Job guarantee

The Job Guarantee proposal is often associated with certain post-Keynesian economists,[2] particularly at the Centre of Full Employment and Equity (University of Newcastle, Australia), at the Levy Economics Institute (Bard College), and at University of Missouri – Kansas City including the affiliated Center for Full Employment and Price Stability.[3]

Job Guarantee draws from a social justice tradition of right to work, such as the United Nations Universal Declaration of Human Rights and the US Employment Act of 1946, and an early form was proposed by Hyman Minsky.[4][5]

The Job Guarantee proposal was conceived independently by Bill Mitchell (1998),[6] and Warren Mosler (1997–98).[7] It has since been developed further by authors, including L. Randall Wray (1998),[8] and a comprehensive treatment of it appears in Mitchell and Muysken (2008).[9]

The JG is based on a buffer stock principle whereby the public sector offers a fixed wage job to anyone willing and able to work thereby establishing and maintaining a buffer stock of employed workers. This buffer stock expands when private sector activity declines, and declines when private sector activity expands, much like today's unemployed buffer stocks.

The JG thus fulfills an absorption function to minimize the real costs associated with the flux of the private sector. When private sector employment declines, public sector employment will automatically react and increase its payrolls. So in a recession, the increase in public employment will increase net government spending, and stimulate aggregate demand and the economy. Conversely, in a boom, the decline of public sector employment and spending caused by workers leaving their JG jobs for higher paid private sector employment will lessen stimulation, so the JG functions as an automatic stabilizer controlling inflation. The nation always remains fully employed, with a changing mix between private and public sector employment. Since the JG wage is open to everyone, it will functionally become the national minimum wage.

Under the JG, people of working age who are not in full-time education and have less than 35 hours per week of paid employment would be entitled to the balance of 35 hours paid employment, undertaking work of public benefit at the minimum wage, though specifics may change depending on the model. The aim is to replace unemployment and underemployment with paid employment (up to the hours desired by workers), so that those who are at any point in time surplus to the requirements of the private sector (and mainstream public sector) can earn a wage rather than be underemployed or suffer poverty and social exclusion.

A range of income support arrangements, including a generic work-tested benefit payment, could also be available to unemployed people, depending on their circumstances, as an initial subsistence income while arrangements are made to employ them.

The fixed JG wage provides an in-built inflation control mechanism. Mitchell (1998) called the ratio of JG employment to total employment the buffer employment ratio (BER). The BER conditions the overall rate of wage demands. When the BER is high, real wage demands will be correspondingly lower. If inflation exceeds the government's announced target, tighter fiscal and monetary policy would be triggered to increase the BER, which entails workers transferring from the inflating sector to the fixed price JG sector. Ultimately this attenuates the inflation spiral. So instead of a buffer stock of unemployed being used to discipline the distributional struggle, the JG policy achieves this via compositional shifts in employment. Replacing the current non-accelerating inflation rate of unemployment (NAIRU), the BER that results in stable inflation is called the non-accelerating inflation buffer employment ratio (NAIBER) (Mitchell 1998). It is a full employment steady state JG level, which is dependent on a range of factors including the path of the economy. There is an issue about the validity of an unchanging nominal anchor in an inflationary environment. The JG wage would be adjusted in line with productivity growth to avoid changing real relativities. Its viability as a nominal anchor relies on the fiscal authorities reining in any private wage-price pressures.

Several modern countries have implemented direct job creation schemes to combat persistent unemployment.

The first was in France, with the French government doing so in Paris from February to June 1848, through the National Workshops.

The Soviet Union guaranteed a job for nearly everyone from about 1928 (as part of the Great Break) through to its end in 1991. A job guarantee was included in its 1936 constitution, and was given further prominence in the 1977 revision.[14] Later communist states followed this lead.

In the United States from 1935 to 1943, the Works Progress Administration aimed to ensure all families in the country had one paid job,[15] though there was never a job guarantee. Full employment was achieved by 1942 due to World War II, which led to the ending of the organisation the following year.

