A Universal Job Guarantee Proposal

“A Job Guarantee gives local councils, nonprofits and registered charities an unconditional pool of funding to create jobs, and to define the boundaries of work as they see fit.”

At any given moment there are an extraordinary number of people looking to participate and contribute to our society in ways that the private job market ignores or excludes. In this article, Senior Campaigner for Economic Fairness at GetUp Edward Miller explores the merits of a Universal Job Guarantee for confronting the perils of the neoliberal employment landscape.

At any given moment there are an extraordinary number of people looking to participate and contribute to our society in ways that the private job market ignores or excludes. Currently 700,000 people are actively looking for a job and unable to find one in a market that has only 200,000 vacancies [1]. A further one million Australians want to work more paid hours than they’re being offered [2]. And beyond that millions of Australians engage in daily work that isn’t rewarded by the market or counted in measures of output – care for families and homes, care for our land, and volunteer work to support those who have fallen through the cracks.

These are all groups of people who want to work. They want to contribute to their communities, and participate in something bigger than themselves.

Of course, some may be shackled to the labour market by a lack of alternative pathways to financial independence in a capitalist society. Others are doubtless victims of a social welfare system that stigmatises the acceptance of support so severely that people would rather the indignity of poor wages and conditions, than the perceived indignity of accepting income support. It’s even possible that we’re so deeply entrenched in neoliberal attitudes that we’ve come to see our own value through the lens of what we produce, rather than our humanity.

These are all groups of people who want to work. They want to contribute to their communities, and participate in something bigger than themselves.

But there’s also a simpler explanation, and it is the one often given by unwaged people when you ask them. At its best, work offers something far more than money or financial security. It provides social connection, a sense of purpose and contribution, an opportunity to develop new skills or discover hidden interests. Countless studies tell us that being in secure, structured work, at a living wage, creates measurable improvements in people’s physical and psychological wellbeing [3]. In other words, access to properly remunerated, meaningful work is a tremendously important pillar of individual wellbeing and social inclusion.

Countless studies tell us that being in secure, structured work, at a living wage, creates measurable improvements in people’s physical and psychological wellbeing.

A Job Guarantee is not a new idea. An individual right to work was the first proposal in FDR’s second bill of rights [4], and it was one of the primary demands in the Freedom Budget compiled by civil rights leaders like Martin Luther King and Bayard Rustin [5]. Since that time, decades of research have gone into the theoretical underpinnings and program design by economists such as Mitchell [6], Mosler [7], Wray [8], Tcherneva [9], and Kelton [10]. And we’ve seen a number of limited Job Guarantee-style policies implemented everywhere from India [11], Argentina [12], Australia [13], and the United States [14]. Today, the idea is resurgent amongst leftist movements, with Bernie Sanders bringing legislation before the US Senate [15], and GetUp in Australia making it a core part of their Future to Fight For agenda [16].

It is not possible to summarise here the entire body of literature, activism and experience that have brought this proposal back into mainstream consideration. Rather, this is an introduction to a transformative policy proposal to address the challenges of the modern employment landscape.

What is a Job Guarantee?

A Job Guarantee is a federally funded, locally operated program that provides anyone willing to work with the opportunity to do so in their own community. It seeks to match the untapped potential of people who are looking for work with the unmet needs of the communities in which they live. It’s a framework that would end the threat of involuntary unemployment, strengthen workers’ bargaining position, give local communities the power to redefine “work”, and provide targeted financial relief to the individuals and communities suffering the greatest social deprivation.

As with any policy proposal that sits outside the current political imagination, the devil is in the detail. In the same way that progressive advocates of a UBI would not support a version of the policy that provided individual payments in lieu of universal healthcare and education, there are iterations of a Job Guarantee that its core proponents would not support. It’s therefore necessary to begin by outlining the emerging consensus on the essential features of a progressive Job Guarantee [17].

1. Permanent & Federally Funded: A Job Guarantee should be a permanent feature of the social safety net in a society. It is not limited by a specific budget, in the same way that income support is not limited by a specific budget. Rather the amount spent in any given year will reflect the economic cycle – more people will accept work in private enterprise during periods of boom, and more people will rely on the public option during economic contractions. Various models demonstrate that the cost of a Job Guarantee would be between 1-3% of GDP [18]. The net cost in our current economy would be roughly $22 billion per year [19].

