Skip to comments.Can the Government Guarantee Everyone a Job?
Posted on 12/31/2011 7:43:37 AM PST by SeekAndFind
Unemployment has become a lot like the weather. Everyone talks about it but no one really does anything about it.
One group of heterodox economists would like to change that. The Modern Monetary Theory school of economists would like to see the government act as an employment backstop. When people cannot find employment elsewhere, they would be able to turn to the government for a job.
The federal government, in other words, would act on employment much like the Federal Reserve does for bank liquidity. It would be the employer of last resort.
The MMT crowd tends to call this the "Jobs Guarantee." It's a good slogan. And after years of persistent unemployment, I bet a lot of Americans might think it is not too bad of an idea.
Regular readers will have noticed that I've been writing a lot about MMT recently. I was introduced to MMT by Cullen Roche at the blog Pragmatic Capitalism after someone mentioned that my writings on the debt ceiling sounded a lot like MMT.
I had been explaining that the federal government could never run out of money, even if it refused to borrow because it had hit the debt ceiling. A government that pays for things with currency it creates can always just create more currency, regardless of what the bond markets say. What I hadn't realized until I was directed to the MMT crowd was that an entire school of economics had been built around this core insight.
But the MMTers do not limit themselves to explaining that the government is not revenue constrained. Many of them also subscribe to the idea that the government should guarantee everyone a job. In fact, one of the key proponents of MMT recently argued that the Jobs Guarantee is a "central aspect" of the school.
If this were true, it would mean that MMT is wrong. Fortunately, I don't think it is true. It's entirely possible to do MMT without the jobs guarantee. In fact, it's necessary because the Jobs Guarantee is unworkable.
There are at least three reasons the Jobs Guarantee cannot work.
1. It's massively inflationary. Australian economist and MMT proponent Bill Mitchell insists that no inflationary pressure arises from having the government buy labor that no one else wants. But he's just wrong.
While employing the unemployed may not create upward pressure on wages, it dramatically increases demand. The national income is increased by the amount the government pays those laboring in JG jobs.
That income is entirely from newly created money, so the money supply is expanding.
That additional demand is not matched by additional supply, however.
The people working in JG jobs are not producing goods that the market needs. Their work product is largely waste. Which means that demand increases without the supply of desired goods increasing. The result: inflation.
2. It's a bureaucratic nightmare. There are currently over 13.5 million people unemployed in the United States. Creating worthwhile jobs for every single one of them is impossible. Even if we had 13.5 million shovel ready jobs today, we would very quickly run out of them next year or the year after that.
Here's how Cullen Roche describes the program:
There are 13.5MM people unemployed today. The Federal govt employs 2MM people currently. WalMart employs 1.8MM people today and is the largest pvt sector employer. Youre not simply talking about a public works program. Youre talking about swallowing Wal-Mart by more than FIVE FOLD. A JG would involve the largest govt program ever instituted in the history of the world.
The JG is a creature of happier times and smaller economies. Bill Mitchell explains that he thought up the idea while he was a student at the University of Melbourne. The total employed population of Australia is only about 11.5 milllion. Australia currently has an unemployment rate of around 5.3 percent, which translates into 635,800 jobless people. In other words, a jobs guarantee in Australia might be workable. But it doesn't scale to fit the United States.
3. It's economically stagnating. Economic booms are often characterized by malinvestment--people dedicating capital to projects that turn out not to be economically sustainable. This is true not just of financial capitalit is true of human capital as well. People learn trades and develop career networks that turn out to be worth far less than they expected.
Unemployment encourages those who went into trades that turn out to lack adequate demand to give up those trades and seek another. This is economically productive because it brings stagnate resourcespeople who can do things no one will pay forout of stagnation.
The Jobs Guarantee would eliminate this process. The government would buy the labor of people who hold skills not demanded by the market, preventing those people from seeking out new skills. Stagnant human capital would just continue to stagnate.
In short, the Jobs Guarantee is a nice sounding project that might work out well on paper. But it doesn't work in the real world.
Sure. They can guarantee it. They just can’t honor the guaranty.
Nobody can guarantee you a job.
Sure it can.
For a while.
Till the economy collapses.
Obama’s ultimate goal for America.
A government that is licensed to give anything, can also take away anything.
Breaking rocks in the hot sun is always available.. but I do that anyway so I guess the government is again useless.
Would anyone WANT a job whose very existence was a matter of government diktat? Well, any person whose opinion matters....
It worked pretty well over there.
Tens of millions starve, tens of millions sent to salve labor camps, no private property, limited food and consumer goods and finally total collapse.
Why not try it in the good ol' USA, after all, our liberals are smarter than their liberals.
We can change human nature and make it work.
