Would the Job Guarantee be coercive?

I was a speaker at the Sydney Greens Forum yesterday and today I am on a panel with Bob Brown at the Greens National Conference in Adelaide. Regular readers will know that in the past months we have been engaging with the Greens after I wrote – Neo-liberals invade the Greens. The initial reaction towards me was hostility but that soon gave way to a more reasoned engagement which I have found to be extremely beneficial. That is why I accepted invitations to speak at their functions. While there is a long way to go in fully articulating a modern monetary paradigm within the context of the generally sophisticated social and environment policy that The Greens have already developed I think the possibilities are now there. One issue that does emerge in my discussions is that of whether a person should have to work under a Job Guarantee approach to full employment. That is, should the Job Guarantee be compulsory?

You might like to re-read or read my blog – Income or employment guarantees? – where I outline my distaste for guaranteed income schemes sometimes called Basic Income (BI) schemes to get further context on the issues I raise here.

The Greens appear to be supporters of guaranteed incomes for all irrespective of your circumstances. This has been a popular progressive position but one that is losing support among leading international agencies (such as the ILO) in favour of employment guarantees as the preferred approach to income insecurity. The work I am doing with various international agencies at present (or recently) is all about employment guarantees.

There is a growing recognition that work plays a much more significant role in society and in the lives of individuals than merely providing an income. Until we change social values as they pertain to the concept of productive endeavour and broaden what is considered to be meaningful work, we have to design solution that recognise these values.

Further, I reiterate what I consider to be the essential conditions for a successful and sustainable, a full employment policy.

  • It must generate enough hours of work to meet the preferences of the labour force;
  • It must have in-built inflation control mechanisms;
  • It must be able to provide paid work to the most disadvantaged; and
  • It must not violate social attitudes towards work and non-work.

My previous posts have explained – see the several past Job Guarantee blogs – why I prefer the Job Guarantee in terms of its ability to satisfy these essential conditions for a successful full employment policy within the constraints of a monetary capitalist system.

The case made for the Job Guarantee leaves two outstanding and important issues to be discussed:

  • Is a compulsory Job Guarantee overly-coercive; and
  • Does the BI model introduce dynamics that can take us beyond the oppressive reliance on work for income security?

These issues relate directly to the concerns of The Greens so I think they are important to consider.

One BI advocate Philippe Van Parijs considers that the introduction of a universal income guarantee can provide a “capitalist road to communism”, which relates to the need to move beyond the oppression of the capitalist workplace.

However, in my view the Job Guarantee provides a stronger evolutionary dynamic in terms of establishing broader historical transitions away from the unemployment (and income insecurity) that is intrinsic to the capitalist mode of production. I see the Job Guarantee as a short-run palliative and a longer-term force for historical change.

Coercion

First, let me state unequivocally that you do not have to scrap the unemployment benefit system to have a Job Guarantee system. You can have whatever transfer system you desire running parallel with the Job Guarantee. However, my sense of values tells me that I would not pay unemployment benefits if I was guaranteeing employment. I consider people have an obligation to give back to a community that is guaranteeing them a job. I would pay the Job Guarantee wage from day one and allow the person a fortnight or so to adjust before requiring them to start work. But this is my personal preference and while I am one of the key conceptual developers of modern monetary theory and the Job Guarantee others who I count as close colleagues consider you could provide some sort of parallel unemployment benefit system. I should also note that you don’t even have to adhere to modern monetary theory to see the logic and hence support a Job Guarantee. But that is another story for another day.

So the discussion about coercion has to be tempered by that initial point. What follows is my preferred approach without unemployment benefits. So my position would be the most extreme that you would find, although I consider it to be the epitome of moderation!

Is a compulsory Job Guarantee overly-coercive? One of the essential criteria outlined above for a sustainable full employment policy is that it not violate the social attitudes towards work and non-work.

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.

I would expect that in creating circumstances in which an individual’s opportunity to engage in paid employment and earn a living wage is guaranteed, the Job Guarantee would support current social attitudes towards work and non-work; and as a policy mechanism would dampen any resentment felt towards that proportion of unemployed persons who are currently perceived as undeserving of state support and assistance.

