Jobs for all–the impossible dream?
avatar

WPA+StrikeMy friend Matt Bruenig does consistently great stuff, but I have to object to his recent critique of the idea of a Job Guarantee (often called the government as an Employer of Last Resort, or ‘ELR’). I want to walk through his arguments, point by point.

This explainer by the illustrious Randy Wray provides background on the entire idea, including the macroeconomics of ELR, while Matt and I mostly stick to the mechanics.

He starts well, noting it isn’t the 1930s and you can’t put people to work by just handing them a shovel. Jobs require capital, quite true. I’d go further, jobs require capitalized organizations with plans. Call them public enterprises. Decide what sort of work ought to be done and set up assorted enterprises to tackle different jobs. They would provide public services and construct and maintain public facilities. They would supplement the efforts of state and local governments that in many cases fail to do what ought to be done, sometimes for lack of capability. They would utilize workers with a wide variety of skills. And they would be organized to handle more fluid ebbs and flows of employees.

Matt fears the supply of labor for such purposes as too variable to staff permanent organizations in continual operation. It seems to me that jobs could be provided in six month stretches, with the opportunity to re-up. Some employees would be permanent, and paid commensurately.

Work could focus on a sequence of one-off projects. With higher private employment and fewer ELR applicants, projects could proceed more slowly, or be postponed. Just because a project isn’t essential doesn’t mean it would not be worthwhile. Some applicants will have more skills than others, and some work will require more or less in the way of skill. There is already a lot of ‘churning’ in the labor market (people moving between jobs greatly outnumber those in and out of work). Business firms cope with it.

Permanent ELR-staffed operations would reduce unemployment and oblige the private sector to be more flexible. They could be focused on the most benighted localities that lack the resources to provide ample services and facilities. For instance, if the state of Texas won’t build sewers for people in the Rio Grande Valley, the Feds could set up there, train and employ local labor, and situate such communities to exercise more political power in the future. This bears some resemblance to the original War on Poverty, before the community action angle got smothered in 1967, when state and local politicians gained substantial control of the program.

What kind of work is worth Federal support? Day care centers and public schools could use teachers’ aides (properly vetted). Small-scale infrastructure work. Reclaiming unused urban land. Green retrofits of public facilities, and maybe privately owned structures and homes. There’s nothing to prevent a public enterprise from owning any kind of equipment it needs.

Training someone who subsequently leaves the ELR service doesn’t strike me as a problem. We train people now who never work for public institutions. There is a public value to job training. Nor is it a problem if people leave the service because they find something better. That’s the whole point: to force employers to compete for labor with institutions with better standards of employment. If nobody needed the last resort of public employment, that would be fine.

In general I think Matt’s notion of how an ELR system could work is too narrow. He ends by suggesting a modification in line with my discussion above, one that I don’t think goes against the grain of an ELR system.


Comments

Jobs for all–the impossible dream? — 13 Comments

  1. Lord, oh Lord! We don’t need any more wage work than we have. We need LESS. We need less greenhouse gas emissions. We need less bossing. We just need to make sure everybody gets what they need.

  2. “Day care centers and public schools could use teachers’ aides.”

    Who would be the teacher’s aide during booms when the ELR pool dries up?

    Name something worth doing and chances are it needs to be done on an ongoing basis.

    I would support a jobs program as a step in the right direction. Ditto Sandwhichman’s proposal for a shorter work week (or earlier retirement, or longer vacations and parental leave, etc.).

    But if I were forced to pick just one policy tool to encourage full employment, it would be functional finance budgeting by way of linking the tax rate(s) to the unemployment rate. Why? Once established, the program would be automatic, run by formulas or at worst by some committee. No capital expenditures required, no large bureaucracy required, no make work required, and minimal response time to changes in the unemployment rate.

    • Functional finance breaks down in situations where inflation is not a result of spending policy. Depending upon a linkage between unemployment and tax rates can (and eventually will) result in simultaneous inflation and depression as it did in the 1970s.

  3. Pingback: Links for 08-12-15 | Economics Blogs

  4. “He starts well, noting it isn’t the 1930s and you can’t put people to work by just handing them a shovel. Jobs require capital, quite true.”

    Does not seem necessarily true. We already have plenty of people in jobs without capital. Why not a few more?

  5. Why would we expect these newly created public enterprises to be able to execute activities that are worthwhile doing, (those with discounted present values greater than the borrowing rate) better than the public enterprises called “governments.” And why would the political constraints that prevent governments from carrying out these activities be any less constraining on these new entities?

    • The public enterprises would be government-owned and government-run. The only difference is that these entities would exist for the express purpose of identifying and creating useful projects on an ongoing basis so as to generate jobs and maintain full employment. Their mission is employment; the way they fulfill that mission is flexible. That’s different from a typical agency who mission is the provision of some specific service, with the jobs that might be created in the process being a secondary, instrumental concern.

      Obviously putting a program like this into place would require selling the country on the idea that it is a good idea to use the public sector to maintain full employment at all times, rather than allowing the jobless rolls to surge up and down in response to the private sector business cycle.

      For a large segment of the general public, I think it would be a relatively easy sell. Most working people seem to like the idea that people should work for their incomes, and not just get free checks from the government. They can also be convinced that their own wages and job security will be greatly enhanced by working in a full employment society where employers have to compete more aggressively for qualified workers, and can’t just dip into the pool of the desperate unemployed for cheap labor.

  6. I don’t see an ELR as conflicting with reduction of work time. Some people have too many hours, others have none at all. They need income. My motivation is that it’s easier for the Gov to give people income by employing them than by just mailing them checks. There is more stigma to idleness than to work, even jobs derided as ‘make-work.’ Nobody was yelling that about workfare.

    Full employment does not have to mean ecological doom, since hours could be reduced at the same time.

    It’s true that some thought has to go to what work will be done, and how organize it, per Matt Bruenig’s post. I don’t have a plan in my back pocket, but it looks easier than sending someone through interstellar space.

  7. Actually, I think sending someone through interstellar space would be easier. Two areas of experience convince me of this.

    I’ve worked with non-profits that relied on volunteer labor and I’ve done a reasonable amount of volunteering myself. A very large proportion of volunteer time is not used. Organizations claim they need volunteers, and frequently their fundraising is affected by their claims of volunteer numbers, but when you show up, they don’t know what the hell to do with you. Warbling away about how people can be put to work doing valuable projects conflicts with my experience.

    Second, I’ve done a lot of work with disaster recovery. Now there indeed are projects that need doing. But getting them up and going is a lot tougher administratively than most people realize. Think Katrina or Sandy. (And those were in populated areas with lots of expertise. Try working in poorer, more rural areas.) If you think the response to those disasters was too slow and/or poorly done, what do you think would be different about other government-run projects? I’m a socialist, so I believe in publicly owned and run projects. I just think communities’ ability to create and design short-term projects and carry them to completion is overestimated in the JG arguments I’ve seen.

  8. “Matt fears the supply of labor for such purposes as too variable to staff permanent organizations in continual operation.”

    Uber and other “on demand” service providers seem to be doing OK…

Leave a Reply

Your email address will not be published.