RE: Would anyone WANT a job whose very existence was a matter of government diktat?
People who are desperate to work and can’t find work.
Just go to most big city government agencies where you have to deal with government and you’ll know what I mean.
What “job” can anyone guarantee for everyone?
I’m sure if you ask the fools that believe in such a thing, they all picture themselves as management, or CEO, or movie star, or NBA player.
Many of thee people scoff at a job washing dishes or cleaning septic systems and picking fruit.
And if a job is guaranteed, then why do a good job at it once you get it?
Lol. This assumes that everyone who is on unemployment wants to work.
There are millions who would be satisfied as long as the da guvamint guaranteed their EBT card was refilled every month and that they got those nice new section eight condos springing up all over the nation.
A few years ago during the Welfare Reform push, the suggestion was made that all able bodied recipients needed to perform some sort of public service (picking up trash, cutting weeds, etc) for their continued benefit. The howls from the left about “returning to slavery” and “forced labor” were deafening. The success of liberalism is defined by how many people they are “helping”, instead of by how many people no longer need help.
Can the Government Guarantee Everyone a Job?
Does cleaning toilets in a FEMA camp in exchange for a meal count as a job?
It depends what you call ‘a job’.
The success of liberalism is defined by how many people they are helping
“The people working in JG jobs are not producing goods that the market needs. Their work product is largely waste. Which means that demand increases without the supply of desired goods increasing. The result: inflation. “
That pretty much sums it up: government jobs take resources out of the producing sector. You can get by with some non-production if your economy is good and strong. There is some limit to the amount of non-producing jobs that you can load up and pay for from the producing sector.
(And, not that all government jobs are bad or parasitic - some of them are necessary. But there’s a limit, and we have greatly exceeded it already.)
Worked so well in the USSR. Put old widows to sweeping the streets.
Idiocy! No need to read any further.
They are still required to do community service under TANF. Welfare transition program...
Where do you think they're going to get it from to give it to you?
A government guarantee will ensure that almost everyone works for government. Government provides much larger compensation for the typical worker. The really talented can make much more in the private sector although highly talented government workers can combine government plus private sector work to earn large amounts. The typical government worker has much better working conditions, job security, retirement compensation, and strong assurances that compensation will not decline at least nominally. Why would anyone except the highly talented want to work in the private sector? Government workers now have a nice deal on student loan debt (foregiven after 10 years with no tax consequences).
The idea that everyone works for government is the end of property rights. The Soviet Union and its allies tried this approach. It worked to perfection destroying ambition of the masses. It also eventually led to the destruction of the economy.
Sure. In ancient Egypt, everyone had a job. They pay sucked.
NO that is Marxist Communism not just sounds like it,
it is it. Amen.
what an absolutely communist idiot...
Oh, right. And that's worked out great hasn't it?
This definition is fast becoming forgotten. The new definition of a job is a paycheck provided by politicians and funded by taxpayers which is received as an entitlement and for which no useful work is done in return.
In other words, the politicians are calling welfare checks paychecks. These welfare paychecks are given based on the whims or political intentions of the politicians. They are involuntarily funded by the taxpayers who receive absolutely nothing of value in return.
Works for the government is fast becoming an oxymoron. Almost everyone employed by the government does little or no useful or productive work.
Just like Liberalism.
No, but they're doing pretty good at guaranteeing that you can't get a job.
In the US, you don't have a right to have a job. You have, or should have, the right to start your own business.
The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;
To borrow Money on the credit of the United States;
To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;
To establish an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States;
To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;
To provide for the Punishment of counterfeiting the Securities and current Coin of the United States;
To establish Post Offices and post Roads;
To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;
To constitute Tribunals inferior to the supreme Court;
To define and punish Piracies and Felonies committed on the high Seas, and Offences against the Law of Nations;
To declare War, grant Letters of Marque and Reprisal, and make Rules concerning Captures on Land and Water;
To raise and support Armies, but no Appropriation of Money to that Use shall be for a longer Term than two Years;
To provide and maintain a Navy;
To make Rules for the Government and Regulation of the land and naval Forces;
To provide for calling forth the Militia to execute the Laws of the Union, suppress Insurrections and repel Invasions;
To provide for organizing, arming, and disciplining, the Militia, and for governing such Part of them as may be employed in the Service of the United States, reserving to the States respectively, the Appointment of the Officers, and the Authority of training the Militia according to the discipline prescribed by Congress;
To exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square) as may, by Cession of particular States, and the Acceptance of Congress, become the Seat of the Government of the United States, and to exercise like Authority over all Places purchased by the Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings;--And To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.
You mean the same dumb ass government that has spent us into near extinction?
Sheeeyit. That's true of government workers in general.
