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Friday lay day – Job Guarantee becomes a mainstream preference

Its my Friday lay day blog. So a rather short blog but with a research trail that can occupy the reader for hours if they pursue all the links. It seems that the mainstream American is rather progressive. Who would have thought given that public opinion is being continually drowned out by the deafening shrieking from the conservative think tanks and their media bully boys. In March 2013, a research paper from Northwestern and Princeton academics – Democracy and the Policy Preferences of Wealthy Americans – demonstrated the vastly different policy preferences held by high income Americans (in this case the top 1 per cent of the income distribution) relative to the general public. The research was motivated by the observation that the “wealthy exert more political influence than the less affluent do” and so if their preferences were not representative of American society in general then that would be “troubling for democratic policy making”. The authors find that the high income earners in the US are not only very active politically but hold ultra conservative views “concerning taxation, economic regulation, and especially social welfare programs” that are not remotely shared by the general public. The results might surprise people.

In June 2014, the unlikely sounding – Campaign for America’s Future – which is, in its own words, “the strategy center for the progressive movement”, collated the academic results and compared them to previous opinion polls in a Memo – The American Majority Is A Populist Majority.

Their opening statement was:

Of all the myths that circulate in Washington, perhaps none is more prevalent or intractable than the one that says that the United States is a center-right nation – and that majority public opinion lies somewhere between the views of conservative Democrats and those of less extreme Republicans.

However, they conclude that “Poll after poll shows that a majority of Americans hold populist opinions on a broad range of economic and political issues—opinions that are often far removed from positions held by elites”, although the mainstream media really only pumps out the elite view.

The organisation Vox Media recently (June 16, 2015) brought together this research in one of their ‘Explainers’ – Rich people are jerks, explained. The graphic they produced by way of summary (reproduced below) is worth considering.

Vox_elite_general_graphic_June_16_2015

While many people vilify the idea of a Job Guarantee the majority of Americans (in the 99 per cent of the income distribution) believe that:

1. The government out to see to it that everyone who wants to work can find a job (68 per cent).

But, even more specifically:

2. The government should provide jobs for everyone who cannot find a job in private employment (53 per cent).

The weight of opposition (given the skewed access to the political process) to those propositions clearly comes from the elites in the US.

Proposition 1 means the majority of the US citizens believe in true full employment (government should ensure that everyone who wants to work can find a job) and Proposition 2 places the responsibility for the provision of those jobs firmly in the Government’s court.

These propositions are at the heart of Modern Monetary Theory (MMT). They ensure that the population always has income security, which is essential for economic stability and provides mechanisms for achieving full employment and price stability.

So next time you read that the Job Guarantee is some wacky left-wing dream time concept think about these results.

The only issue is that while the vast majority of Americans appear to hold relatively progressive views about equity and participation, the economics that are required to achieve these outcomes are implicitly flawed.

Note the questions about tax funding of spending etc.

The majority is also rather xenophobic.

Interesting study on the absence of social mobility in the UK

On June 14, 2015, the British Social Mobility and Child Poverty Commission released a major research report – Non-educational barriers to the elite professions evaluation – which examined the “barriers to entry for people from less privileged backgrounds to elite law and accountancy firms in London and financial firms in Scotland”. The findings have relevance for most nations were entrenched privilege

The study found that:

1. “working-class applicants struggle to get access to top jobs in the UK”.

2. “elite firms are systematically excluding bright working-class applicants from their workforce”.

3. “70% of job offers in 2014 were to graduates who had been educated at a selective state or fee-paying school, compared to 4% and 7% of the population as a whole”.

The Chair of the Commission summarised the results in this way (Source):

This research shows that young people with working-class backgrounds are being systematically locked out of top jobs. Elite firms seem to require applicants to pass a ‘poshness test’ to gain entry. Inevitably that ends up excluding youngsters who have the right sort of grades and abilities but whose parents do not have the right sort of bank balances.

So the way people speak (accents), where they went to school, their presentation etc are being used as screening devices instead of talent and aptitude.

The Report quotes one of the one elite recruiters who was “describing applicants from working class backgrounds” who had gone to non-preferred universities:

We do see the problem and for us it boils down almost to a budgetary one, being frank about it … is there a diamond in the rough out there at the University of XXXX? Is there a diamond out there? … statistically it’s highly probable but the question is … how much mud do I have to sift through in that population to find that diamond? A reasonable amount … we’ve got a finite resource in terms of people hours and finite budget in terms of cost to target there

The Report describes the way that these firms filter out applications that they deem not to be ‘posh’ enough. They talk of people lacking “polish”

The import of the results is clear. Any notion that British society promotes social mobility is rejected. Which means that Britain is not using its valuable human resources to their potential.

