Humanity would die a slow death. Like it or not, we’re forced to do what needs to be done, just as the Covid virus has proven with “essential workers” vs. the non-essential.

    Automation and evolution are trying to relieve us of non-essential, repetitive, nasty work. Economics is founded/funded by employment as a holdover from our preindustrial era. Automation and mechanical efficiency are the enemy of preindustrial economics. We’re now at that point in time where we need a new model that rewards automation with education as the logical go-to next step in our evolution(Step #4 & 5). As automation frees the individual’s mind to study creatively, the individual is then released to contribute back to society regeneratively; the more the better.

    There’s no telling how much we have hurt ourselves by insisting that people have “jobs” in accord with old fashioned modeling.

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  3. First I want to comment that I too have hired and interviewed many people for jobs and taught in business schools about recruiting, orienting and retaining employees. It is expensive to fill a job vacancy and one wants to minimize the risk. Hiring a person who has been unemployed for a long time is seen as a greater risk than hiring somebody employed. I have also supervised a number of programmes operated by volunteers who should have been paid for their work because it was of value to the organization.

    Also this article makes a number of assumptions about the Job Guarantee that are simply wrong. The political motivations of the writer and his bad beliefs jump out everywhere and are then attributed to MMT.

    Such as getting a minimum wage job one would probably not like. These jobs are conceptualized by the MMT crowd as more like an internship or apprenticeship to a non-guild or non-trade job. Something that is within their skill set but not marketable in the downturned economy.

    For example: I know a woman whom I see as and who sees herself as having a particular talent for making heart-warming, useful, entertaining instructional videos about managing the household. She could be hired by a community agency to do that for its clientele. She would be paid for work that she enjoys at a minimum wage and if the economy turns upwards may find a market niche for herself at above the minimum wage or be able to form her own company. She enjoys doing standup so could be hired to entertain groups of people in various settings unable to afford to hire her to do so. During an economic downturn neither can happen.

    Another example. There are a number of musicians who are looking to support themselves and their families but during a downturn are unable to do so. They would likely be happy producing music for seniors/people in long term care where funding for hiring such a person is limited. For example. In the residential treatment facilities where I worked, these folks could also provide a useful support to the staff who are usually limited by their duties and cannot do that kind of work. They would be paid for that. They could also be paid to warm up a crowd before a meeting while folks are getting seated for an event.

    This can apply to many people in many walks of life.

    When I hired people, the resumes and interview were important but their references mattered to me a lot too. I also managed a number of volunteers in different jobs I had over the years and their work was often of such value that they should have been paid. Volunteers seldom get the kind of supervision that a prospective employer can trust.

    There were a number of good values presented in the article but these assumptions made by the writer were wrong.

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    1. Thank you for the examples.

      I have one question:
      What is the fundamental purpose of JG? Is it to provide cheap labor for employers all over America, or is it to put money into the pockets of Americans?

      You have taught college courses devoted to: “recruiting, orienting, and retaining employees,” This must be a pretty complicated concept to warrant college courses.

      And yet, MMT believes this complexity all can be accomplished by:
      1. Hundreds, if not thousands, of bureaucrats who must be hired and trained to:
      2. Find many millions of jobs for people living in every village, city, hamlet, farm, and town all over this vast nation, and:
      3. The jobs must be matched according to the skill sets of millions of job seekers and:
      4. The jobs must be in safe, convenient locations and:
      5. The jobs themselves must be acceptable to the job seekers, and:
      6. The job seekers must be acceptable to the employers, and:
      7. Someone must supervise the employers to make sure the government is not sending people to “job hell.”
      8. Then, what happens when someone rejects a job or is fired or quits? Do they lose their income?

      I’m sure, that you, as a college professor, can think of the many difficulties that will arise in this program.

      So again, is it the fundamental purpose of the program to provide cheap labor for employers all over America?

      Or is it to put money in the pockets of Americans, which easily can be accomplished by expanding Social Security (Step 3 of the Ten Steps to Prosperity).

      Finally, if you could list “the political motivations of the writer and his bad beliefs that jump out everywhere,” I would be glad to address each of them for your and for other readers’ edification.

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    2. You wrote: “I also managed a number of volunteers in different jobs I had over the years and their work was often of such value that they should have been paid. Volunteers seldom get the kind of supervision that a prospective employer can trust.”

      In this regard, who do you think actually pays the JG employees, the federal government or the local employer?

      I’ve heard various answers from MMT people.

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        1. Are you sure that is what MMT suggests?

          So, in answer to my question (“Is it the fundamental purpose of the program to provide cheap labor for employers all over America? Or is it to put money in the pockets of Americans”), the fundamental purpose is to provide cheap labor for employers. It’s an employers’ benefit, disguised as a workers’ benefit.

          If the government wanted to put money into the pocket of Americans, it could do so without the complex, convoluted, roundabout JG program, that in addition to everything else, must monitor employers’ records.

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          1. According to MMT it is neither. It is meant to offset the devastation on people of a downturn in the economy. If you were to actually read The Case for A Job Guarantee by Pavlina Tcherneva you would have answers to your questions. It also points out that it establishes a new floor for income meaning that businesses to attract people to work for them are going to have to raise the wages they pay.

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          2. You tend to make a lot of assumptions in your writing. Your last sentence is yet another example of that. The govt does not need to keep those records. The employers can do that. They can be aggregated for the govt by local groups if it is needed.

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  4. Anitreifier,

    Specifically, how do you think it “offsets the devastation?”

    Providing work doesn’t offset anything. It just makes people sweat.

    Providing money does offset devastation, however. So again, what is the fundamental purpose of JG?

    I’ve read much of what Pavlina has written. I also correspond often with Stephanie, occasionally with Warren, and have argued with Randy. I even, years ago, gave a talk before Randy’s class at UMKC.

    I know their answers. I’m asking YOU to see what you believe.

    Yes, JG establishes a minimum wage, which the government can do simply by passing a law. Doesn’t need JG for that.

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