2. Locally Administered: The program is primarily administered by local governments, registered non-profits, social enterprises and cooperatives. It takes the contract to the worker, creating jobs where the unemployed live. As a result it is highly targeted, creating the greatest number of jobs and offering the greatest stimulus to communities with the greatest number of unemployed people. Being locally administered also means a broader definition of work can be adopted than we currently have. Care, cultural, environmental and charitable work can be fully remunerated, with local communities empowered to decide their own needs.

3. Award conditions and wages: The wages and benefits offered under a Job Guarantee reflect the minimum acceptable standards set forth in legislation. A Job Guarantee is not exploitative workfare. Job Guarantee workers are paid the full minimum wage, and have access to benefits such as sick leave and holiday leave calculated pro-rata based on the time worked. A Job Guarantee provides a floor on which all workers can expect to stand – removing the threat of unemployment during bargaining, and strengthening casual or contract workers’ negotiating position.

A Job Guarantee provides a floor on which all workers can expect to stand – removing the threat of unemployment during bargaining, and strengthening casual or contract workers’ negotiating position.

4. Voluntary, not workfare: A Job Guarantee does not require people to work in order to receive existing benefits (such as Newstart, DSP, Youth Allowance, etc.) It doesn’t displace these options either – providing people with a choice between the existing social safety net and enrolling in the Job Guarantee. If someone chooses to accept NewStart while continuing to seek a private sector job, they always retain the option to later enrol in the Job Guarantee program. Similarly, someone who joins the Job Guarantee program is free to opt out onto existing income support payments without penalty.

5. Flexible and accessible: It meets people where they are in terms of ability, providing suitable, useful work opportunities, designed to be appropriate for the education, skill level and experience of the applicant. It offers part-time and flexible work arrangements for students or the underemployed. It is sensitive to the particular needs of groups such as at-risk youth, people who have recently left prison, or people with disabilities.

6. It invests in people and communities: On-the-job training and apprenticeship opportunities are included under a Job Guarantee program to help people develop the skills and confidence to transition from public to private sector work should they want to. By allowing communities to democratically participate in deciding what work is socially useful, the offer of employment is separated from the profitability of employment. Projects are created to serve community needs, rather than prioritising “profitability” or “productivity” in a narrow sense

7. It invests in sustainability: The program should provide options for addressing environmental concerns. An early example of a guaranteed employment program, the Citizens Conservation Corps, planted 3.5 billion trees in a ten-year period [20]. A Job Guarantee program may provide a framework by which we can harness people seeking work to make a contribution and coordinate them to address the greatest moral, social and economic challenge of our era.

There are far more substantive explorations of the ways a Job Guarantee would work in practice, along with the kinds of work local councils need performed [21]. These features, however, are what distinguish a Job Guarantee from other job programs. Many job programs meet some of the above criteria (and may be worthwhile initiatives in their own right) without amounting to a Job Guarantee as envisaged by progressive economists, academics and activists.

An important thing to remember when thinking through the challenges and options that are present in the design of a Job Guarantee is that there are logistical challenges in delivering any right guaranteed by the state. Our healthcare and education systems are phenomenally complicated, expensive and imperfect – understandably so in a country as large, and regionally distributed, as Australia. But because we believe in a pre-logistical right to healthcare and education, we expect governments of all stripes to deploy the resources to figure it out, and improve over time. Shifting the debate from whether or not a right to work should exist to the quality, content and delivery of that right would itself be a powerful step.

Shifting the debate from whether or not a right to work should exist to the quality, content and delivery of that right would itself be a powerful step.

What are the benefits of a Job Guarantee?

Many of the benefits of a Job Guarantee may be inferred from the list of its essential features above. But it’s worth elaborating the unique benefits of a Job Guarantee to individuals, communities and the broader economy.

Secure employment for the unwaged, and underemployed

A Job Guarantee gives people seeking employment the very thing that they’re asking for: a job. It doesn’t provide them with a cheque in the mail, to address their immediate needs but then leave them to make their own way. It gives them access to, and a stake in, the means of production, by creating a legally enforceable right to work. It puts the onus on government to figure out how to include them in the labour market and provide on-the-job-training where necessary to give people the skills and competencies they need to make a difference in their communities. By targeting the unemployed, and offering them real wages and conditions rather than subsistence level income support we drastically reduce the social and economic stress placed upon many families especially during a period of economic transition and technological advance. It provides people with far more than an income, but with the significant improvements to health and wellbeing we know are attached to structured, secure employment.