These employers prefer to discriminate against talent in favour of their social networks and will thus be drawing on a pool on increasingly decreasing talent and aptitudes.

The employers are thus likely imposing costs on their own operations merely to indulge in class discrimination.

The Report suggests that the social networks persist because the firms operate in a protected way. Their business comes from networks which just reinforces the situation.

Some of the recruiters tried to argue that “And, I’m sorry, but it is absolutely true that homogeneity breeds a huge amount of efficiency in organisations” such that “I can sort of write, you know, an obscure comment in the margin and you’ll know exactly what I’m talking about. You get my jokes. There’s not a risk that I’m going to offend you by saying something, because we get each other and that’s hugely efficient.”

So I guess they all sit around writing “golly gosh, old bean (or old fruit), isn’t that new girl in the typing pool just frightfully jolly hockey sticks”, “By Jove, your right old fellow, an absolutely spiffing assessment, old chap”. “Yes, it is a jolly good show that they hired her.” “Good grief, a jolly good show”.

And the rest of the nonsense.

It brings the role of education in a capitalist economy clearly. Education is not about skill enhanced necessarily but a vehicle for class division.

Please read my blogs – I feel good knowing there are libraries full of books and Education – a vehicle for class division – for more discussion on this point.

Ernest Ranglin: NPR Music Tiny Desk Concert

I love the NPR Music Tiny Desk Concerts – stripped back musicians on the tiniest of stages with their skills to the fore. Perfect.

Here is one of my favourite guitar players – the 82 year old Jamaican jazz-reggae player Ernest Ranglin playing with his band Avila. He plays in such a lyrical way with a unique mix of percussive, muted notes, melody and stripped down chords and octaves.

Beautiful.

More information is – HERE.

Saturday Quiz

The Saturday Quiz will be back again tomorrow. It will be of an appropriate order of difficulty (-:

That is enough for today!

(c) Copyright 2015 William Mitchell. All Rights Reserved.

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    This Post Has 20 Comments
    1. Are there similar studies into the policy preferences in other countries anywhere? Obviously I’d like to see one for the UK, but obviously the views in other countries would be just as intriguing.

      It’d be interesting to see if this dichotomy is replicated outside the USA and whether it is as marked elsewhere.

      If it doesn’t exist, how do we get the research off the ground to find out?

    2. I don’t find anything even remotely suprising about the results of this research.
      The situation in Australia is similar but as long as you are willing to swallow the neo-liberal pill most [though not all] organisations will take you on.
      However, in the financial sector I would be more confident of getting a good job if I went to the Cranbrook School and barely passed the HSC than I would with a distinction average degree in economics from a public university.

    3. Two interesting studies highlighted today. One from the USA which gives hope and one from the UK which shows how entrenched the Establishment is and how good it is at fighting back against any progressive change. Here in China you and your families guanxi (connections/relations) is all important. Interestingly, the two separate words, guan and xi, mean shut/close and system/department.

      Love the music recommendation today.

    4. @Bill – The quotes you have mentioned in blue are not there in the report but in the news articles. The way you have presented the information makes it look as if its in the report. Could you please cite the news article you got the quotes from?

    5. Dear Bill

      The majority isn’t really xenophobic in the sense that they have an irrational fear of foreigners or hate people simply because they are different. The majority in rich countries perceive, however dimly, that there is an objective alliance between the rich in the richer countries and the poor in the poorer countries. To the majority in rich countries, the poor in foreign countries are competition, while to the rich minority in rich countries, the poor in foreign countries are a source of cheap labor, to which they would like to have access through foreign investment or immigration.

      When the Netherlands started to import “guest” workers in the late sixties, the Dutch trade unions did a survey among unionized workers about their views with regard to the “guest” workers. The results, predictably enough, were that a vast majority of them were opposed to the arrival of the “guest” workers. It should be pointed out again and again that mass immigration is never good for the masses but only for the propertied classes.

      As to foreign investment, here the situation is more ambiguous, but by and large there is no reason to assume that the masses in rich countries derive a benefit from the fact that their capitalists invest abroad. If no Australian could invest a dime abroad, would that be injurious to the interest of the vast majority in Australia? I don’t think so. Did Americans in general derive a benefit from the fact that MacDonald’s covered the planet with its restaurants? I doubt it very much.