The original drafters of the Employment Act of 1946 intended for it to mandate full employment, however Congress ultimately gave it a broader pro-employment nature. The Humphrey-Hawkins Full Employment Act of 1978 authorized the government to create a "reservoir of public employment" in case private enterprise does not provide sufficient jobs. These jobs are required to be in the lower ranges of skill and pay so as to not draw the workforce away from the private sector. However, the act did not establish such a reservoir (it only authorized it), and no such program has been implemented in the United States, even though the unemployment rate has generally been above the rate (3%) targeted by the act.[16]

In the People's Republic of China from 1949 to 1997, the "iron rice bowl" practiced guaranteed employment for its citizens.

From 1945, the Australian government was committed to full employment through the position established by the White Paper on Full Employment in Australia, however this never included a formal job guarantee. The Reserve Bank Act 1959 charges the Reserve Bank of Australia with ensuring full employment, amongst other duties.[17]

The Australian government has since had a "mutual obligation" regime for most unemployed people wishing to receive welfare payments nationwide from 1997 (and in remote indigenous communities from 1977).[18] Part of this is a near-universal offer of at least 16 hours of low-paid work each week, for periods of time. For much of this regime, the work options were for employment with not-for-profit charity organisations, a government body or their own young children. These options have included Work for the Dole (from 1997), Community Development Employment Projects (1977-2015), Community Development Program[19] (from 2015) and the Green Army Program[20] (2014–18). More recently there have been options to do low-paid work for commercial businesses as well (Drought Force[21] from 2003 and Youth Jobs PaTH[22] from 2017). There is also often an option to instead undertake approved education, or to volunteer. The Victorian state government has offered the similar Drought Employment Program[23] since 2016.

The United Kingdom's New Deal was similar to Australia's program, though more focused on young people. It was in place from 1998 to 2010.

The Argentine government introduced the Jefes de Hogar (Heads of Households) program[24] in 2001 to combat the social malaise that followed the financial crisis in that year.

Similarly, the government of India in 2005 introduced a five-year plan called the National Rural Employment Guarantee Act (NREGA) to bridge the vast rural–urban income disparities that have emerged as India's information technology sector has boomed. The program successfully empowered women and raised rural wages, but also attracted the ire of landowners who have to pay farm labourers more due to a higher prevailing wage.[25] NREGA projects tend to be highly labour-intensive and low skill, like dam and road construction, and soil conservation, with modest but positive long-term benefits and mediocre management.

The South African government introduced the Expanded Public Works Program[26] (EPWP) in 2012 to overcome the extremely high unemployment and accompanying poverty in that country. EPWP projects employ workers with government, contractors, or other non-governmental organisations under the Ministerial Conditions of Employment for the EPWP or learnership employment conditions.

In the third season of the American political drama House of Cards, a job guarantee program, called "America Works," is a key policy proposal of protagonist Frank Underwood (portrayed by Kevin Spacey) after he becomes President of the United States. Details of the program are sparse, but it is portrayed as involving both public sector employment (in the form of public works programs) and private sector employment (with subsidies for employers who take on new workers), and is intended to be financed with cuts to Social Security and Medicare. America Works is not fully implemented, but a pilot program centered in Washington, D.C. is portrayed as having employed tens of thousands of people before funds are rescinded.

The Labour Party under Ed Miliband went into the 2015 UK general election with a promise to implement a limited job guarantee (specifically, part-time jobs with guaranteed training included for long-term unemployed youth) if elected;[31] however, they lost the election.

Bernie Sanders supports a federal jobs guarantee for the United States and Alexandria Ocasio-Cortez included a jobs-guarantee program as one of her campaign pledges when she ran for, and won, her seat in the U.S. House of Representatives in 2018.[32][33]

• 100% Government / Sarkari Job Gauranteed For India
• Expanded Public Works Program of South Africa
• Job Guarantee: Introduction to and history of the concept