It's Wednesday, and as usual I scout around various issues that I have been thinking…
The Job Guarantee and contributory unemployment benefits systems
The unemployment rate in Finland is climbing steadily and in October 2015 was 9.6 per cent (seasonally adjusted) and the employment to population ratio stood at 60.1 per cent and was trending down. Finland is fast becoming the next basket case of the Eurozone. What was once a highly supportive society is steadily being turned into a austerity-ridden backwater. The latest news, however, that the Finnish government is due to debate a proposal to provide every citizen with a basic income of €800 a month has excited the progressives – unfortunately. The proposal currently being prepared by the national agency that administers the Finnish welfare system (KELA) would offer this basic allowance in lieu of all other existing benefit payments. It would be paid regardless of whether the person received income from any other source. I have been considering the Finnish welfare system over the last month or so since my visit there in October. This is in relation to a series of queries I had from activists there who were keen on the Modern Monetary Theory (MMT) Job Guarantee proposal but were wondering how it would situate itself within the existing system of unemployment benefits in Finland. This blog captures my thoughts on both of those topics.
My recent blogs about Finland include:
1. Full video – University of Helsinki lecture, October 9, 2015
2. the Unit Labour Costs obsession in Finland
3. Finland – more austerity is not the answer
I won’t repeat much of what I’ve written there in this blog. So by way of background to what I have to say here you may want to refresh your memories by reading 2) and 3) above.
When I was in Finland in early October this year I have one interesting meeting with the former National labour minister Jouko Kajanoja, who also has worked as a research manager for Kela (aka The Social Insurance Institution of Finland), which administers the Finnish welfare system.
Jouko and the others at the meeting were interested in discussing the Job Guarantee (JG) in relation to its implementation in Finland, in the context of the particular structure of that nation’s welfare system, specifically the unemployment benefits system.
In fact, the questions that were raised have relevance for many nations that have tiered unemployment benefits, which are in some way differentiated by the wage that the unemployed person earned prior to becoming unemployed.
The specific issue discussed was this: the JG advocates a single and fixed wage being paid to all workers in the JG pool, who cannot find work elsewhere but wish to receive a stable income.
In Finland, as in other nations, the unemployment benefit system is quite complex. Broadly speaking, the system has to elements, which are administered separately by private insurance funds, on the one hand, and KELA, on the other hand.
KELA “is an independent social security institution with its own administration and finances”, which is “supervised by the Finnish Parliament”. Its operations are governed by the Finnish Constitution and relevant social security legislation and legal interpretations of the same, which define social rights in Finland.
KELA provide “a basic allowance”, which is “paid for a maximum of 500 days”. A person aged between 17 and 67 years “who meet their work requirement but are not enrolled in any unemployment fund” are entitled to receive the basic unemployment allowance.
The – Statistical Yearbook on Unemployment Protection in Finland 2014 – says that:
The entitlement to basic unemployment allowance and its possible supplementary parts is determined on the same grounds as for earnings-related unemployment allowance, except for membership in an unemployment fund.
in 2014, the basic allowance was €32.66 per day, with supplements for children.
The unemployed in Finland can also receive an “earnings -related unemployment allowance”, if they have “completed 34 calendar weeks of eligible employment during the preceding 28 months” and are members of a relevant unemployment fund.
The 2014 KELA yearbook says:
The earnings-related unemployment allowance consists of a basic amount equal to the basic unemployment allowance and of an earnings-related amount … The earnings-related amount is determined by reference to the recipient’s earnings before unemployment. It is equal to 45 percent of the difference between the daily salary and the basic amount … The earnings-related unemployment allowance is payable five days a week for a maximum of 500 days of unemployment. Another 500 days of eligibility are available as soon the recipient requalifies.
There are all sorts of additional conditions and qualifying rules, etc governing the system, which we do not need to go into here, but clearly need to be addressed if one was seeking to write a procedure manual for implementing a Job Guarantee in Finland.
The unemployment benefit system in Finland (as in other nations) is funded by a combination of central government public spending (basic allowance) and “insurance contributions collected from employers and employees” and “voluntary membership feeds paid to unemployment funds”.
The 2014 KELA yearbook says that:
A total of 413,200 persons received unemployment benefits at year-end 2014, which represents 12% of the Finnish population between ages 17 and 64 … Of them, 54% were in receipt of a basic unemployment benefit.
In other words, “a total of 181,405 persons were in receipt of earnings-related allowance, representing an increase of 22,800 persons on the previous year”.
56 per cent of the total expenditure on unemployment benefits in Finland in 2014 came from public sources, 35 per cent came from the Unemployment Insurance Fund (which accumulates the compulsory insurance payments), 5 per cent came from local government and 3 per cent came from the membership fees.
So the topic of the discussion that evening was how would a fixed-wage JG system, which augmented that fixed wage with national productivity distributions on an annual, say basis, work in the system of unemployment benefits where the majority of recipients would be entitled to income support under the various insurance arrangements that would be in excess of the JG wage?
It was an illuminating conversation and bears on the question of running the JG alongside existing income support systems (specifically those targeting unemployment support).
I have also noted noise in the blogosphere in recent months advocating a wage structure for the JG. Let’s dispense with that notion immediately.
For all my JG blogs go to the articles that appear under the – Job Guarantee Category. Bear in mind that these are more specific blogs about the JG and are supported by many other articles, which outline theory, data etc. You can start to learn the macroeconomic essentials by accessing the blogs under the – Debriefing 101 Category – of my blog.
These blogs, however, are just an entree into my work on the topic. The substantive literature is in the academic domain, which has been developed over many years. I decided to start a blog in 2004 to provide a more public focus for some of this literature in terms of summary points and ease of exposition. But one should not assess the concept of a JG by only considering the blogs, or a subset of them, perhaps the latest blog on the topic.
I think the blog platform is a potentially liberating force in society as it breaks the hold that the publishing companies have on the dissemination of information and argument.
However, I have observed a tendency in the blogosphere for participants (particularly commentators) to see it as a platform for the knee-jerk venting of raw prejudice. I read statements such as “MMT should drop the crazy Job Guarantee idea” and “Bill Mitchell wants everyone to be enslaved in a low wage job”, and comments such as that.
This then leads the commentator to wax lyrical about how stupid or oppressive MMT is for advocating such a ridiculous idea – that people who want to work who cannot find work in the private sector should be provided with a decent job in the public sector. The shock of it all.
It is clear that these commentators haven’t read very much of my work; have never considered the nuances that you will find in it; and haven’t considered that I (and the rest of the original MMT proponents) might have anticipated and addressed all of the likely criticisms of an employment guarantee that could be raised in the long literature that we have constructed on the topic.
Each new commentator – seems to think they have a privileged position to rant about our work without any knowledge of the long-history of that work.
While it is clear – if you read the many articles, books etc that I have published in the academic literature – that I consider the JG to be part of a liberal and radical agenda to transform the way we use the economy to advance a very broad and egalitarian conception of public purpose, the blogosphere commentators still seem content to conduct their attacks on spurious grounds.
In this blog – The Job Guarantee is a progressive vehicle for change – I outline how the JG provides a path to something very progressive and very radical in terms of the norms that govern public perception at present.
But it does it by starting with the standard norm that people who can work should do so (given that the unemployed overwhelmingly indicate they want to work) and then moving the concept of productive work further away from today’s norm and towards something quite different and quite lateral.
By way of summary the JG has the following features:
- The JG should not be seen as a ‘job creation’ scheme. Narrowing one’s perception in that way severely limits and understanding of its role in a macroeconomic stability framework.
- The JG works on the “buffer stock” principle and provides an ‘inflation anchor’, which means that, in the context of the macroeconomic literature, it eliminates the trade-off between inflation and unemployment (the so-called Phillips Curve). That is radical in itself.
- The JG requires that the national government operates a buffer stock of jobs to absorb workers who are unable to find employment in the private sector. The pool expands (declines) when private sector activity declines (expands). The JG fulfills this absorption function to minimise the costs associated with the flux of the economy. So the government continuously absorbs into employment, workers that are displaced from the private sector.
- The JG stands in contradistinction to the current approach, which uses an unemployment buffer stock to discipline the inflation process. The costs of this buffer stock approach to macro stability are enormous in both system-wide terms (lost income) and personal terms.
- Employment buffer stocks serve to control inflation while not sacrificing the full employment goal. When the level of private sector activity is such that wage-price pressures forms as the precursor to an inflationary episode, the government manipulates fiscal and monetary policy settings (preferably fiscal policy) to reduce the level of private sector demand. This would see labour being transferred from the inflating sector to the “fixed wage” sector and eventually this would resolve the inflation pressures. Clearly, when unemployment is high this situation will not arise.
- In general, there cannot be inflationary pressures arising from a policy that sees the Government offering a fixed wage to any labour that is unwanted by other employers. The JG involves the Government ‘buying labour off the bottom’ rather than competing in the market for labour. By definition, the unemployed have no market price because there is no market demand for their services. So the JG just offers a wage to anyone who wants it.
- Under the JG, the ‘buffer stock’ employees would be paid the minimum wage, which defines a wage floor for the economy. Government employment and spending automatically increases (decreases) as jobs are lost (gained) in the private sector.
- To avoid disturbing private sector wage structure and to ensure the JG is consistent with stable inflation, the JG wage rate is best set at the minimum wage level. The JG wage may be set higher to facilitate an industry policy function, by which I mean, if the government considers the private wage floor is too low then it can force dynamic change in the private sector by setting the JG wage above that private wage floor. Firms that are unwilling to increase their productivity levels will thus be unable to attract the necessary labour and they will, rightfully, go out of business.
- The minimum wage should not be determined by the capacity to pay of the private sector. It should be an expression of the aspiration of the society of the lowest acceptable standard of living. Any private operators who cannot ‘afford’ to pay the minimum should exit the economy.