      If there is national capitalism, that is, the capitalists in a country only employ labor from that country, then there is far more harmony of interest between labor and capital then when there is global capitalism. To global capitalists, countries are only sources of profits. Never trust a global capitalist.

      Regards. James

    6. The preferences would seem to indicate that the monied “elite” have little to no loyalty to the nations or peoples who initially provided the means to attain their own wealth. On the other hand, I am surprised that the support for things like government assuring people have food, clothing and shelter among the general public is only 68%. “What a mind job” (from the film The Matrix).
      Not only have we stopped following progressive practices, we are in danger of unravelling all that has been acheived to date.
      Was it Dickens who warned about ingnorance and want? How long ago was that?

    7. “Are there similar studies into the policy preferences in other countries anywhere? ”

      Haven’t seen one as comprehensive as the one in the US but there are polls covering single issues like the privatisation of healthcare here in Sweden where poll after poll year after year shows that around 70 percent are against it.
      The pattern is the same, mainstream media including Swedish public service television/radio pumps out the elite view and bury unpleasant question of fact by instead highlight endless amounts of “confidence” polls.
      Once a move is established (even if it isn’t statistically significant) another one comes along to reinforce the earlier poll.

      Right now this “confidence” polls tactic is really obvious when the minority government has said it wants to inquire how the public financing of privately rendered welfare services can be regulated to limit the huge leakage these companies stand for when they refuse to reinvest profits into new real operation. So just something as small as a will to inquire is making the elites go into hysterics.

    8. Larry said: “One question I would ask, and I don’t doubt the results of the research, is why these preferences do not show up in election results.”

      Elections only allow you to choose among candidates who were initially selected by the small minority of committed party members who bother to participate in the candidate selection process (which varies from state to state). It costs a lot to be a candidate for any state-wide or national office so the only names put forth are those who are supported by big money. I wouldn’t rule out the possibility of a more populist candidate gaining support, but it’s a big uphill battle.

      On a more upbeat note, I’ve recently run into two otherwise fairly conservative people who like what they hear from Bernie Sanders, so I think perhaps he may gain some traction that will surprise many people who think that Clinton is a lock for the 2016 Democratic presidential nomination. With Stephanie Kelton to guide his economic policy maybe there is some hope here in the U.S.

    9. There is a body of PK opinion that is anti free trade because free trade favours the rich who have market power. For example Keynes, Kaldor and Robinson were all opposed to free trade and were critical of Ricardian trade theory. They opposed free trade because it exploits the poorest nations and produces outcomes that are unfair. Even if we accept comparative advantage (which many don’t) free trade will still produce inequitable results.

      Lets assume that there is a new use for a rare earth but this rare earth is found only in the poorest country in the world. According to comparative advantage, free trade will produce the most efficient outcome in terms of the distribution of real costs. But what are the real costs in this case? According to the old Keynesians these are the real resource costs in the past. Keynes characterised Ricardo’s theories as relating to distributional efficiency. Therefore the efficient distribution of real costs is to carry the rare earth to a ship and ship it off to a rich country that has the technology to make use of it.

      Comparative advantage is only concerned with distribution of real costs but what about the opportunity costs? One opportunity cost for the poor country is the lost use of the rare earth for the entire life of the secondary goods derived from it and dependent on it. This is a massive opportunity cost that is lost in return for a small efficiency in real cost. Could efficiency be sub-optimal? It would appear to be the case that efficiency is defined within a constrained search space whereas inefficiency can relax the search constraints. The division between real costs and opportunity costs is one problem with free trade. There are others.

      The fact that a capitalist system only prices costs in the past isn’t only a problem of fairness. It’s an environmental problem and also one of sustainability generally. Therefore future costs are a second problem with free trade. The long term environmental damage caused by mining the fictional rare earth may create large real costs for future generations. In a democratic country, a national population may vote to enact environmental statutes that prevent this but democracy is largely a national phenomena.

      Another problem with comparative advantage is one of realpolitik. As we have seen many times, rich countries will go to war and murder people in poor countries if poor countries have some resource that the rich countries want. If poor countries don’t have the power to resist this then the only practical way of preventing these crimes is for people in rich countries to oppose them.

      China is now a rich country but it doesn’t necessarily follow that free trade between rich countries is the right thing either. Do people within the MMT group oppose TPP and TPIP? These are trade agreements that restrict the role of government. Within the EU we have similar treaties in place already, for example the treaties which open up state railways to private contracts. The UK railway system is considered by the general population to be dysfunctional and expensive. Most people in the UK favour renationalisation of railways as contracts expire. Unfortunately this is probably not legal because free trade treaties have been signed to prevent this.