The Job Guarantee approach (my preferred version of it) forecloses the free-rider option that is available under an unconditional BI. In a society which accords value to the notion of reciprocity, the guaranteed work model ensures that no social group is considered to be solely viewed as “consumption units” – to be fed and clothed by the State but ignored in terms of their social needs for work and human interaction within the work place.

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. But it is entirely possible 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 BI would take the latter option every time. A blanket Job Guarantee is coercive in its impact on this particular group.

The BI advocate would likely recommend a simple modification that would ‘merely’ make the Job Guarantee voluntary within the context of a universal BI. I suspect this would be The Greens position.

To understand this criticism of the Job Guarantee I note that the underlying unit of analysis in the BI literature is an individual who appears to resemble McGregor’s (1960) theory X person. Theory X people are found in neo-classical microeconomics textbooks and are self-centred, rational maximisers. In this conception, Lester Thurow says that “man is basically a grasshopper with a limited, short-time horizon who, liking leisure must be forced to work and save enticed by rewards much greater than those he gets from leisure.” He was of-course attacking the neo-liberal conception of the X person.

Reinforcing this conception of human behaviour is a libertarian concept of freedom. Optimal outcomes require an individual to have free choice and BI proponents see a decoupling of income from work as an essential step towards increasing choice and freedom.

So by permitting individualism at this level – for the state to support individuals in their consumption but not require any reciprocation limits the possibilities for social change and community engagement. The Greens should be at the forefront of collective engagement rather than advocating policies that smack of individualism.

Of-course, provision of a BI doesn’t preclude community action. Individuals may adopt a whole range of campaigns and activist agendas while being supported on the barest BI. But if they are engaged in these agendas then why wouldn’t they want to be paid for their work? In this way, the Job Guarantee would replace the neo-liberal agenda to reduce the size of the public sector contained within the so-called “volunteerism”. I will write about my attitudes to un-paid volunteers another day. It came up at yesterday’s forum in Sydney. Short response: I hate the concept!

Further, from a Marxist perspective, BI offers the hope of taking subsistence away from any necessity to produce surplus value. At least for a given individual that takes the BI! Accordingly, proposals like the Job Guarantee are met with derision because they represent the antithesis of individual freedom. Even if the vast majority of individuals desire to be employed, a flexible system would also permit those who did not want to work to enjoy life on the income guarantee.

By denying citizens the opportunity to choose between the Job Guarantee and the non-work alternative of the BI, it is alleged that the Job Guarantee (my preferred version of it) becomes an unnecessarily coercive and harsh system.

However, most BI proponents also consider that the national government faces a fiscal constraint – which makes their macroeconomic conception indistinguishable from that touted by the neo-liberals. By taking the orthodox government budget constraint version of the BI at face value, BI proponents are confronted with a major dilemma. To finance the scheme some people have to work. It is difficult to believe that all those who are working are choosing to work in preference to not working. However, under capitalist property relations, workers in general have to work to survive

Leading BI proponent Van Parijs is representative when he asks:

… what is ‘unfair’ about living off the labour of others when everyone is given the same possibility? Facing this possibility, some will choose to do no or little paid work. Others will want to work a lot, whether for the additional money or for the fun of working, and thereby finance the universal grant. If the latter envy the former’s idleness, why don’t they follow suit?

There are a number of problems with this conception of a free and fair system. First, our lives do not all begin at the time of the inception of the BI. Individuals who, under different circumstances, may have taken the no-work option have entered into commitments, like having children. In that sense, prior constraints prevent them from ‘enjoying’ the freedom.

Second, the ‘financing’ logic fails due to the inherent fallacy of composition. The BI system becomes undefined (that is, there would be no production or income) if everyone chose to take the non-work option. So we are left with the uncomfortable conclusion that under the BI the ‘coercion of work’ is neatly transferred to those who do not take the BI, while under the Job Guarantee the ‘coercion of work’ is shared by all.

I realise these comments are within the flawed context of a government budget constraint. But there are no BI advocates operating in a modern money environment so we have to consider their arguments as they state them.

