… the introduction of a Job Guarantee would eliminate poverty arising from unemployment and the working poor because the Government could condition the minimum wage by where it set the Job Guarantee wage. If it truly desired to end poverty among those in employment then it would set the Job Guarantee accordingly. Others argue that a more direct way of dealing with poverty and lack of income is to just provide the income via a Basic Income Guarantee (BIG). The BIG idea has captured the progressive side of politics and many on the Right. It is another one of those sneaky neo-liberal ideas that look good on the surface but are rotten not far below. Supporters of BIG are really absolving currency-issuing governments of their responsibility to use their fiscal capacities to ensure there are sufficient jobs created – whether in the non-government or government sector. They are thus going along with the neo-liberal attack on the right to work. Moreover, closer analysis reveals that the introduction of the BIG would not, under current institutional arrangements reduce poverty at all....I think Bill on to an ket point in saying that basic income is neoliberal, based on neoclassical economics including New Keynesianism. This implies that the JG is based on social welfare based on Keynesian economics, including Post Keynesianism and MMT.
The key point is the difference between creating a buffers stock of employed to ensure full employment in the sense of a job offer for everyone willing and able to work, and buffer stock of unemployed that must be supported by transfer payments over one sort or another.
Basic income does not address this key point, and obscures the tradeoffs by emphasizing the benefits while minimizing the costs and externalties. Basic income is like treating a serious wasting disease with an analgesic like aspirin.
Bill Mitchell – billy blog
A Basic Income Guarantee does not reduce poverty
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia
