Dan Kervick commented:
Randall Wray and Bill Mitchell formulated very clear replies back in 2004 to just about every criticism I have encountered in the recent JG/ELR debate:In Defense of Employer of Last Resort: a response to Malcolm Sawyer
William Mitchell and L. Randall Wray | May 2004
Malcolm responded to this paper with another one.
ReplyDeleteEmployer of Last Resort: A extended response to my critics"
Where he states:
"The major and unique features of ELR come from creating a ‘buffer stock’ of jobs where workers
undertake temporary jobs at a minimum wage in conditions where unemployment benefit
safety net has been withdrawn.
"
Yet in all Randy and Bill's papers I have yet to see one that suggests withdrawing the unemployment safety net. At worst they state 'leave it as it is' and suggest that there might need to be a differential to 'encourage work'.
Neil, I believe that Bill has said on his blog that he prefers that employment benefits be withdrawn when a JG is instituted since working is superior to not working as far as preservation of skills, etc. goes. I don't recall where Randy stands on this. Scott would make it optional, IIRC.
ReplyDeleteBill also proposes 'gardening leave' though, where people get the JG wage if they just turn up until the state gets around to working out what to do with them (which might end up being nothing if the political will is lacking).
ReplyDeleteRandy says:
"The ELR benefit and wage package should be set higher than the benefit package given to similar individuals who do not work, but even this is not absolutely necessary. If ELR enhances one’s access to desirable private and public sector (non-ELR) jobs, then some individuals will choose to work in the ELR program even if this means no additional compensation. However, if society values work, it seems far more reasonable to reward ELR workers with a better pay and benefit package than they would receive if they did not work but were capable of working."
From the CFEPS 2007 paper:
Malcolm's response gets wobbly in the section on finance but outside of that I thought it raised interesting practical questions for how a JG would be implemented.
ReplyDeleteIt's been a while since I've read those papers but please note all the Sawyer responses are political not the mechanics of the economics.
ReplyDeleteAnd politically speaking I think he has a point.
Also my understanding of Bill's work is it is optional whether to leave the standard unemployment benefit safety net there depending on how you design the JG/ELR
I don't know what the US equivalent is but keep in mind the people that are on say a Disability Pension that are incapable of doing any work at all.
I didn't know this debate had been made before. Looks like we're now back where Sawyer had left off in his response paper in 05 (Neil's link). Were any of the issues raised addressed after that?
ReplyDeleteI have a strong feeling that things like disability pensions and other social services required to support those that are unwell and/or unable to cope with life should be moved onto the healthcare budget.
ReplyDeleteThen whether they get the money is a clinical decision, not a political one. (In countries that have a rational healthcare system of course).