Whenever you talk about a Job Guarantee, that promises to hire anyone ready and willing to work, the Moles Pop Up proclaiming that JG workers will never do anything useful. They’ll all be hired to dig holes, and then will be rehired to bury those holes. It isn’t desirable or feasible to run a JG program for the “obvious” reason that we won’t find anything useful for them to do. Much better, it is claimed, to leave them jobless.
The bleeding hearts who take this position are willing to throw the jobless a few scraps. Maybe some welfare or foodstamps, or maybe even a tiny bit of BIG (basic income guarantee, which most proponents want to keep so low that anyone living on the BIG would starve; but that’s an issue for another day). The heartless want to throw the jobless to the wolves, to preserve incentives. Better you than me!
MMTers think all of this is not only far too pessimistic, but also disastrously wrong. We have lots of work to do, and lots of people who want to do the work. The trick is to match the “demand” and “supply”: to create an infinitely elastic demand for workers in order to hire all who want to work. And then to keep them busy doing useful stuff….Nice shout out to Jesse Myerson, too.
Economonitor — Great Leap Forward
Bop A Mole #2: Jg Workers Will Do Nothing Useful, The Jg Program Will Not Be Manageable
L. Randall Wray | Professor of Economics, University of Missouri at Kansas City
4 comments:
Points for JG enthusiasts to ponder:
1. The concentration of relatively unskilled labor on JG schemes will be high (relative to other factors of production like capital equipment, materials, permanent skilled labor, etc). That leads to inefficiency. So why not subsidise JG labor into work with EXISTING public sector employers, where the above “concentration” is more normal?
2. If that makes sense, why not subsidise JG employees into work with existing PRIVATE SECTOR employers as well. The empirical evidence is that subsidising the unemployed into work with REGULAR employers produces better results than subsidsing them into work with charities and other non-regular employers, a la conventional JG. For the evidence, see:
http://ideas.repec.org/p/cpr/ceprdp/2993.html
See also here:
http://ideas.repec.org/p/iza/izadps/dp606.html
Ralph I dont see that working the people probably wont be motivated employees at the firms...
I think we have to give people the option to retire earlier than now 67. This is just way too long to work in most jobs that require physical efforts which many do...
So earlier and expanded public pensions as step 1 imo... this will effectively shrink the employment pool....
rsp,
Increasing the size of the Peace Corps would be great.
Frank, Early retirement is an example of an ever popular and fallacious selection of cures for unemployment sometimes called “labour supply reduction” cures. That selection includes a shorter working week (tried in France), longer holidays, delayed entry into the labour force for youths, etc.
There may be arguments in physically demanding jobs for earlier retirement, but it won’t do anything for unemployment. Reason is that numbers employed are ALWAYS roughly 90-95%: in every country in the world. Cut the size of a country’s workforce and numbers employed will stay at the same level: 90-95% of the workforce.
Re “motivated employees”, subsidised employment with existing employers was tried in Switzerland (see my above links) and it seemed to work. Plus its been in effect in the UK for a good five years now. Obviously the low paid employees aren’t the most highly motivated on planet Earth. But they turn up and do a day’s work.
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