- The JG wage would be supplemented with a wide range of social wage expenditures, including adequate levels of public education, health, child care, and access to legal aid. Further, the JG policy does not replace conventional use of fiscal policy to achieve social and economic outcomes.
- The JG is not a form of Workfare, the latter which does not provide secure employment with conditions consistent with norms established in the community with respect and non-wage benefits and the like. Under the JG workers could remain employed for as long as they wanted the work. There would be no compulsion on them to seek private work. They could also choose full-time hours or any fraction thereof.
- Training ladders can be integrated into the paid-work JG environment. However, if a JG worker chose not to undertake further training no pressure would be placed upon them to do so.
- The existing unemployment benefits scheme could be maintained alongside the JG program, depending on the government’s preference and conception of mutual responsibility. My personal preference is to abandon the unemployment benefits scheme and free the associated administrative infrastructure for JG operations. In other words, I do not personally see the JG as being optional for someone who wants to draw on state income support but does not want to contribute back to society.
A more detailed discussion of the basics of the JG are outlined in this blog – What is a Job Guarantee?.
For detailed analysis and answers to all the questions you might have please consult the following work.
- Creating effective local labour markets: a new framework for regional employment policy – this report was the result of a three-year study and extensive interviews with Local Government engineers and managers.
- Mitchell, W.F. (1998) ‘The Buffer Stock Employment Model and the NAIRU: The Path to Full Employment’, Journal of Economic Issues, 32(2), June, 1-9.
As I explained at my meeting in Helsinki that I referred to above it would undermined one of the basic elements of the JG to create a wage structure within it.
The fixed-wage characteristic is an essential element of its capacity to provide an inflation anchor. There should be no hint that the government is competing at market prices with other buyers of labour.
Essentially, the government is dealing with workers who have a zero ‘bid’ for their services from the private sector. The government is offering to these workers a job at a wage, which will ensure the worker is not socially excluded and can enjoy a reasonable standard of living.
These workers can also enjoy real wage growth over time as productivity in the economy as a whole grows.
But once the government started paying differential wages to the JG workers in accordance with their previous wage levels, the capacity to use the buffer stock of jobs to discipline the inflation generating process is lost.
I emphasise that the JG is a macro stability framework rather than a job creation program.
The other thing to reflect on is that in times of mass unemployment it is the most disadvantaged workers in the labour market that endure long-term unemployment. It is true that professional classes lose jobs and become unemployed.
Many of these workers do not even take unemployment benefits because they typically negotiate redundancy payouts which tide them over until they can find alternative work.
There is a concept in labour economics called ‘Wait Unemployment’ – which refers to workers of this ilk. They would neither take unemployment benefits or a JG job for various reasons and prefer to ‘wait’ for a new job to emerge. One of the reasons for this type of observed behaviour is that the professional class, typically, has much lower durations of unemployment than the more disadvantaged, unskilled workers.
Given that the JG pool is likely to be dominated by the most disadvantaged workers during a sustained downturn, the issue raised about the structure of the unemployment benefit system noted above, is likely to be relatively insignificant.
The JG wage would only have to be set above the existing basic unemployment allowance in Finland for it to be attractive to workers and eliminating the basic support would therefore not disadvantage those workers.
The question then is what to do with the workers who receive earnings-related unemployment benefits, which would be well above even a generous JG wage?
My response was that in these situations, given the historical and institutional importance of these contributory schemes, the JG wage could be offered unconditionally alongside the continuation of the earnings-related unemployment schemes.
Then the worker could decide what option would best serve them upon job loss. For many (the majority in Finland according to the 2014 data), the JG would be the most beneficial.
For others, remaining on their existing income support would be most beneficial.
What would happen when a worker’s eligibility to receive insurance-type support ran out is another question. At present, in Finland, they qualify for a labour subsidy of some sort.
In the unlikely event that a skilled worker would remain unemployed beyond the eligibility period (that is, assuming governments do not remain obsessed with austerity), the worker would be confronted with the JG or no support. At that point, clearly, the JG is the most beneficial option.
Income guarantees
Most major newspapers in the last day or so have carried the story that Finland is debating the idea of giving every citizen a basic income of €800 a month. This is not new. They have been discussing this for some time now and the current right-wing government sees it as a way of reducing welfare spending.
Need I add, that one of the most vocal proponents of a basic income scheme (in the form of a negative income taxation scheme) was Milton Friedman, arch type right-winger. So the idea is not exclusively ‘progressive’.
The UK Telegraph story (December 6, 2015) – Finland is considering giving every citizen €800 a month – is as representative as any of the recent news stories on the proposed basic income introduction.
We learn that:
Under proposals being draw up by the Finnish Social Insurance Institution (Kela), this national basic income would replace all other benefit payments, and would be paid to all adults regardless of whether or not they receive any other income.
I have written extensively (alone and with others) on the superiority of employment guarantees over income guarantees. Please read my blog – Employment guarantees are better than income guarantees – for more discussion on this point.
But if you want a deeper, academic discussion, then we have published several peer-reviewed articles on the topic that the above blog merely summarises.
In summary, I don’t think humans should be treated as meagre ‘consumption units’ and I oppose the use of a Basic Income Guarantees as the primary means of poverty reduction for the following reasons:
- It creates a dependency on passive welfare payments.
- It creates a stigmatised cohort.
- It does not provide any inflation buffer and is inconsistent with the macroeconomic principles spelt out by MMT.
- It does not provide any capacity building. A BIG treats people who are unable to find adequate market-based work as “consumption” entities and attempts to meet their consumption needs. However, the intrinsic social and capacity building role of participating in paid work is ignored and hence undervalued. It is sometimes said that beyond all the benefits in terms of self-esteem, social inclusion, confidence-building, skill augmentation and the like, a priceless benefit of creating full employment is that the “children see at least one parent going to work each morning”. In other words, it creates an intergenerational stimulus that the BIG approach can never create.
Unlike the BIG model, the Job Guarantee model meets these conditions within the constraints of a monetary capitalist system.
The JG is a far better vehicle to rebuild a sense of community and the purposeful nature of work. It is the only real alternative if intergenerational disadvantage is to be avoided.
It also provides the framework whereby the concept of work itself can be broadened to include activities that many would currently dismiss as being leisure, which is consistent with the aspirations of some BIG advocates.
There has been considerable research done by social scientists which suggests that people still consider work to be a central aspect of life and there are deep-seated views about deservingness and responsibility for one’s circumstances. These views translate into very firm attitudes about mutual obligation and how much support should be provided to the unemployed.
These attitudes while mostly unhelpful are ingrained and will take time to shift. Further, most unemployed workers indicate in surveys that they prefer to work rather than be provided with income support.
If the vast majority of workers prefer to work then the systemic failure to provide a sufficient quantum of jobs imposes harsh costs that can be alleviated by the introduction of a Job Guarantee. In this regard, the Job Guarantee is a source of freedom – the capitalist property relations notwithstanding.
I accept that some people – the so-called “sea-changers” – do not value work in any intrinsic sense and if confronted with the choice between the Job Guarantee and a Basic Income would take the latter option every time. A blanket Job Guarantee is coercive in its impact on this particular group.
Please read my blog – Would the Job Guarantee be coercive? – for more discussion on this point.
The future of paid work is clearly an important debate. The traditional moral views about the virtues of work – which are exploited by the capitalist class – need to be recast.
Conclusion
The Job Guarantee can easily co-exist with contributory unemployment insurance benefits systems, although such a coexistence is administratively more complex than eliminating all existing unemployment benefits systems and replacing them with a JG.
There would be a switch-point where from an individual perspective one system became superior to the other.
But for the disadvantaged workers, who overwhelmingly, make up the long-term unemployed, the JG will always be the superior option.
That is enough for today!
(c) Copyright 2015 William Mitchell. All Rights Reserved.
Bill –
Have you considered removing the JG from MMT and instead reclassifying it as MMP (Modern Monetary Practice)?
Not only would this prevent MMT from being so easily dismissed by those who don’t understand the JG, but it would also increase support for MMT. And the visibility of MMT would be boosted by the MMT based debates between those who think the JG would be the best solution and those who think it wouldn’t.
Dear Bill,
Of the 4 reasons that ground your opposition to a BIG as the primary means for poverty reduction it seems that reason number two – creation of a stigmatised cohort – may not apply in the specific case of the Finnish BIG proposal, since the same sum of 800 euros a month would be paid to all adults regardless of whether they have other sources of income or not.
Do you see this feature of universal application as an improvement over other cases where the BIG is targeted exclusively to certain sectors of the population, such as the unemployed or individuals whose income is below the poverty line?
I think the best solution to this problem is a government commitment to crowdsourcing. People would gain opportunities to make money doing what they do best, while governments would benefit from having solutions to their problems, and from greater scrutiny. However, convincing governments to implement something that gives greater scrutiny would be difficult.
The problem you fail to address is the logistical concerns of introducing the JG and the likely
impacts on prices considering the current state of the job market.I understand where you want
to go and am not against an economic system underpinned by a defacto minimum wage job
guarantee and I am absolutely in favour of expanding employment in the public sector.
We are not only faced with involuntary unemployment but also involuntary underemployment.
The impact of this on full time work is also profound.A profusion of low paid,tempary work
in an exploitative bullying envirememt.Competition at the bottom of the labour market becomes
an enormous logistical problem with wide spread impacts on the costs of employees and prices
charged when the bottom of the labour market is as large a section of the labour market as it is
today.
In the heyday of the post war settlement and wide spread low rates of unemployment across the
OECD countries the introduction of the JG would have been relatively easy but completely opposed
by employers.Today here in the UK millions upon millions would seek out JG positions and many
millions more would arrive from the EU .In order to compete employers would have to significantly
raise wages ,increased costs which they would seek to pass on in price rises to protect profits.
