Why Bernie Sanders Should Add a Job Guarantee to His Policy Agenda--Wonderful Read...Seriously!
Why Bernie Sanders Should Add a Job Guarantee to His Policy Agenda
Posted on August 18, 2015 by Yves Smith
By Pavlina R. Tcherneva, Assistant Professor of Economics at Bard College, Research Scholar at The Levy Economics Institute, and Senior Research Associate at the Center for Full Employment and Price Stability. Originally published at New Economic Perspectives
Discussions of the ‘politically possible’ always remind me of a favorite quote: “Argue for your limitations, and sure enough they’re yours.”
Bernie Sanders’ issues page reads like a list of everything we’ve been told is not politically possible. And yet he’s getting record breaking support, precisely because people are tired of being told that something cannot be done–that it is impossible to get money out of politics, or that tackling inequality and racial injustice is unrealistic, or that securing a living wage is a political nonstarter.
Bernie has unapologetically rejected sclerotic visions of what is ‘politically possible’. And now he should add the Job Guarantee (JG) to his list of issues. Indeed, he already has the key ingredients—a bold proposal to eliminate unemployment by creating 13 million decent-paying jobs, a living wage, and a federally-funded youth job guarantee, which Sandy Darity correctly called a stepping stone (a pilot program) to a blanket job guarantee for all.
The Job Guarantee’s time has come.
It tackles at least three key sources of “economic violence and injustice”—unemployment, precarious work, and poverty wages
It is good for families, the economy, the environment, and our communities
Here’s what you need to know about the JG.
A common misconception of the JG is that it is a large and unpredictable program, echoed by Matt Bruenig in a recent post:
“The size of the workforce on the JG will greatly differ across the business cycle … Because the JG workforce should theoretically turn over a lot and shrink a lot, work valuable over the long run is ruled out.”
The concern is that the JG (aka the ELR) will be a very large and volatile, difficult to administer, not only because it has to handle many millions of unemployed people at any given time, but also because it needs to go through very large swings (trying to create millions of new jobs in recessions for the jobless, but being unable to complete its projects as these millions of people go back to private sector in expansions). This is largely incorrect.
JG stabilizes employment
Yes, the JG will fluctuate—it will grow in recessions and shrink in expansions. But a permanent JG will be relatively small and will oscillate comparatively little, because it stabilizes economic conditions, private spending, profit expectations and, importantly, employment. The amplitudes of the economic volatility we observe today will be much smaller, precisely because the JG tackles all the vile consequences of mass unemployment (on private sector spending and expectations, and on people and communities). The JG is also good for the private sector and ensures more stable and plentiful private sector employment, because it guarantees that domestic demand never collapses as much as it does today with mass unemployment.
JG is a preventative program, not just a cure
Unemployment is like a virus, it spreads through the economy if nothing is done to check it. And the best ‘cure’ for someone who wants a job—is a job, not a handout. But the JG is not just a cure. It’s also prevention.
Every unemployed person today puts another one out of work, but the Job Guarantee reverses the process: employing one person creates work for another.
Today, 20 million people want decent work at decent pay. If we launched a JG now it would surely balloon quickly, which is why Sanders’ proposal for creating 13 million jobs is the only program that guarantees a rapid return to true full employment. But a permanent JG would not need to employ tens of millions of people (+/-), because mass unemployment becomes a thing of the past.
The JG will always be there to provide voluntary employment for a pool of people (small relative to today’s unemployment numbers)—who have difficulty finding private sector jobs or have been rendered ‘unnecessary’ by private firms. It’s one thing to support a family on an unemployment insurance check, and a whole different thing to replace lost private sector income with a living wage income from the JG in a job that does something useful (more below). In this sense, the livelihood of those participants is not disrupted as much as with unemployment, and does not cause the large ripple effect of layoffs through the economy we see today due to collapsing demand.
In other words, it is easier to prevent the development of mass unemployment, than to eliminate it once it has developed.
JG breaks the vicious cycle at the bottom of the income distribution
As I have written before, people from different social stations experience different employment situations—the highly-skilled and highly-educated face virtually no unemployment, or relatively short stretches of joblessness. They are hired first and fired last. But even when they are unemployed, their safety net is much stronger because of more generous employment benefits, severance packages, savings and other sources of wealth.
MUCH MORE and a GREAT READ at........
http://www.nakedcapitalism.com/2015/08/why-bernie-sanders-should-add-a-job-guarantee-to-his-policy-agenda.html