    10. Just to be clear, I am not accepting marginal pricing and equilibrium. The points above apply, even if you believe in classical price theories (which I don’t).

    11. @larry ~

      These preferences don’t show up at the polls because candidates reflecting them don’t show up on the ballot. They don’t show up on the ballot because the 1% don’t provide them funding to get there, and because the media will only provide coverage to candidates who have money for substantial ad buys.

    12. @James – Witness the recent controversy over the Disney IT layoffs in the US. Workers are not only replaced by untrained immigrant workers through the H-1B program, but are required to train their replacements under the terms of their severance. http://www.theatlantic.com/business/archive/2015/06/disney-h1b-visas-immigration-layoffs/396149/

      This issue is beginning to drive a stake between unfettered capitalism and public opinion. The H-1B program is openly abused by corporations, while the federal government does nothing to enforce the program’s rules. Whether this controversy results in any political action remains to be seen.

      My hope is that the US would shift progressive as the young generations reach voting age and become politically active. This isn’t taking hold the way I had hoped–among the youth I know, I can broadly categorize them as the “don’t know don’t care” group who do little to influence political opinion (if they even vote), and a more idealistic group who has fallen for the libertarian myths. The latter movement tends to side with the right, favoring smaller government.

    13. “These preferences don’t show up at the polls because candidates reflecting them don’t show up on the ballot.”

      Not even an aspiring dog catcher would stand for election espousing these views.

      The ghost of Joe McCarthy still haunts the American psyche.

    14. 1: The U.S. top 1% apparently does not believe in “work, not handouts,” when 43% agree that “government must see that no one is without food, clothing, or shelter;” but, only 8% agree that “the government should provide jobs for everyone who cannot find a job in private employment.”

      2: The article about elite entry into U.K. jobs reminds me of this “Rolling Stone” article:

      http://www.rollingstone.com/culture/news/confessions-of-an-ivy-league-frat-boy-inside-dartmouths-hazing-abuses-20120328

      It basically states that often Wall Street firms hire on the basis of how far potential employees projectile-vomit at fraternity parties.

    15. On this vein, I was wondering if we could improve the current refugee mess world wide by introducing a job guarantee and or pay a living pension or similar to people all around the world?
      Many migrants are job seekers fleeing the lack of opportunity at home. Others of course are fleeing violence. Both are related to poor governance as well as physical problems like droughts. Overpopulation can to some extent be addressed by having an income.
      To pay, the MMT fact that Central governments can pay or spend money into existence could be expanded to encompass the international community. If the World bank or the IMF are or can be made monetarily sovereign, they could use Special drawing rights, for example, to fund programs in every country to achieve these goals.
      The offset back up would be the total GDP or whatever other measure chosen for the entire world economy.
      IMO, It would be a lot less wasteful and a lot less expensive than ministering to the hordes crossing the Mediterranean etc we see today!

    16. Another excellent blog .I do like it when you let your egalitarian side shine.
      Many have correctly commented that political and media funding tends to
      in a sense vet would be candidates for leadership positions of potential election
      winning political parties but i cannot help wonder if there is something else to it.
      It being this paradox of voter preference for progressive policies versus progressive
      governments.
      Two things come to mind .The fear factor the sense that to rock the boat would risk
      drowning[shortages inflation,loss of savings]The elites down the ages have played the
      fear card starting with risking the wrath of a temperamental gods or god down to the
      present day you might lose your job and be worse of if you ask for too much.Economics
      which present there is no alternative or even egalitarian mitigation of ‘free’ markets is
      the theology of a new faith.”Men hue an image out of fear and call it god”
      The other card the elites have always played so well is divide and conquer .That’s a whole
      other diatribe suffice to say social animals can rely on self worth from the other.At least
      the working poor can gain some satisfaction from competition from the non working poor.

    17. “It basically states that often Wall Street firms hire on the basis of how far potential employees projectile-vomit at fraternity parties.”
      Total madness. Can you imagine any other firm doing this?

    18. @ Neil Wilson

      There is some evidence from the UK polling.

      ‘68% of the public say the energy companies should be run in the public sector, while only 21% say they should remain in private hands. 66% support nationalising the railway companies while 23% think they should be run privately. The British people also tend strongly to prefer a publicly-run National Health Service (as it is now) and a publicly-run Royal Mail (as it was until this year). ‘

      https://yougov.co.uk/news/2013/11/04/nationalise-energy-and-rail-companies-say-public/

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