Progressive taxation is a fundamental good to mitigate the inevitable income inequalities in
the private sector which reflect inequalities of power.Negative rates of tax for the low paid are
a necessary part of that in today’s labour market.The problem with basic income guarantees are
that are proposed within the neo liberal context.Obviously Finland needs fiscal stimulus to
target growing unemployment and BIG and expansion of public sector employment can both
be a part of a strategy to tackle involuntary unemployment and low incomes.
“As I explained at my meeting in Helsinki that I referred to above it would undermined one of the basic elements of the JG to create a wage structure within it.”
The existing public sector provides the wage structure. If you want a public sector job at a higher wage than the living wage, then you need to convince your peers in society to contribute the tax necessary to fund your higher wage.
If you are as awesome as you think, then there should be no problem doing that. People will willingly contribute because they can see the clear benefits of your awesomeness.
“Have you considered removing the JG from MMT”
Since that removes the anchor from the financial circuit into the real production circuit, why would you want to do that?
Remove the anchor and the unemployment buffer and you will likely spiral into classic Keynesian collapse at the first shock that hits the anchor point.
Those who want to rerun the 1970s are welcome to try to do so.
“Most major newspapers in the last day or so have carried the story that Finland is debating the idea of giving every citizen a basic income of €800 a month”
Is that really a basic income though? Is it the same as the state pension level and does it allow genuine independent living.
For me a basic income is a essentially a universal state pension. You can live on it at a basic level of existence without any need to work.
Until you get to that level then really it isn’t an income guarantee at all. It is a form of ‘tax credits’ – topping up private sector wages.
The other factor is that Finland is a part of a larger fixed exchange currency zone. So other people in other parts of the currency zone won’t be receiving the basic income. They provide the production buffer that feeds the basic income zone.
All the income experiments end up in this spot – a substandard income operating in part of a currency zone. Nobody has yet provided a full pension in an entire currency zone.
“Of the 4 reasons that ground your opposition to a BIG as the primary means for poverty reduction it seems that reason number two – creation of a stigmatised cohort – may not apply in the specific case of the Finnish BIG proposal, since the same sum of 800 euros a month would be paid to all adults regardless of whether they have other sources of income or not.”
The idea that paying everybody some money gets rid of stigma is frankly very naive. You actually end up with two stigma points.
(i) paying state income to millionaires who “don’t need it”.
(ii) paying state income to people who then lay in bed all day drinking beer. Those are the “scroungers”.
People who go out and work – and pay the 50% tax rate on the lower salary they get, both of which are required to recover a basic income – start to get a bit irritated about millionaires and layabouts. Before too long one of the political parties sees an advantage in eliminating one or the other of these types of people and the income payment starts to degrade.
We have a child benefit in the UK – a universal stipend for every child – which has recently been removed from the “rich”. Those rich then start asking why it should be paid to the “poor” who seem to do nothing of use other than have children. Eventually it is degraded or removed completely.
State payments are insufficient. You have to address the social relations as well.
Bill,
Don’t you have any reservations about the way the JG will work in practice as opposed to the theory which, of course, all sounds very laudible?
This is what would have been the practice had the UK election turned out differently:
http://labourlist.org/2014/03/why-were-introducing-a-compulsory-jobs-guarantee/
The only positive thing I can say in support of these kind of schemes is that their authors have at least had the honesty to label them as “compulsory”. To listen to some MMT proponents you’d think that all JG schemes were “voluntary” on the basis that no-one is compelled at gunpoint to work in them!
We’re told that they are like just like any other job and that if an unemployed person turns down a written offer of a job then, by definition, they can’t consider themselves to be unemployed.
Ok if they are just like any other job why can’t there be effective TU representation for all JG workers? There’s a point of principle involved here. That is the right of everyone who does work and make a contribution to society to receive the rights of effective TU representation and the right to strike. This does, I know, cause some difficulty for those who wish to see the JG wage used as an anchor against inflation.
In the 70s when we did last have significant inflation there was a class conflict between the workers and the the capitalists as to who would pay for the crisis caused by the oil shocks. The right wanted the workers to pay. The left wanted the rich to pay or the capitalists to reduce their profit margin.
So my problem, politically, with the JG is that there’s still an assumption, in the concept, that workers can’t have full employment and be allowed to bargain freely on wages and conditions -otherwise there will be too much inflation.
Where does it say in the JG literature Peter that JG workers can’t join a trade union?
“To listen to some MMT proponents you’d think that all JG schemes were “voluntary” on the basis that no-one is compelled at gunpoint to work in them”
The JG provides a job. A job tailored as much as possible to you as a person. If you work for the job you get a wage. If you strike you don’t get a wage. If you don’t turn up you don’t get a wage.
If you want payment outside of those criteria then you have to go to one of the other social programmes – like the contributory unemployment scheme, or disability income, or the state pension – and fulfil their criteria.
Are you actually saying that people should get paid a living wage regardless of whether they are working or not?
“in 2014, the basic allowance was €32.66 per day, with supplements for children.”
Is that every day, or just week days?
If it is every day then it is more than the proposed €800 per month.
This is the clearest exposition on the JG I have read. I had regarded the JG as a job creation scheme.
Neil,
I think, in our previous discussion on your blog, you put it that although JG workers could join a TU that it wouldn’t do them much good.
The rationale for the JG , as I understand it, is that we can’t simply go back to what we had in the 60’s and 70’s because we’d simply be going back to the struggles we saw then between labour and capital over the share of the national income. The capitalists would put up their prices to maintain their profit levels and the workers would then use their collective muscle to force their wages back up. There was in inflationary cycle in other words. Or, someone of a more right wing disposition might start the sentence with the workers using their collective muscle to push up their wages.
So there must be a difference between the jobs we had under the old system, working for the local council, sweeping the streets, working on the railways and roads etc and which now in much shorter supply, and what is being proposed for the JG. Or, if there is no difference, why is there any need for JG jobs? Why not just recreate the old ones? There’s plenty of parks in the UK which need a few more workers to stop them looking quite so run down.
Dear petermartin2001 (at 2015/12/08 at 19:41)
You ask a number of questions and raise issues that we have covered in earlier literature. Have you read all the linked material that I have provided on this topic over the years? We produced a very long report some years ago where we canvassed all the known practical and operational issues. I provided a link to that in today’s blog.
I suggest you read that because it will answer all the questions I have seen you raise here, which is why I provided the link.
best wishes
bill
Dear Bill
As Nigel Hargreaves pointed out recently, when people become unemployed, then looking for a new job is often a full-time job. To make it possible to devote a lot of time to finding a suitable job, the jobseeker needs an income that is not obtained from work, in other words, unemployment insurance. The JG should only be available to people after they have run out of unemployment insurance. The advantage of unemployment insurance is that it enables people to find a suitable job, or at least, that it increases the probability of them doing so. If a person doesn’t have an income after he loses his job, then he may end up taking the first job that comes along and as a result become underemployed. Unemployment insurance should reduce underemployment.
Of course, unemployment insurance should not be available indefinitely. In my view, 26 weeks should be the maximum period during which someone can receive unemployment insurance.
As to universal benefits, if they are taxable, then they become less universal. If all parents receive, say, 150 dollars per month for a child under 18, and if that amount is taxable, then a person with a marginal income tax rate of 50% will receive only 75 per month for a child.
I believe that the best old age security is a universal pension for every person over a certain age. That way everybody is covered. If we make that old-age pension taxable, then millionaires will pay a considerable chunk of it back.
Question: Should there be an age limit for the JG? If people in a certain country start to receive an old-age pension at the age of 67, should only people under 67 be entitled to join the JG program? That would be my position. Also, should there be a minimum age for JG participants?
Regards. James
Neil Wilson,
So that MMT is purely descriptive, and easily identifiable as useful by anyone regardless of their political objective.
Removing something from MMT by classifying it as MMP does not have any effect at all on the real economy, as whether or not it is part of MMT does not determine whether it gets implemented. Political considerations determine what gets implemented. Unfortunately not everyone shares the objective of getting rid of unemployment. And even among those who do, many would prefer to keep the wage share low so that the economy remains resilient to shocks.
Once a JG succeeds somewhere, people will be far more willing to risk it elsewhere, but the chance of encountering unanticipated problems means few would want to risk going first.
Peter, the question which you are refusing to answer is: Where in the JG literature does it say that JG workers are not permitted to join a Trade Union.
Because if you can’t point it out then “Ok if they are just like any other job why can’t there be effective TU representation for all JG workers? ” is just a Strawman.
The effectiveness of a trade union is down to its organisation and membership. Accord wasn’t very effective at preventing the collapse of HBOS and the job losses that resulted form that. But Accord is very definitely a trade union representing its members where it can in an industry that is constantly reorganising.
“Unfortunately not everyone shares the objective of getting rid of unemployment.”
Then let them come up with their own plans.
The job guarantee is a vital part of the macro stabilisation process. Re-read the points Bill has made above about the process.
You cannot separate money from the reality of the world. This desire to talk about things entirely in numbers is simply madness. The world cannot be distilled a mathematical equation.
I’ve often said that the Job Guarantee may very well be brought in by a political party that serves the smaller business community (what in the UK would be called classically Liberal), since it ensures that demand stays up for business and keeps the business riffraff from undercutting quality operations. It also incubates business startups and ensures that work skills stay current.
It ought to be brought in by Progressive left of centre politics, but they seem to be struggling with the concept of people having to work for a living or that people might actually want to live with people like themselves in a nation.
It’s almost like the natural reciprocation and tribalism of humans can be dismissed if you just find the right equation.