More generally, no form of wage labour is non-coercive under capitalism. The question is what forms of coercion are most likely to lead to changes in the mode of production over time. The importance of the work ethic in reinforcing capitalist social relations cannot be underestimated. The problem is that work is still at the heart of capitalist culture and in Sharon Beder’s words:

seen as an essential characteristic of being human. No matter how tedious it is, any work is generally considered to be better than no work.

The BI proponents argue that the introduction of a universal income guarantee “moves us closer (ceteris paribus) to communism, as defined by distribution according to needs” (Van Parijs, 1993). In other words, the BI approach contains a dynamic that can steer society away from capitalism towards a communist state. Marxist supporters of the BI see this as a major advantage, a palliative under capitalism but also the seed to its end.

What is the validity of this claim?

In Australia there are several trends that are placing our traditional notions of work and income under stress:

  • There has been a decline in the growth of full-time jobs and a major share of new jobs are part-time and precarious.
  • Unemployment has persisted at high levels for nearly 30 years.
  • There is growing underemployment among part-time workers.
  • The number of marginal workers in general are rising as is the number of former workers supported by disability pensions.
  • There has been a polarisation emerging between those with too much work and the underemployed with too little.
  • Reflecting these labour market trends is the increasing income inequality in Australia with the bottom 50 per cent of the population having a smaller income share than the top 10 per cent of income earners.

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. Clearly, social policy can play a part in engendering this debate and help establish transition dynamics. However, it is likely that a non-capitalist system of work and income generation is needed before the yoke of the work ethic and the stigmatisation of non-work is fully expunged.

The question is how to make this transition in light of the constraints that capital places on the working class and the State. BI advocates think that their approach provides exactly this dynamic. Clearly, there is a need to embrace a broader concept of work in the first phase of decoupling work and income. However, to impose this new culture of non-work on to society as it currently exists is unlikely to be a constructive approach. The patent resentment of the unemployed will only be transferred to the “surfers on Malibu” (using Van Parijs’ conception of life on the BI)!

The Job Guarantee in fact provides a vehicle to establish a new employment paradigm where community development jobs become valued. Over time and within this new Job Guarantee employment paradigm, public debate and education can help broaden the concept of valuable work until activities which we might construe today as being “leisure” would become considered to be “gainful” employment.

So I would allow struggling musicians, artists, surfers, Thespians, etc to be working within the Job Guarantee. In return for the income security, the surfer might be required to conduct water safety awareness for school children; and musicians might be required to rehearse some days a week in school and thus impart knowledge about band dynamics and increase the appreciation of music etc.

Further, relating to my earlier remarks – community activism could become a Job Guarantee job. For example, organising and managing a community garden to provide food for the poor could be a paid job. We would see more of that activity if it was rewarded in this way. Start to get the picture – we can re-define the concept of productive work well beyond the realms of “gainful work” which specifically related to activities that generated private profits for firms. My conception of productivity is social, shared, public … and only limited by one’s imagination.

In this way, the Job Guarantee becomes an evolutionary force – providing income security to those who want it but also the platform for wider definitions of what we mean by work!

Further, at present, the private sector in some capitalist economies (notably, the English-speaking ones) has reduced unemployment but this has come at the expense of creating increasing time-related underemployment (with implied inadequacy of employment situations). It is highly likely that the introduction of the Job Guarantee will place pressure on private employers, particularly in the low-skill service sectors to restructure their workplaces to overcome the discontent that their underemployed workers feel. A full-time Job Guarantee position at wages not significantly different from the low pay in the private sector service industries would appear attractive relative to a private job that rations the worker hours.

In this regard, the Job Guarantee would offer flexibility to workers. Some would prefer part-time jobs while others would require full-time jobs within the Job Guarantee. It should be obvious this flexibility can accommodate virtually any requirement of workers. Further, it is very easy to design the program in such a way that child care services will be provided by Job Guarantee workers, to accommodate parental needs.

Anyway, social attitudes take time to evolve and are best reinforced by changes in the educational system. The social fabric must be rebuilt over time. The change in the mode of production through evolutionary means will not happen overnight, and concepts of community wealth and civic responsibility that have been eroded over time, by the divide and conquer individualism of the neo-liberal era, have to be restored.