Whenever there's a threat of snowfall in Washington, D.C., the call goes out for non-essential personnel to stay home. And that ends up being some 90% of the federal workforce. If it can be called a workforce.
At one of our dinners, Milton recalled traveling to an Asian country in the 1960s and visiting a worksite where a new canal was being built. He was shocked to see that, instead of modern tractors and earth movers, the workers had shovels. He asked why there were so few machines. The government bureaucrat explained: You dont understand. This is a jobs program. To which Milton replied: Oh, I thought you were trying to build a canal. If its jobs you want, then you should give these workers spoons, not shovels.
I worked in remote parts of China in the mid-70s. They bragged about their zero unemployment to me and how superior communism was to capitalism. Workers were employed moving human fertilizer from communal honeypots to the fields in buckets; barges were towed up the Yangtze River by men hauling on tow ropes (think Erie Canal in 1830, but replace the mules with men); six year old children unloaded barges by carrying bricks in bamboo backpacks; when a concrete pedestal (about 20 foot diameter) was cast one foot too high, they had men chipping it down manually with crude hammers and rebar chisels; huge imported front-end loaders were relegated to hauling cabbages rather than excavating.
Yes, those JG jobs were wonderful. But nobody would want one of them in the states.
No way. But it can put everyone out of a job.
Yes, it can—but only if our society becomes fundamentally Marxist. And we’re well on our way. But most people who claim to WANT a government guaranteed job, really want to do nothing and collect a government guaranteed income. Which is what Marxism eventually devolves into. You pretend to work and we pretend to pay you.
People need work income to support their families. Without jobs in a democracy, anarchy grows. When capitalism does not supply the jobs for whatever reason, the voting public turns to government. Government acts to maintain society. Everyone has to benefit from capitalism for all to be successful. It’s conserving a nation. Sending jobs, factories and Treasuries to other countries and stashing profits there does not a great country make. Maximizing greed does matter if it ruins a country.
You pretend to work and we pretend to pay you.
= = = = = = = = = = = = = = = = = = = = = = = = = = = = = =
Well, that would certainly ‘solve’ the problem of those that NOW pretend to word and we DO pay them.
Just have the government ‘employee’ everyone and our ‘elected’ officials will be our ‘bosses’ as well, and everyone will work for the good of the whole, and not as an individual.
Then, we can use the Military to police the citizens, since everyone is now an ‘employee’ of the government.
We could then rename our country to NEW RUSSIA, or something.
At least when the commies take over, the borders will be protected properly. Every cloud has a silver lining.
I thought that by the concept of imminent domain that the government had made it law that they can take away anything. Although not without 'due process' (note: actual results vary from individual to individual).
OH.... like our elected leaders are gonna go take the time to consult something like the Constitution. It’s hard to read behind that glass, and the line is usually long.
Employment is a privilege not a rite of passage!
Which means turning the taxpaying producers into prey who must support the parasites with higher taxes.
Without being aware of it, Carney has, in this statement, summed up the final stage of a nation's departure from liberty into tyranny and oppression, according to Jefferson!
See Thomas Jefferson, below:
"To preserve [the] independence [of the people,] we must not let our rulers load us with perpetual debt. We must make our election between economy and liberty, or profusion and servitude. If we run into such debts as that we must be taxed in our meat and in our drink, in our necessaries and our comforts, in our labors and our amusements, for our callings and our creeds, as the people of England are, our people, like them, must come to labor sixteen hours in the twenty-four, give the earnings of fifteen of these to the government for their debts and daily expenses, and the sixteenth being insufficient to afford us bread, we must live, as they now do, on oatmeal and potatoes, have no time to think, no means of calling the mismanagers to account, but be glad to obtain subsistence by hiring ourselves to rivet their chains on the necks of our fellow-sufferers." --Thomas Jefferson to Samuel Kercheval, 1816. ME 15:39
"[With the decline of society] begins, indeed, the bellum omnium in omnia [war of all against all], which some philosophers observing to be so general in this world, have mistaken it for the natural, instead of the abusive state of man. And the fore horse of this frightful team is public debt. Taxation follows that, and in its train wretchedness and oppression." --Thomas Jefferson to Samuel Kercheval, 1816. ME 15:40
Note Jefferson's observation that, when spending, debt, and taxation reach a certain point, citizens, in order to obtain "subsistence" (feed and clothe their families) will be glad to become paid employees of their slavemaster, the government, thereby "rivet(ing)" the chains of government to the necks of their fellow citizens.
Is that not precisely what Carney describes in the quoted portion of his article?
We must remember that wages for the government "jobs" this Administration wants to add must be obtained by incurring debt for future generations or "taking" from current private sector earners.