Bill,
I’m enormously disappointed in you to see this:
“… I do not personally see the JG as being optional for someone who wants to draw on state income support but does not want to contribute back to society…. ”
That essentially means… ‘work or starve’ as I understand it. Which also means the JG is not ‘voluntary’ as you’ve always seemed to describe it before, to my eyes at least.
And what you’ve described is 100% ‘Workfare’ that you claim a JG isn’t. Just how long do you think it would take some neoliberal government to reduce the JG wage level down to the level of basic benefit income? Your preference positively invites them to do it. And down will go the minimum wage with it.
At any time, I’d say there’s between 1 and 2% of the working population who are going thru’ a period of difficulty in their lives where they are unable to cope with working at the same time. Yet do not get near the stringent tests for disability payments (eg for mental illhealth) in society. And let’s be clear about one thing – mental health services are universally, the world over, completely non existent unless you have no ability whatever to survive outside an institution. Under your ‘personal preference’ this cohort would be either left to starve or forced into an enormously oppressive and inappropriate institution. (And I speak from first hand experience in this area.)
For a JG to be truly voluntary and ensure a safety net exists for those who don’t fit into some rigidly defined set of categories, a basic unemployment benefit needs to be there. And that ‘minimum wage’ needs to have a basic minimum income sitting below it for those with no other survival income options.
Mike Hall,
Regarding disability benefits, Bill has already addressed this before by saying that they would continue alongside the JG. I am also sure Bill would want them to be fair.
As someone with a long standing mental health problem myself, I think that a special version of the JG (not really a JG, more of an employment scheme), for those who from time to time want to try working to see if it helps them and if it can lead to a more conventional job. This would not be coercive and would be separate from JG. If it does not work out, they could return to their disability benefits at any time.
Also, Bill has always said that JG by itself is coercive, but he has always said that running it alongside existing benefit provision is a moot point. I happen to disagree with Bill’s proposal precisely because I think most unemployed persons would flock to a JG if they have failed after a few months to find a more conventional job, and some would take a JG job straight away – but as Bill says, this is moot.
Kind Regards
Bill,
Thank you for your reply. The implication is that you don’t think I understand the JG. Of course you’ve written a lot about the JG so the question ” Have you read ALL (my emphasis) the linked material that I have provided on this topic over the years?” is difficult to answer in the affirmative but nevertheless I do claim to understand the economic rationale.
As you, yourself, said in your posting “Austerity proponents should adopt a Job Guarantee”.
‘The Job Guarantee is not a “left-wing” “socialist” construct’
Well no it isn’t. I’m with you on that point!
Furthermore you explain the rationale:
‘It is important to realise that the Job Guarantee “hires off the bottom” – that means it doesn’t compete with bids for labour from other sectors – there is no bid for unemployed labour. So the Job Guarantee does not in the hiring stage set of an inflationary spiral. Rather, by hiring at a fixed nominal wage it provides the inflation anchor.’
In Greece and Spain there are no bids for ~ 25% of the labour force. So does that indicate anything other than the Government’s fiscal policy is far too contractionary and repressive on the workforce? What worries me are the many references to how wages are “fixed” or “set” which the government can of course enforce due its position of a price setter generally in the economy.
As you yourself also say (even though I know you wouldn’t agree with it) “One could envision a government policy that deflated aggregate demand (by raising taxes and cutting spending) – the David Cameron Austerity program! – even as it phased-in the Job Guarantee to achieve full employment.”
You’ve possibly explained better than I could just why the JG needs to be regarded with a good deal of suspicion by the left generally. It’s far too potent a wage suppressing weapon to be easily put into the hands of the not-so-innocent-fraudsters who are currently in charge of most western governments. If they want to suggest it, why not just let them do it themselves? Then when they do, we can add that we aren’t happy that wages are just set by the decree of government. There has to be an element of collective bargaining. There has to be effective TU representation for all workers who make a valid contribution to the national well being to ensure those wages are higher than what some future David Cameron thinks they should be.
petermartin2001,
Would you prefer that when governments need slight fiscal contractions to control inflation, that this should generate unemployment instead?
You could equally argue that current minimum wages set by government amount to the same thing.
Remember Bill has always said that the JG pool of workers would in practice be quite small, and that its primary purpose is to overcome the Philips Curve problem. Any use of it as a fiscal stimulus would be secondary. The JG pool could be kept quite small during a recession with other fiscal stimulus initiatives taking the lead in reducing unemployment, and JG just mopping up what is left.
Kind Regards
Neil,
I’m not refusing to answer any question. I’m sure I’ve explained my concerns to you before on your blog but they are about effective TU representation of ALL workers, including any who the government choose to designate as JG workers. Yes, of course, we can say JG workers are allowed to be members of Trades Unions but if those Unions are denied representation in the JG wage determining process, as they must be if wages are “set” or “fixed” by Govt using their price setting powers, then what’s the point?
I can’t put it any simpler than that. If you still don’t follow what I’m saying please read my reply to Bill as above.
CharlesJ
Congratulations, you have missed every point I made.
One point is about the people who fall thru’ the net. Perhaps you aren’t aware that in recent years, the UK Tory gov has been using a private company to systematically throw people off disability benefit and insist they look for work when there is clearly not able to work. Quite a number of suicides have been reported, and a number of documentaries have reported the cruel inhumanity of the system.
We need an actual safety net right at the bottom because no system will ever be perfect – and there are endless numbers of assholes doing their best to exclude claimants wherever possble, in all areas of the system. Does the name Stanley Milgram mean anything to yoy? I somehow doubt it.
And I would like someone to address the blatant contradiction of calling the JG ‘voluntary’ when if the unemployed are forced to participate – or starve – it clearly won’t be.
Did you even bother to read my comment properly CharlesJ ?
PeterMartin2001
Trade unions should play a vital role in JG jobs. By making sure that employers do not abuse it, and by lobbying government on the JG wage, as I am sure they do with regard minimum wages:
If the pool of JG workers becomes large enough that local councils for example try to meet their budgets by replacing existing workers with JG workers at a lower wage, and if there is no prospect of inflation which would justify that, then TUs should lobby fiercely.
Remember that when there is a prospect of accelerating inflation (unlike now or any time in the last 30 years), then governments should take austerity measures to reduce overall spending in the economy, including their own spending if they think it appropriate. It would be down to the public sector unions to lobby if they felt that the private sector should take the brunt of the reduced incomes or higher unemployment.
Kind Regards
@ Charles J
“Remember Bill has always said that the JG pool of workers would in practice be quite small…”
No doubt Bill does think that in practice the pool of workers should be quite small. In the same way we can think the pool of unemployed workers should be small too.
But ‘should’ is not the same as ‘would’. Who would have thought the western economies would be in quite the mess they are in just a couple of decades ago. We just don’t know what the powers-that-be would do with a JG if and when it was ever operational.
Yes the JG is a good idea in the right hands, but we’d probably have to have a much different type of society from the one we now have for that to be the case.
Mike Hall,
“Quite a number of suicides have been reported, and a number of documentaries have reported the cruel inhumanity of the system.”
Yes, I was nearly one of those suicide statistics, having gone to 7 medical assessments and 2 tribunals, and as a result had two break-downs.
“We need an actual safety net right at the bottom because no system will ever be perfect ”
As for unemployment insurance I have made the same point, and Bill regards it as moot. Disability benefits are separate from unemployment insurance and are a whole problem in and of themselves – but not part of the MMT framework.
“And I would like someone to address the blatant contradiction of calling the JG ‘voluntary’ ”
Bill has never called JG voluntary, in fact one of his blogs has stated that in the title. Having said that I think as you do that it is best run alongside unemployment insurance, at least for the first 3 months.
Kind Regards
“but if those Unions are denied representation in the JG wage determining process”
How are they denied representation?
They have the same level of representation as any other national wage bargaining process in the public sector.
Do you really believe the living wage idea came about because capitalists were being generous?
It’s a total strawman to suggest that there is no union involvement in setting the social living wage that the Job Guarantee puts forward. The whole remuneration package would be defined by union action and the action of activists. Particularly as it would be at a level that would cause bad businesses to exit the economy.
And no doubt it will be counter-lobbied by the Business federations.
That entire arbitration process is what ensures the package is at the correct level.
“Disability benefits are separate from unemployment insurance and are a whole problem in and of themselves – but not part of the MMT framework.”
They are. Both state pension payments and social care payments are within the MMT design. Along with payments made to students. The Job Guarantee is designed to fill the middle in between those other three areas and has to be designed in such a way that there are no gaps. The transitions between the areas has to be seamless and on a basis that the majority agree with.
“And I would like someone to address the blatant contradiction of calling the JG ‘voluntary’ when if the unemployed are forced to participate – or starve – it clearly won’t be.”
They are not force to participate. It’s just a job. You take a job and you get paid. You don’t and you don’t get paid. The JG ensures that there are always more jobs than there are people *and* that those jobs match the abilities and skills of the people. So you can always get a job if you want one whoever you are.
After that you have to drop down onto whatever other social provision there is – and fulfil their criteria if you want income from them. What level that is depends upon what other members of society believe is a fair provision. So the disabled are covered. The elderly are usually covered and the young are covered.
What provisions there are here is a completely separate debate that has nothing to do with ‘unemployment’. Because there can be no unemployment in a Job Guarantee world.
The question detractors have to answer is why they believe “conciencious objectors” to the idea of work should receive a payment when their peers in society are required to work. If you can work – within the widest definition of that term that society will permit – then surely you should. It’s a simple matter of fairness.
Neil Wilson,
Can you outline the MMT prescription for sickness and disability benefits?
My comment above was just to stop people being confused between coercive JG for those who can work, and arrangements for those who cannot work due to sickness and disability. Mike Hall has made some good points about how governments are not very good at handling sickness and disabilities.