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    6 Responses to Would the Job Guarantee be coercive?

    1. BruceMcF says:

      Two subsidiary points …

      First, note that there is need not be a conflict between an US-style “Unemployment Insurance” program paid into by those in private employment and a Job Guarantee program. Unlike a dole, income paid by “unemployment insurance” has an expiration date … however, rather than extending it into a pseudo-dole in the event of recession, the Job Guarantee automatically covers for the contingency that there are insufficient private sector jobs available. Of course, those on Job Guarantee jobs would not be paying into health insurance, since they are not under risk of losing those jobs for economic reasons … and indeed, the entitlement to unemployment insurance benefits (in the US, the standard insurance period is three months) would be one of the things privileging private sector employment.

      Second, note that there is an alternative argument regarding a social income payment for payments that must be collected so that activities such as dumping CO2 into the atmosphere (without any proof that it is safe to push CO2 atmospheric levels to levels unprecedented during our species tenure on earth and at a rate that is, to the best of our knowledge, unprecedented) … which is that the price that must be paid is whatever is required to achieve the required change in behavior. However, if that price is sufficiently high, managing the destruction of purchasing power could be destabilizing, and therefore, the argument runs, it is preferable for such Pigovian receipts to simply be redistributed.

      In this “social dividend” system, there is no effort to tailor the Social Dividend to provide for a living income – rather, it is a matter of neutralizing the fiscal policy impacts of required Pigovian taxes and fees. And so under the social dividend system, a Job Guarantee system would provide the primary guarantee for those able to work of being able to earn a living wage irrespective of the macroeconomic policy stance that the government of the day may choose to adopt.

    2. Alan Dunn says:

      Dear Bill,

      I find this article appalling.

      You have become what you have tried for most of your carrer to oppose.

      Regards

      Alan

    3. bill says:

      Dear Alan

      You might like to explain this a bit. I have no idea what you mean.

      best wishes
      bill

    4. Tim says:

      Bill,

      I was just wondering about the dynamics of the JG providing services like childcare. If the service was provided, would workers on the JG be paid less than the average wage of childcare worker in the private sector? If so, would this mean that the JG child care service be more competitive than the private sector\’s child care service.

      More people would demand to put their child in the JG centre, lowering demand for childcare from the private sector.

      a) that this would bid up the price for a position in the JG centre and/or have too many children in the centre or b) run the private sector out of business (as childcare services are provided at low cost). Workers in the private sector would then become employed in the JG system providing the same service.

      If (a) is correct who would benefit from the profit? As the average cost per child is now less than the average return.

      I guess the question is, if my analysis is correct, should the JG be restricted to certain industries/occupations because paying a skilled worker the minimum wage in the JG system doing the same job would make the JG much more competitive in providing certain services?

    5. bill says:

      Dear Tim

      I would not have child-care included as a Job Guarantee activity because it requires considerable skills and continuity of labour force to be successful. We have dealt with the demarcation between JG and non-JG public employment in our Creating effective local labour markets: a new framework for regional employment policy Report is you are interested.

      So yes, the JG should be restricted to certain activities. I urge you to read the report if you want to find detailed analysis of this issue.

      Thanks for your insights.

      best wishes
      bill

    6. Daniel says:

      Hi Bill,

      I admire your engagement with the Greens and hope that your involvement influenced at least a few minds in the audience. With regard to the ALP, I agree with your comments to the effect of the party falling to neoliberalism.

      As someone who shares the same country and same state (NSW if you have come back!?) I wonder to what extent you have engaged with the NSW left faction and left aligned unions? And if you have, what kind of reaction did you receive? Do you see any hope in the left faction of the ALP?

      I ask with the following in mind. The factions have very different economic frameworks and I don’t seem to be able to find a blog of yours addressing the political aspects of implementing a JG in the existing political environment. From what I can deduce, the Greens were not receptive to a JG. I suppose you would not go further to the left in Australia without considering the reduced probability of success. To the right (of the Greens), The ALP (controlled by the right faction) has adopted neoliberalism. But what about the left faction?

      Regards,
      Daniel
      P.S. I realise this is an slightly older blog post!

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