I find people's misinterpretation of the Job Guarantee amusing. Not at all sure why it is quite so difficult to grasp.3spoken
Simplifying a little, Job Guarantee declares by fiat that all those that were previously short of an 'ordinary job' have an 'ordinary job' and a wage. Job done - no more unemployment. By decree.
That's why there isn't a 'Phillips curve' or NAIRU in MMT. Because both of those rely upon the traditional notion of 'unemployment' and there is none in MMT. Therefore they can't apply as standard. The 'trade off' changes to reference those on the Job Guarantee scheme instead.
So you have to alter the ideas to take into account that the nature of a Job Guarantee buffer is different from an unemployed buffer. Which means there both is and isn't a trade off curve in MMT. Only confusing if you fundamentally don't want to see the difference.
The Job Guarantee (JG) is counter-cyclical auto-stabilising social security with a twist.
The twist is four fold:
Why is Job Guarantee so difficult to understand?
Neil Wilson
9 comments:
As I posted on Neil's blog, because you can't create meaningful, appropriate jobs out of thin air, especially given the proposed 80% wages budget restriction.
What kind of job would you create for a butcher? A logger? A cowboy? A machinist? A manufacturing engineer?
Real jobs require real materials and real tools -- and real customers to buy the product. You just can't snap your fingers and create all this stuff.
Plus, why should skilled workers and professionals be coerced to work for minimum wage? Why not have different wages for different job categories like the WPA did?
The reality is that most JG jobs would involve picking up trash, or other demeaning make-work. Make-work jobs would not help the individual and would not help society.
Then there is the problem of coercion. Without a viable alternative such as a BIG, the JG is little more than slavery. (There were no unemployed blacks in the pre-civil war South)
For all those reasons, I advocate a JIG rather than a JG. And the job creation portion of my JIG would resemble the WPA, with no 80% wages budget limit, and with different wages for different job categories.
If you instead called it a "Minimum Community Service Requirement" ... there'd be a lot less resistance?
There's no reason not to build in all the flexibility you suggest, Dan.
As von Boltzmann said, no matter how closely you look at anything (even cultural policies), you find only Probability Functions, not absolutes.
What makes Neil Wilson think the basic JG idea is difficult to understand? I could explain it to a 3 year old. They implemented the idea in the guise of the WPA in the 1930s. Pericles implemented the idea 2,500 years ago in Ancient Greece.
It’s stark staring obvious that we could tell all the unemployed that their unemployment benefit is conditional on doing some simple job.
But when it comes to producing WORTHWHILE JG jobs there are problems to solve: some of them mentioned by Dan Lynch above. And the more naïve advocates of JG, like Neil Wilson, Bill Mitchell and Randy Wray have very little grasp of what those problems are – never mind the solutions.
Bill Mitchell’s ignorance about this subject is nicely illustrated by the fact that he claimed in the 1990s to have invented the idea, when the reality is that the idea is centuries old, as I pointed out above.
Employers do not want a job guarantee or full employment. Why is that so difficult to understand?
That's the downside of capitalism. Time to rethink.
"Taxes should always be low enough to sustain full employment" -- Warren Mosler
Is there any need for a job guarantee amid full employment?
There is no way to guarantee full employment in a monetary economy owing to the boom-bust cycle inherent in capitalism. That's why capitalism has to go. It's not fixable based on the assumptions.
The fact that production is dependent on workers, as well as consumption dependent on worker (majority of the population) demand makes it obvious that socialism (favoring work among the factors of production) is superior to favoring capital (money and machines). Money is a social construct of distribution by price rationing and machines are real constructs produced by people cooperating and coordinating.
The priorities are wrong and the result is dysfunction.
"Taxes should always be low enough to sustain full employment" -- Warren Mosler
While this is true in the MMT paradigm, it can be understood as (dangerously) simplistic. It's truth depends on the MMT paradigm and if it is interpreted in terms of the normal paradigm today, it could be very misleading.
"Is there any need for a job guarantee amid full employment?"
Better to ask how many ways there are to achieve full utilization of latent capabilities?
DoD calls this "Force Readiness"
More degrees of freedom than we're currently exploring?
Our grandparents would just look at us & say "There are 1001 ways to skin a cat."
cue PETA over another nominal metric :)
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