Kind Regards
Mike Hall,
Work, as Bill has defined it in some of his past writing, has pretty broad definitions; even including seriously dedicated surfers as workers. In my opinion that is broad enough that there is something in it for everyone. Perhaps even the struggle to live with a disability can itself be defined as a job? with additional supports as needed of course.
The JG is clearly distinguishable from workfare. A JG worker is not coerced into welfare level remuneration for work that displaces a private or public sector job which would otherwise be at or above the minimum wage level. This to me is a defining distinction. The workfare system thus pits low wage workers against welfare recipients in the competition for work, potentially opening up an argument by more ruthless profiteers for an even lower minimum wage. The JG offers workers the opportunity to somewhat define how they will contribute to society without precluding the possibility of choosing any other work they are offered within the traditional public or private sector workplace. This is a somewhat political choice and a very democratic one at that. Without the JG no such empowerment exists.
For those who prefer to do nothing at all, a person should be able to work only as much as required to support that. The world doesn’t owe any able bodied, able minded individual free meals and a roof over their head.
Timely discussion Bill, it’s not just the Greens but also New Democrats who are toying with the idea of a basic income without understanding how decoupling the ability to consume from the notion of work both dis empowers the individual and costs society the lost output potential of the unemployed.
Traditional paid work is becoming scarce because the definition of work is too narrowly constrained within the bounds of a purely materialist-capitalist-producer-consumer framework which places most productive labor in direct competition with technological advancement. I would add that as a consumer the output from this model is getting a little stale and kitschy despite often embodying a lot of ideas. We have choice, but we can only choose among items the dwindling few with the capital choose to produce!
We could certainly benefit from adding a little freedom for workers to exercise some creativity in choosing what they work on.
“the UK Tory gov has been using a private company to systematically throw people off disability benefit and insist they look for work when there is clearly not able to work.”
Which in case you missed it people voted for. They had the opportunity to stop this in May, but chose not to.
To some extent because they are stuck in a dead end job that they hate themselves. As well the success of Tory propaganda.
Imagine how much more generous they would be with a Job Guarantee in place – that allowed them to work in areas like theatre, singing or perhaps just looking after their own children. A Job Guarantee that allowed them out of their ill-matched private sector job.
The fear of the Job Guarantee amongst some people just leads to this effect – destruction of other social provisions as the resentment of normal people is exploited by the right.
Fix the unemployment and the underemployment and you’ll find that the generosity of society towards others improves.
“Can you outline the MMT prescription for sickness and disability benefits?’
The Job Guarantee paid is paid to those who work on a Job Guarantee job, unless exempted from working by reason of age or infirmity.
The wage, what constitutes work, what constitutes an age exemption or an infirmity exemption are all political choices that will come about by arbitration amongst the members of society and their representatives (including the unions).
“We could certainly benefit from adding a little freedom for workers to exercise some creativity in choosing what they work on.”
Including creating new businesses. The JG has the potential to be the greatest business incubator system ever invented.
Eh, are we missing the woods from the trees here?
€32.66 a day unemployment plus child benefit?
That’s €993 a month without child benefit.
And the BIG is €800 a month and it wipes out the welfare system?
Looks like a neoliberal scam tbh.
Neil,
“Which in case you missed it people voted for. They had the opportunity to stop this in May, but chose not to.”
All the suicides have only come to light after the election. You are right that ultimately it is about democracy, for good or for ill, as that is ultimately the best system. I would be up for the House of Lords (or whatever replaces it) to have the power and resources to scrutinise day-to-day decisions by civil servants to ensure that poor policy is identified earlier, but then sometimes ordinary people vote for nasty policies anyway.
Kind Regards
I don’t have any necessary objection to the concept of a job guarantee for people who might find work for pay necessary for them to have purpose in life, however, life presents many possible constructive purposeful activities and from a mental health standpoint helping others to understand this and assisting them in finding such purpose(s) is probably more important than merely providing some relatively (or utterly) purposeless employment.
So a Purpose Guarantee is actually a lot more important than a JG in this sense.
The most basic purpose of the productive system is not employment, but rather the consumption of what is produced. All other economic purposes including profit proceed from this most basic purpose and profit can fit seamlessly within it much more equitably and freeflowingly if we would simply guarantee the individual sufficiently abundant income to purchase production and all of its costs with a universal income guarantee, and then also implemented a discount to retail prices that not only ended any inflation, but could actually effect price deflation without harming any enterprise (Other than to the hiding in plain sight monopolistic and problematic business model of Finance, and then it wouldn’t harm it….just de-throne, de-tooth and downsize it so it would take its proper and smaller place alongside the other business models in the economy.)
Cost rules every enterprise in the micro-economy, and because of depreciation, a host of other additional costs over and above the costs of finance and time lags inevitable in the physical universe the flow of total costs always exceeds the flow of total individual incomes distributed. Thus cost and the inherently cost inflationary nature of the economic system should be a dynamic factor considered in macro-economics. The missing of this reality by economists and the failure to fully address both it and the increasingly disruptive factor of artificial intelligence’s erosive effects on aggregate demand is the primary failure of macro-economic policy. If a sufficiently abundant income supplement and discount program were implemented the rest of investment and the drive for efficiency of cost by competition, innovation and artificial intelligence would largely be able to proceed with a minimum of intrusion save a firm commitment to breaking up the oligopolistic tendencies of corporations with global reach, and that could largely be dealt with by re-industrialization of advanced economies and the consequent decentralization of the global economy….because the dependence upon employment as the primary means of finance will have been broken by the universal dividend and a retail discount policies.
“Without child increase the amount of the Basic Unemployment Allowance is on average EUR 705 per month (21,5 x 32.80).”
The allowance of €32.80 is only paid for five days a week.
http://www.kela.fi/web/en/basic-unemployment-allowance_amount-and-taxation
Peter Martin
How much TU representation, effective or otherwise, do unemployed people have? How much political representation do they have? What was it Rachel Reeves said before the UK election about Labour not being the party of those who are out of work?
A JG means nobody is ‘unemployed’ unless they want to be. Might the right abuse a JG? Of course, as they might abuse any other potentially progressive policy. I’ve not seen what your suggested alternative is.
The question of fairness and reciprocation is key; we’re dealing with very deeply rooted behaviours that go way beyond Neil’s comments about human nature. Here’s a comment I left a few days ago, just as the thread was fading:
Neil Wilson
“It’s not a belief. it is fundamental to the way humans are (and actually what separates us from Chimpanzees).”
In fact it doesn’t separate us from chimpanzees, monkeys, dogs, or even crows. The reality just reinforces your point though.
Here’s a brief article on the subject:
http://www.yerkes.emory.edu/about/news/developmental_cognitive_neuroscience/de_Waal_Evolution_of_Unfairness.html
And an actual study:
http://www.pnas.org/content/110/Supplement_2/10416.full
With a brief quote:
“Humans are not alone in responding negatively to differential treatment compared with a partner. This response is shared with other species and appears to be instrumental in successful cooperation.”
The desire for fairness – and even a core understanding of what ‘fairness’ means – appears common to all reasonably intelligent social animals.
Humans may be able to work around our innate drives, and create a society where a Basic Income type approach would be viable, but we do have to create it, we can’t just pretend that that society already exists.
Meanwhile, the JG solves problems in the context of the societies we actually live in.
Is that the house of ‘lords’ that jetted in sebastian coe (who,in his prime, could run,on a good day, a few microseconds faster round a track than someone else) to vote in favour of the tax credit cuts?
the samw houase of ‘lords’ that the authoritarian kite fliers are suggesting should be stuffed with extra ‘peers’ to prevent the reduced number of elected members in the ‘lower house’ experiencing frustration in their vivisectionist enthusiasms?
“Unfortunately not everyone shares the objective of getting rid of unemployment.”
As Michal Kalecki observes in “Political Aspects of Full Employment,” Political Quarterly (1943):
“The reasons for the opposition of the ‘industrial leaders’ to full employment achieved by government spending may be subdivided into three categories: (i) dislike of government interference in the problem of employment as such; (ii) dislike of the direction of government spending (public investment and subsidizing consumption); (iii) dislike of the social and political changes resulting from the maintenance of full employment. We shall examine each of these three categories of objections to the government expansion policy in detail.”
http://mrzine.monthlyreview.org/2010/kalecki220510.html
Paul,
Re: House of Lords, I did say “or whatever replaces it”.
charles,
I would be delighted to know what is planned to replace that chamber of horror.
Looks like a neoliberal scam tbh.
there you go, examining the gift horse’s teeth.
Can’t you just trust these hard thinking people?
@Neil “Are you actually saying that people should get paid a living wage regardless of whether they are working or not?”
Yes. We don’t all need to work anymore with the massive technology improvements.
@ Adian
Have you considered removing the JG from MMT and instead reclassifying it as MMP (Modern Monetary Practice)?
A brilliant idea. I would use MMP to explain the facts only. MMT would then include ideas like the JG.
The key is to educate people about monetary sovereignty. Bill does an excellent job at this. MMP would cover this topic without theory like the JG.
“They are not force to participate. It’s just a job. You take a job and you get paid. You don’t and you don’t get paid. The JG ensures that there are always more jobs than there are people *and* that those jobs match the abilities and skills of the people. So you can always get a job if you want one whoever you are.”
This attitude is not good Neil. Forcing people to work to live when we no longer need to do this. Its a different age we live in now. It’s like people who want to hold onto dated technology to protect their jobs. It always turns out badly for those that do this.
Understanding and selling the MMT facts is critically important. But building it on a dated belief system will make the selling job so much harder. And for what. Just so you can hang onto your everyone must work or go without dated belief system.
RJ
If we’re really in a different age, why is there such visceral objection to the ‘scroungers’ receiving the pittance of unemployment benefits?
It’s not even a belief, let alone an dated one; it’s fundamental to our nature, more-so even than Neil says. I see that Bill has approved my earlier comment above – morning, Bill – on studies into inequity aversion in social animals.
We may or may not be able to overcome our nature, but just assuming it away despite the evidence strikes me as the genuinely shoddy belief system.
I have gained further clarification of the JG (thanks Bill). I prefer JG to a basic income. However faced with the reality soon approaching in Finland does anyone know what is likely to happen when they bring into effect basic income of €800 a month for:
*Private sector (household) debt levels. ‘How’ will this these go down? Will different people use the 800 euro to leverage more debt? By corollary what will this do to small loans?
*How will landlords react (i know the overall inflation wont be as the doomsayers would have you believe) but very specific things could see a raised price floor?
*What will happen to automatic stabilisers? I can see this damaging counter cyclical stabilisers in some ways.
*Will this have immediate positive effect on job creation? (i know if i were getting 800 per month after about 3 months i’d be looking to start a business/work somewhere/spending this into local business).
*Poverty, homelessness no more? Social mobility?
@ Mike Hall
“And I would like someone to address the blatant contradiction of calling the JG ‘voluntary’ when if the unemployed are forced to participate – or starve – it clearly won’t be.”
Yes I very much agree with this point. I doubt if you’ll get any change from Neil on this point, though. He’ll continue to argue along the lines that the unemployed don’t HAVE to do it. Which is of course just avoiding the issue. To define the term “voluntary” we need also to understand what might be meant by the alternative. Would a spell in prison, where at least everyone is fed, count as compulsion? Well, no, he could argue. Everyone still has a right to choose between the JG, Prison, and Starving (or more likely a life of crime or some form sex-industry work) on the streets.
Most of the objections to the JG could be overcome if we did indeed make it truly voluntary. That is, an unemployed worker could choose to take up the JG or carry on , as now, being in receipt of social benefits due to being unemployed.
The system varies from country to country. In the UK, it is probably incorrect to refer to unemployment pay as a social benefit. There is a system of compulsory National Insurance. So what would we say to an unemployed 60 year old with 40 years of NI contributions, who’d never been unemployed previously? Would they have to “voluntarily” choose the JG to survive?
@Eddie Baker,
“A JG means nobody is ‘unemployed’ unless they want to be. Might the right abuse a JG? Of course, as they might abuse any other potentially progressive policy. I’ve not seen what your suggested alternative is.”
If we had a socialist system everyone could have a job on the same basis. We wouldn’t need to designate some jobs as JG. That’s quite possible.
If we don’t, if we have a mixed economy, we could have a genuinely voluntary JG. Then no-one would have to be unemployed either -IF they chose the JG but they wouldn’t be penalised, in any way for not doing that. We could have , in the UK unemployment pay (known there as JobSeekers Allowance) of “up to £73.10” per week. Or workers then could choose to have a JG of , say, £150 pw. Something like double the JSA. If the worker had a family they’d receive extra benefits too. They would still be counted as unemployed in the National Statistics.
@Neil,
Imagine how much more generous they would be with a Job Guarantee in place – that allowed them to work in areas like theatre, singing or perhaps just looking after their own children. A Job Guarantee that allowed them out of their ill-matched private sector job.
You do seem to have a very rosy view of what the JG will turn out to be. Maybe I’m just an old cynic but I honestly can’t imagine it turning out to be at all like this – however well intentioned the architects of the scheme might be . The jobs won’t be tailored. They’ll be off the peg!
I can’t see that even in a socialist society anyone , who just wanted one, would be given a paid job singing ( certainly not with a voice like mine!) or looking after their own children. But of course we’d have nursery places for children so that women could work and pursue their careers if they chose to.
“The reasons for the opposition of the ‘industrial leaders’ to full employment achieved by government spending may be subdivided into three categories: (i) dislike of government interference in the problem of employment as such; (ii) dislike of the direction of government spending (public investment and subsidizing consumption); (iii) dislike of the social and political changes resulting from the maintenance of full employment. We shall examine each of these three categories of objections to the government expansion policy in detail.””
a low unemployment rate is not a optional extra these days, given all the 1 and half income families that reside in the mortage belt sububs of this land that determine the election result.
let alone the threat it poses to the banking systems balance sheet.
i dont think business is on about keeping unemployment high these days, but maximising the profit share by supressing wages
The way to implement a BIG or a dividend is to include/”sell” the compensated/rebated back to retail merchants mechanism right along with it. The retail merchant at the terminal end of the productive/economic cycle Gifts the consumer a discount and the central bank rebates every cent of those discounts back to the merchants. The only thing that occurs is the market for consumer finance gets downsized. Also, that way businesses are not punished by the even higher taxes associated with re-distributive programs. Make the dividend big enough and the discount percentage to prices to the consumer large enough and you will be able to quickly accomplish more of both the liberal and conservative agendas….than either of these hapless political parties has been able to do….by being hypnotized by the idiocies and delusions of DSGE and the 5000 year old problematic business model of Finance. The direct distributive and Gifting paradigms offer us a way out of this hypnotization and enslavement, and a way home to individual self determined purpose. It’s a proactively win-win situation for the individual and businesses, and the too big to fail banking system gets downssized….poor things. 🙁
How godawfully mean of me to suggest such a thing. Maybe I should chastise myself. Well, maybe not considering how much more freedom would be accomplished by the dual mechanisms I suggested.
Peter Martin
I had the impression you were opposed to the JG in general – whether it conforms to Neil’s definition of voluntary or to yours – but perhaps I was wrong.
In the case of a JG and unemployment benefit both being available you need a convincing argument that people should be allowed to refuse a JG job and continue to receive unemployment benefit. It’s the reciprocation problem again: “Why should they get hand-outs for sitting on their arses when guaranteed jobs are available.”
I can think of one example where there was a de facto job guarantee with pay grades that was accompanied by stable prices, World War II.
The stagflation of the 1970s was the result of an even highly underemployed workforce still straining natural resources, namely oil, and creating high rates of inflation. The best way to combat inflation is not to only have one pay grade with a job guarantee, but, to make sure that when all willing-able-bodied workers are employed to their full capacity that they still will not strain natural resources.
The best way to do this is for the federal government to massively invest in not only basic, but also applied, R&D technologies in energy, new food production, clean water, etc. Technologies for manufacturing solar panels and lithium-ion batteries for electric vehicles, growing food in high-rise greenhouses, and desalinating sea water exist but are still too expensive to be profitable for private businesses. The federal government could run pilot factories manufacturing solar panels, lithium-ion batteries, high-rise-greenhouse food, and desalinated sea water as applied R&D projects. Once the information on how to run these factories profitably is obtained, private businesses could take over the large-scale production of these products using the information from the published research.
An earlier post on this blog mentioned that many higher-pay jobs were lost in the Great Recession, but, the bulk of jobs created in the recovery were low-wage. This indicates that there is now a great deal of underemployment, with people holding jobs far below their skill and pay level. A job guarantee without pay grades would address this much less than a job guarantee with pay grades.
Any job guarantee would require private employers to compete with the federal government for any workers. A job guarantee with pay grades would simply mean that employers would also have to compete somewhat more for employers with higher levels of skill and ability.
@RJ
You clearly misunderstand what theory means in the context of MMT (and in the context of any scientific theory). It doesn’t just mean “hypothesis”, it means a set of ideas that explain the facts. And MMT explains the facts whatever is done, whether or not it qualifies as modern monetary practice.
@Eddie Baker,
“you need a convincing argument that people should be allowed to refuse a JG job and continue to receive unemployment benefit”
Yes. Fair enough. I would argue that the right to refuse a JG job should be on a conscientious basis. I really don’t buy Neil’s argument that a JG could be for running an amateur dramatics group or choir or whatever. I would say it’s much more likely that JG workers will end up being hospital porters or end up delivering ‘meals on wheels’ to elderly people.
In other words, they’ll end up working alongside other workers who may not be designated JG, but will be doing exactly the same job. If there’s the slightest difference in their pay or conditions, that would give an unemployed worker the right to knock back that job offer on principle. Or, they may choose to accept it and prove that they are capable of doing a regular job to a future employer.
@Peter,
“Most of the objections to the JG could be overcome if we did indeed make it truly voluntary. That is, an unemployed worker could choose to take up the JG or carry on , as now, being in receipt of social benefits due to being unemployed.”
So they can do a ‘work for the dole’ job instead?
You’re forgetting all the coercive activity tests and programs recipients of unemployment benefits need to comply with or face losing their payments.
With a JG, as workers are forced out of the private market during downturns, they will move into the JG pool and find a range of jobs available, and a wage they can live on. Since they were working previously, it is not likely to be seen as coercive by these individuals.
MMT points out that the limitations on economies are the real resources available to them as opposed to financial limitations. But there are still real limitations. MMT shows how sovereign governments can mobilize unused resources such as unemployed labor. Professor Mitchell often points out just how bad it is for both the unemployed individuals in an economy and how bad it is for the nation as a whole to have people who are willing to work sit idle. And how wasteful and harmful it is to use unemployment as a tool to control inflation. The Jobs Guarantee addresses these issues.
Many of the comments here about the Jobs Guarantee are just ridiculous. No one says a JG program solves all the problems of society. And it shouldn’t try to. And people who think they shouldn’t have to work to receive an income from those who do work really need to grow up.
It’s an interesting discussion. But for me the MMT JC is bordering on madness. I otherwise support MMT 100% (MMP is a better name though as it gets rid of theory that the majority is not). But would never support the JC as anything more than one possibility to spend the extra money created by deficit spending. By making it an essential part of MMT it’s in the how to shot yourself in the foot and completely sabotage yourself category. And then claiming all objections have been meet by a non believer who just hasn’t read enough is never going to cut it.
