A postscript on job guarantees
avatar

JobPeople2_crop380wI want to respond to this post by Professor Pavlina Tcherneva of Bard College on job guarantees. She seems at pains to distinguish such a guarantee from “big government.” I have no such need. We still live in a society described long ago by the great John Kenneth Galbraith as one of “private affluence and public squalor.” I’m afraid both have been magnified in the years since.

In the Tcherneva version of the government as an employer of last resort (‘ELR’), public employment would respond rapidly and precisely to ebbs and flows of the business cycle, but no more than necessary. I prefer to imagine sizable new public enterprises with the capacity to shrink and expand, but always continuing to function and produce.

One of the issues raised by Tcherneva as well as by Matt Bruenig is the flexibility of public works projects as counter-cyclical tools. I don’t think this is a problem. One wouldn’t want to turn jobs on and off, but it would seem possible to speed them up and slow them down. Remember, in my ELR system, there is a goodly core of permanent employees and on-going projects. There could also be smaller-scale projects noted by Tcherneva that can be completed as labor availability dictated. One wouldn’t halt such work prior to completion, but I  don’t see why an ELR enterprise couldn’t finish jobs in time to release labor back into the private sector.

I do have to take exception to the premise that an ELR completes the social safety net. Unfortunately, some of those pushed into destitution in the current age have difficulty functioning in the labor market. We will still need some kind of income guarantee to backstop public employment.

 


Comments

A postscript on job guarantees — 3 Comments

  1. Pingback: Links for 09-07-15 | Economics Blogs

  2. “I prefer to imagine sizable new public enterprises with the capacity to shrink and expand, but always continuing to function and produce.”

    If governments simply responded to the costs of borrowing (which fall when monetary authorities are targeting NGDPL) by investing in activities with future benefits whose NPV discounted at borrowing costs it is doubtful that it would need to create new public enterprises.

  3. Pingback: Links for the Week of September 7, 205

Leave a Reply

Your email address will not be published.