More bargaining power for casual, low paid, and exploited workers.
The Australian workforce has been undergoing a trend of casualisation for at least the last two decades. The rise of the gig economy, labour-hire companies and other contract work has provided flexibility for some, while depriving a great many others of access to the workplace protections and entitlements the union movement has fought to secure. In addition to further regulatory oversight and the bargaining arrangements for contract workers being advocated by Australian unions, a Job Guarantee would create a meaningful alternative for those in casual work. Job Guarantee jobs are paid at the minimum wage, and carry the same entitlements and benefits as full time work provided pro-rata for the amount of time worked. Removing the threat of unemployment during workplace bargaining provides workers with a stronger negotiating position. Private sector employers have to offer conditions that are competitive with the Job Guarantee alternatives or they simply won’t have a workforce. This also means governments can readily enforce future changes to work requirements, shortening the working week or increasing wages and enforcing their adoption by guaranteeing access to a public alternative. This is a powerfully redistributive mechanism to reverse the downward trend in the wage-share of GDP.

Recognising and remunerating an expanded field of human activity as work.

The current boundaries of what we consider productive labour were set by capitalists, colonialists and patriarchs. Women perform significant quantities of labour that our communities would not function without, and yet which are neither remunerated nor recorded in measures of economic performance. Similarly, many regional Indigenous communities have seen young people forced to move off their land, or take work in local mines because governments have underfunded their communities and failed to provide longterm funding arrangements for successful initiatives like the ranger program [22].

The current boundaries of what we consider productive labour were set by capitalists, colonialists and patriarchs.

A Job Guarantee gives local councils, nonprofits and registered charities an unconditional pool of funding to create jobs, and to define the boundaries of work as they see fit.

Communities have diverse communal needs – from urban maintenance, to aged care, or additional help in classrooms. A Job Guarantee seeks to socialise the delivery and resourcing of community needs that aren’t sufficiently met by the market or volunteer labour. By separating the offer of employment, from the profitability of employment we are empowered to rethink what kinds of labour are socially and communally beneficial, and then pay people and train people to do it. An important feature of this model is that it breaks down the distinction between voluntary and paid labour. Rather than than paying everyone the same lump sum, and maintaining the gendered distribution of unpaid work thereafter – it offers full compensation to the people performing what would have been unpaid work.

Targeted investment in communities suffering the greatest deprivation.

A Job Guarantee targets public funds towards areas of high unemployment and social deprivation. Many regional areas have unemployment rates that are four or five times higher than the national average, and need greater stimulus than populous major cities. As people enter the Job Guarantee program, they also become local consumers, with their higher wages going towards the stimulation of private businesses in areas that previously had no alternatives. For many people it will serve more as a transitional job in a revitalised community with the funds and income base to pursue its own development. It prevents the flight of young people from regional or rural areas, and addresses many of the flow-on anti-social consequences of widespread unemployment, by ensuring that if people want to stay in the places they and their families grew up there are options that make that financially viable.

Additional resources to address unmet community needs.

In addition to providing communities with a larger, higher income consumer base and solving many of the flow-on social problems that come from involuntary unemployment, a Job Guarantee also provides local communities with a ready supply of people to address unmet community needs. Whether it’s urban maintenance and renewal, employing local artists and musicians to run classes and enrich the cultural options for residents, or just better staffing of public infrastructure and services, a Job Guarantee mobilises a pool of people toward socially desirable community outcomes. These needs will change region to region, and are best determined by local councils, and community organisations embedded within the area. A Job Guarantee also changes the marginal cost of formal public service jobs. If the government has to offer employment to everyone who wants it, the cost of outsourcing public services becomes significantly higher than retaining and expanding local staff. Not only would governments need to pay the new contractors, but they’ll also pick up the tab for any workers displaced by the new arrangement who take advantage of the Job Guarantee. A Job Guarantee offers a vision of a large, skilled public service rather than a shrivelled state run by contractors, and aligns the financial incentives of government accordingly.

A Job Guarantee offers a vision of a large, skilled public service rather than a shrivelled state run by contractors, and aligns the financial incentives of government accordingly.

Macroeconomic stabilisation: sustainable, non-inflationary full employment.

The limit of what a sovereign, currency issuing government can afford is defined by the available real resources of the economy they manage. The Australian government can afford anything that people are willing to sell to it in exchange for the Australian dollar, but if it runs deficits so large that it pushes beyond our productive limits, it will drive up prices. The economic stimulus created by a Job Guarantee by definition focuses government spending on currently unemployed resources and operates countercyclically, creating a full employment economy without inflation. During an economic contraction, the number of people accessing the Job Guarantee will grow, increasing the stimulus provided and keeping the economy at full employment without pushing it beyond. As the private sector recovers and grows, it will hire people out of the Job Guarantee program, leading to less government investment when it’s not needed. Additionally, under a Job Guarantee government injections are linked to a concrete unit of real resources: an hour of socially useful work. It anchors the value of the currency for the people earning it, preventing a host of unpredictable and potentially undesirable financial behaviours.

This post by Ed Miller first appeared in 2018 in Green Agenda

References:

  1. Australian Bureau of Statistics, Job Vacancies, Australia cat. no. 6354.0;
  2. Australian Bureau of Statistics, 2018, Labour Force, Australia cat. no. 6202.0
  3. Cristobal Young, “Losing a Job: The Nonpecuniary Cost of Unemployment in the United States” Social Forces 91(2) 609–634, Oxford University Press, December 2012
  4. Franklin D. Roosevelt, State of the Union Address, 1944
  5. Philip Randolph and Bayard Rustin, “How the Civil-Rights Movement Aimed to End Poverty,” The Atlantic, February 2018
  6. William Mitchell, “The Job Guarantee and NAIRU”, Centre for Full Employment and Equity, The University of Newcastle 1998
  7. William F. Mitchell and Warren B. Mosler “Fiscal Policy and the Job Guarantee”, Centre for Full Employment and Equity, The University of Newcastle 2002
  8. Randall Wray, “A Consensus Strategy or a Universal Job Guarantee Program”, Policy Note, Levy Economics Institute, March 2018
  9. Pavlina R. Tcherneva “The Job Guarantee: Design, Jobs, and Implementation”, Working Paper, Levy Economics Institute, April 2018
  10. Randall Wray, Flavia Dantas, Scott Fullwiler, Pavlina R. Tcherneva, and Stephanie A. Kelton, “Public Service Employment: A Path to Full Employment”, Report, Levy Economics Institute, April 2018.
  11. Jayati Ghosh, “Can Employment Schemes Work? The Case of the Rural Employment Guarantee in India”, in Contributions to Economic Theory, Policy, Development and Finance (2014), edited by D.B. Papadimitriou, Levy Institute Advanced Research in Economic Policy, Palgrave Macmillan, London.
  12. Pavlina R. Tcherneva, “Beyond Full Employment: What Argentina’s Plan Jefes Can Teach us About the Employer of Last resort,” Employment Guarantee Schemes Job Creation and Policy in Developing Countries and Emerging Markets, (2012) edited by Michael Murray and Mathew Forstater, 79–102. New York: Palgrave Macmillan.
  13. Steve O’Neill, “Working Nation: A Progress Report”, Parliamentary Research Service, Current Issues Brief No.32, 1995
  14. Nick Taylor, American-Made: The Enduring Legacy of the WPA: When FDR Put the Nation to Work (2008), New York: Bantam Books
  15. Jeff Stein, “Bernie Sanders to announce plan to guarantee every American a job”, The Washington Post, April 23, 2018.
  16. GetUp, “Job Guarantee: Well-paid work for all who want it,” Future to Fight For, 2018.
  17. These core features have been distilled from the summary contained in Pavlina R. Tcherneva “The Job Guarantee: Design, Jobs, and Implementation”, Working Paper, Levy Economics Institute, April 2018
  18. Randall Wray, Flavia Dantas, Scott Fullwiler, Pavlina R. Tcherneva, and Stephanie A. Kelton, “Public Service Employment: A Path to Full Employment”, Report, Levy Economics Institute, April 2018.
  19. Claire Connolly, “Why a universal basic income is a poor substitute for a guaranteed job,” The Conversation, January 2017.
  20. John A. Salmond, The Civilian Conservation Corps 1933–1942: a New Deal case study. (1967)
  21. Beth Cook, William Mitchell, Victor Quirk and Martin Watts, “Creating effective local labour markets: a new framework for regional employment policy”Policy Report, Center for Full Employment and Equity, November 2008
  22. Melinda Boutkasaka, Greg Dunlop, “’Invest in success’: Indigenous rangers eagerly await funding boost,” NITV News, July 2018

 

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