Split the facts (MMP) and options (including a JC) is sell-able. Combined as one with an essential JC included is not.
@Jerry “Many of the comments here about the Jobs Guarantee are just ridiculous.”
Like what. You make this statement but don’t give examples. Please give two or three and why they are ridiculous.
“how bad it is for the nation as a whole ”
So give the JG as an option only. But also there is more than one way to skin a cat.
I almost never mention the job guarantee. Rather I explain the facts of MMP as contained in MMT. I sometimes mention the reduced need for everyone to work. Giving examples of me and how I can do 10+ times as much work now. Or farmers in NZ who use to milk 40 cows who can now milk 100s. To show that today not everyone needs to work to produce enough for all. And with the new type of robots it will likely get worse (or really better – more time for leisure). But this will need massive change in our thinking and beliefs. We can hide behind things like JGs (a sticking plaster approach that will surely fail) or confront the changes head on.
“And people who think they shouldn’t have to work to receive an income”
An example of a belief that needs to be challenged and defeated. We are not talking about a massive income. Just enough to live with dignity and buy from the massively more productive workers.
@ Peter Martin
“So what would we say to an unemployed 60 year old with 40 years of NI contributions, who’d never been unemployed previously? Would they have to “voluntarily” choose the JG to survive?”
I think we would say that they have 40 years of work experience and if they want (or need) to keep working, we can design a job for them that would enable them to pass on their skills and experience to the next generation. I think that’s an attractive offer.
“In other words, they’ll end up working alongside other workers who may not be designated JG, but will be doing exactly the same job.”
And there your TU ought to be doing its job preventing that to happen.
AI is an incredibly disruptive economic force that will not and should not be tampered with in any productive sense. That plus the fact that the logic of efficiency is inherent in profit making systems, innovation and AI means economic theory must evolve and integrate those realities into said theory. Leisure, which is not idleness but self determined and engaged interest, needs to be encouraged not inhibited. Outmoded and false Orthodoxies hide in corners if not in plain sight and we need to think through them.
Mike
The issue of mental health problems is easily dealt with; we go back to trusting doctors. If your doctor says you’re not fit for work then you’re not fit for work and you receive an incapacity benefit set at the same level as the living wage (and pensions, while we’re at it).
That benefit would last as long as the doc thinks it should. In any sufficiently large population there will be genuine scroungers, but with a JG available doctors will be under less pressure to make unjustified assessments.
I think it’s highly unlikely that JG positions would include singers and surfers from the beginning, but I don’t think Bill or Neil have suggested that. The intent is that a JG would move in that direction over time.
As people working in private sector and conventional public sector jobs see their own situations become less precarious – a JG means companies will compete for workers/productivity increases rather than workers compete for jobs – then the IA problem becomes less severe.
A JG may well evolve into something that looks like a BIG, but we can’t just magic that society into existence on day one. Electorates will need to be convinced, and right now a big chunk of them don’t even want people getting the humiliating pittance that is unemployment benefit.
I’d like to see the JG running in parallel with unemployment benefit, but I don’t have, and I haven’t seen, an argument for that situation that I think would convince enough voters.
And people who think they shouldn’t have to work to receive an income from those who do work really need to grow up.
The reality is that we have mass unemployment and a welfare state to support it. There is a growing demographic that does not work, who are receiving income from those who are working. A JG is a stopgap measure.
The lack of support for a JG or a BIG amongst the general public means these initiatives will have to be imposed. The other options are a continuation of the status quo, or a descent into survival of the fittest scenarios.
It is society that needs to grow up.
“there will be genuine scroungers”
This sort of language is unnecessary. Not everyone needs to work today. Stop living in the past and accept the realities of living in an advanced high tech society. We should be debating how to live in this new age and supporting people who can not or do not want to work not debating recommendations based on dated, judgmental beliefs.
To be honest some of the JG supporters attitudes have surprised and disappointed me.
“The lack of support for a JG or a BIG amongst the general public means these initiatives will have to be imposed”
But has anyone tried to explain clearly why this is necessary. I have and people are not as closed minded as I thought they might be. But no JG. Just facts.
And imposed. By who without the public’s support.
Philosophical visualization is not only important in understanding it is essential for clarity. All of the blame and shame associated with welfare and a BIG/Universal Dividend/JG is irrelevant…and so is perfectionism. The government/societal thought leaders need to “up their game”, break up the monopolies and oust the true parasites by clearly and thoroughly visualizing Wisdom and its pinnacle concept Grace and then crafting policies that align with it as well as strategies for enabling the populace to react to it in healthy ways. An alliance of consumers and businesses in visualizing and implementing such Wisdom is probably our best and quickest move we could make.
@alittlecon,
I certainly think that older workers generally should be encouraged to pass on their skills to the younger generation. That is if they want to. It can be an alternative to full retirement. A part time job can be an alternative to full retirement which some workers may prefer.
In a well run economy there is no reason to expect that someone who had a useful service to offer would receive a “no bid” for that offer, so I don’t see why these kind of jobs woulds have to be JG jobs.
Whether any particular job offer, JG or otherwise, is “attractive” isn’t for us to say. That would depend on the pay and conditions. Only the person being offered the job can decide on that.
I did raise a point in an earlier comment which no one seems to have picked up on.
” with the JG is that there’s still an assumption, in the concept, that workers can’t have full employment and be allowed to bargain freely on wages and conditions – otherwise there will be too much inflation.”
Is this a correct understanding on my part?
If so, how fair is it to put all the blame on workers in this regard? Is inflation really all their fault?
” We should be debating how to live in this new age and supporting people who can not or do not want to work”
So in essence we should first look to support this minority’s wishes? And after that discuss how the rest should try to get a job with or without a JG?
“In a well run economy there is no reason to expect that someone who had a useful service to offer would receive a “no bid” for that offer, so I don’t see why these kind of jobs woulds have to be JG jobs.”
They wouldn’t be under JG if the bid is acceptable for the individual. If the bid is not acceptable then it could be under JG.
the logistics are not being addressed.
If you don’t turn up for your JG and you lose all means of subsistence
what happens next?If you have anti social behavior and others do not
want to work with you is your job and your income still guaranteed.
How long to set up the beurocracy tailoring jobs for millions of people?
Making job programs universal ,denying income for those who cannot be
accommodated,paying a real living wage which can pay the rent means employers
doubling current minimum wage and an inflationary cycle of price and wage rises.
It is an unmanageable chaos which would set back progressive government.
Mike
Yes, mental health infrastructure in the UK is particularly bad, and getting worse. The easy part – I was probably understating the severity, but it’s relative – of dealing with that reality is in the fact that public opinion is already supportive. The problem lies in the political parties, in part because they all stick to, and perhaps even believe, the nonsense about running out of money.
“Do you really think 1% or so residual unemployed receiving benefits is really the problem in the electrorate voting for a JG ? That’s such a pathetic argument.”
No, I think it’s a problem in the electorate voting for a combination of JG *and* unemployment benefits. I think it’s an even bigger problem for a BIG. And we’re not just dealing with the reality, assuming 1% turned out to be right, we’re dealing with what people think. Just look at what people *think* is true for the levels of benefit fraud compared to reality.
It’s all very well saying it’s a pathetic argument, but where is the argument that will convince the electorate to vote for a combination? The electorate that already thinks benefits are too high and which imagines millions of scroungers who don’t exist. It’s them you have to convince, not me.
“… where is the argument that will convince the electorate to vote for a combination?… ”
What? You mean to say you’re not able to argue that recipients of UB of 2% or less isn’t a problem for society? When was anybody ever concerned about such a small fraction of present unemployment benefit costs? You reduce the unemployment register by 70% + and you think the ‘scroungers’ argument still wins? How then are you EVER going to win any political battle?
When social security spending figures are quoted in the media, most of it is actually the cost of state pensions, but that context is never mentioned.
If in fact the arguments were factually presented (somewhere) in the MSM, I doubt we’d have any difficulty keeping a JG strictly voluntary, IF the JG can meet its stated goals for society AND participants as well. Which, by Neil’s confident statements, should be cinch.
But which do you prefer?
To proceed, for expediency’s sake, with a pack of lies accepted as ‘facts’ in mainstream discourse.
Or to make the effort to progress on the basis of widely recognised reality, rather than mere predjudice and ignorance ?
Wow, nearly 80 posts! This topic really generates a lot of interest. This nearly guarantees, I guess, that Bill will never read this post, it being so far down the list. But here goes anyway.
The comment below is not a negative criticism of Bill’s work nor of the J.G. I support the J.G. idea. I might embroider the edges where it interacts with other systems, like the welfare system, a little differently from Bill but broadly and substantially I support the J.G. as Bill advocates.
What follows now is blog metacriticism; criticising the blog as a blog. Remember, “criticism” is not necessarily negative criticism.
It’s interesting to consider what a blog like this is. A credentialed technical expert promulgates his views for a wider non-technical audience in a format which allows replies. I think even thoughtful commentators will not have read all of the literature on the JG (for example). It is fair enough for these people to be advised to go back and read more of the literature if they get something egregiously wrong.
At the same time, consider the position of intelligent but non-expert laypersons in modern, complex society. They have to absorb, or partly absorb, multiple expert arguments on multiple topics. They need to do this to be informed citizens in a democracy. They will be non-expert in all topics or in all but one topic, usually. Genuine polymaths in an age of extensive knowledge and specialisation must perforce be rare. On most topics they must attempt to absorb some fundamentals and then apply heuristics to aid general comprehension and citizen-style decision making.
To take just two examples, how many citizens are macroeconomics experts (bearing in mind that much macro is still contested by the apparent or self-declared experts of various schools) and also climate science experts? Climate science is at least wholly based on hard science. Can any school of macroeconomics make the same claim? (Maybe it can and I would be interested to see the arguments.)
Engaging with the public in complex matters always invites both ignorance and “a little knowledge (as) a dangerous thing” to the party. Yet the public does need to be so engaged in complex debates in a democracy. It is a dilemma. In allowing open comment and polite criticism of ideas (not persons), Bill opens up a field where he might be committed to making either more comprehensive replies more often than he would like or have time for… or else to perforce ignore many commenters much of the time.
The only constructive way out that I can see is for Bill to note the most common misconceptions of his ideas and to address those comments as a group, key idea by key idea, blog post by blog post. Maybe Bill already does this part of the time. Common misconceptions will have a lot to do with the readers’ implicit ideological biases and general prejudices (usually appearing to be “common sense” to the readers in question).
Aside from common misconceptions, there will be more serious, substantial and systematic intellectual objections. These will require more substantial answers and might even provoke a rethink of theory and/or exposition at certain points.
As well as priming the public to accept the JG idea as reasonable, practicable and economically and socially sound, the idea needs needs to get into mainstream media and political party discourse. Now there’s a challenge. But this post is already too long.
If we create an advanced robot. So only 5% max of the population need to work. What then. Do we still have a JG. Or just pay people to buy goods produced by the robots. Based on a new reality that not everyone needs to work.
“Climate science is at least wholly based on hard science”
What? Obviously you have not studied this subject. the number of questions I asked that could not be answered … But this is an JG thread. And it’s not the detail. I believe the JG is flawed at a high level. Based on dated beliefs that no longer apply. That everyone either must work to be paid or wants to work. It’s no longer necessary so its time to move on. Accept this and address how to handle and sell this new reality. It could be a win, win, win, win. We pay people to not work using Govt deficits to finance. And they buy goods from people in work, keeping them employed. This debt then creates net savings for an aging population. All at no cost to anyone.
RJ, You will notice I said “Climate science is at least wholly BASED on hard science.”
Perhaps I should have been clearer and said, “Climate science is based on fully consistent and extensive hard science, e.g. physics and chemistry, where the validity of observed known laws is established to a very high degree of confidence. It then seeks to extend our scientific knowledge by the standard procedures of the scientific method. It is an ongoing research project but already its conformity to real system behavior and thus its predictive capacity is becoming impressive.”
Please now mention “the hiatus” and I will know for certain you are a crank.
Mike
“When was anybody ever concerned about such a small fraction of present unemployment benefit costs?”
Listen to some UKIP* supporters and then get back to me.
“You reduce the unemployment register by 70% + and you think the ‘scroungers’ argument still wins?”
It becomes even more vociferous. In that situation the kippers and their ilk will argue that *everyone* on the register is now a scrounger, since they *could* have a guaranteed job but they’re refusing to take it.
These aren’t my arguments, and they’re not arguments that I support, but wishing them away doesn’t help anyone.
* Or Tories, or Rachel Reeves in the Labour party.
“If we create an advanced robot.”
Your narrow view on what is considered a job feeds your belief. A lot of work is done which is not about producing goods. A lot of work is waiting to be done which isn’t about producing goods. A lot of people (a majority) want to work. How are you going to change that will among people, which is based on more that just getting the pay check?
Eddie
So you are rolling over and accepting that Britains furthest right minority party – UKIP – dictates the limits of policy on this?
Are there any other views of UKIP’s you think we should just accept even tho’ a majority might not even agree with it? Maybe we should all join UKIP then if they have a monopoly on what a UK electorate will or won’t vote for?
Ok, got it Eddie. I’m going to spin all this as ‘progressive’ but in fact I’m going to adopt a policy position of far right UKIP. Thanks.
[Bill edits: Edited out personal invective – Mike, please refrain from nasty personal attacks. You will note I have deleted a few of your comments in the last few days. I don’t want to do that but if you get personal or insulting they go straight to the bin, no matter what other point you are trying to make.]
And imposed. By who without the public’s support.
If we’re referring to a JG or BIG, it will be imposed by technocrats. The BIG is supported by a portion of free market right wing ideologues, thus it has a greater chance of being enacted. Neither measure is understood by the general public.
The unemployed and underemployed are a marginalized group. It appears unlikely that they will organize themselves politically to demand change.
The worst scenario is a slide towards social darwinism, pushed by demagogues and public ignorance.
@simsalablunder
They wouldn’t be under JG if the bid is acceptable for the individual. If the bid is not acceptable then it could be under JG.
As I understand the working of the JG, any JG offer would have to be less attractive. So if the first bid was unacceptable the second one would have to be even more unacceptable.
petermartin2001 said:
“In a well run economy there is no reason to expect that someone who had a useful service to offer would receive a “no bid” for that offer, so I don’t see why these kind of jobs woulds have to be JG jobs.”
If someone has a useful service to offer (in a well run economy) it will presumably get an offer (bid) as you say. If that bid is equal or above the JG the individual can always choose that offer instead of the JG.
If the bid is below the JG the individual can of course still choose the lower bid (for what ever reason) or choose the JG.
The JG sets the floor level and that floor level does not mean (its given bid) is always “less attractive” than any other bid available to the individual. It can be more attractive to the individual depending on what other bids are offered at the time.
So if we assume someone has a useful service to offer (in a well run economy) he/she will presumably get an offer above JG. If not then the JG offer still stands.
The corporate private sector owns the rights to many things but it does not own labor or the right to define the idea of what constitutes a job. The capitalist social contract is that if labor and capital cooperate, the most efficient ways for everyone to have the most will always be found. That is why labor chose to work for and support capital in the first place. That and trickery such as land enclosure and other brute force methods of coerced reform that is.
If capitalism cannot find ways to gainfully employ everyone, then it has not met it’s obligations under this social contract.
As capitalism fails to meet it’s obligations, concepts of fairness and morality dictate that the gainful employment vacuums left in the wake of capitalist “progress” be filled by other means.
The job guarantee is only one example, but it is a particularly good one, because, it offers things that alternatives with a similar capacity to provide a measured response to unemployment and underemployment like job sharing, or the basic minimum income, and that is the potential to maximize individual human creativity and respond to real needs capitalism is either unable or does not wish to serve.
Most importantly, it provides the means for unemployed and underemployed people to use their own labor to reshape the world in which they live.
Peter,
“with the JG is that there’s still an assumption, in the concept, that workers can’t have full employment and be allowed to bargain freely on wages and conditions – otherwise there will be too much inflation.”
Is this a correct understanding on my part?
If so, how fair is it to put all the blame on workers in this regard? Is inflation really all their fault?”
The difference between giving someone £15,000 per year (weekly/monthly), and giving them a £10/hr job 30 hours a week is when they get a £10.50/hr job (or the £9 one with excellent prospects) in the normal job sector, there is an automatic reduction in state spending.
Which means that you don’t have to put taxes up as much to recover, you don’t disrupt the private sector pay structure, and the ‘dead zone’ between the guaranteed income and the income required for a ‘normal job’ is less.
The JG only injects money at the lower end and sets a floor, whereas BIG goes to everyone. Needs need (heh) to be dealt with before wants.
Remember there is one welfare payment which is accepted by the general public.
The old age pension .As chartalists we know that this is not payed for by taxation.
This is a gift of monetary tokens from the monetary sovereign government to people
for doing nothing.Many child welfare benefits around the world are universal and
generally political accepted.
It is universality which makes welfare politically acceptable.The other enormous
drawback from current welfare systems is that any earnings of current welfare
recipients effectivelay gets taxed at a very high rate as welfare is lost as earnings
rise.Here in the UK this is a particular problem in some urban areas wher housing costs
are so high .A genuine living wage which pays the rent and allows for a holiday and
generally decent living conditions would mean doubling the current minimum wage
at least the introduction of such a wage whether through a JG or other means in
rapid times will most likely lead to an inflationary price and wage spiral as well as
wide spread firm bankruptcy especially amongst smaller firms without benefits of scale.
Universal welfare and progressive taxation is the pragmatic way of mitigating
the inevitable effects of asymmetric power relationships on the distribution of money
tokens and real resources.It is also future proof the AI’s share will need to be distributed.
“In other words, they’ll end up working alongside other workers who may not be designated JG, but will be doing exactly the same job”
That’s specifically excluded in the design of the JG. It’s one of the challenging design elements of the Job Guarantee – non competition with existing private *and* public sector jobs.
It is likely the case that private and public sector positions (individually or via their trade unions) should be able to apply to a tribunal to have Job Guarantee people reallocated if they specifically compete with their market or job role.
” He’ll continue to argue along the lines that the unemployed don’t HAVE to do it. Which is of course just avoiding the issue. ”
Is it really. Or is it a different point of view. Here are some more ‘compulsory’ elements of British society.
* You are forced to take kidney dialysis on the NHS – despite having the private sector option, or (as a recent court case has shown) the right to refuse treatment and die.
* You are forced to be educated at a public school – despite having the private sector option, or the option to home school your child.
* You are forced to see a social worker or family support worker – despite the fact that you can refuse them entry and they have to go through lengthy court proceedings to override that.
You must see compulsion all over the place in British society!
The Job Guarantee is simply an alternative offer of a job for which a wage is paid on a ‘national bargaining’ basis. Very simple. Very ordinary. Very voluntary – exactly like the three social provisions above.
It goes on top and alongside the other provisions in society.
If you have a problem with the other provisions in society, then put forward the changes to them. Have Job Seekers Allowance scrapped and return to the old Income Support system without the job seeking requirements. Have Unemployment Benefit paid as a matter of right based upon the contribution record.
Put that forward to conference and see how far you get. Get the improved existing provision into the 2020 Labour manifesto. Should be straightforward if there is as much support for it as you believe.
It didn’t happen in 13 years of Labour rule but, hey, perhaps they just overlooked it.