Common space, the news website linked to the Common Weal think tank in Scotland, reported last Thursday that:
FIRST MINISTER Nicola Sturgeon has tentatively revealed that some form of Job Guarantee scheme may be included in the next Programme for Government in September.
Speaking at a public meeting of the Scottish Cabinet in Stirling on 7 August, Sturgeon was asked whether a Job Guarantee scheme would be part of her vision for a Scottish Green New Deal.
A Job Guarantee is an economic policy intended to address both inflation and unemployment, which is generally understood to involve the state acting as an ‘employer of last resort' to the unemployed.
Different versions of the idea have been proposed across the world, most recently in the United States by presidential candidate Senator Bernie Sanders,who in 2018 announced a plan for the US federal government to guarantee a job to every American worker “who wants or needs one” across hundreds of projects in areas such as education, infrastructure and caregiving.
Doing other things has prevented me commenting since Thursday, but it's still appropriate to do so.
First, of course I welcome this.
Second, a job guarantee is a logical part of a Green New Deal, which offers work in every constituency by ensuring jobs are available everywhere to transform our green infrastructure, and most especially our housing.
Third, it has to then be noted that this policy is linked to modern monetary theory, which is the only current school of economic thought that makes full employment for those who want work its core objective.
And fourth, and inevitably, this policy is in opposition to the SNP's commitment to Andrew Wilson's Growth Commission plan for Scotland.
The Growth Commission prioritised what it saw as financial stability for Scotland. So sterlingisation was proposed. And fiscal constraint to build up foreign currency reserves is the stated intention. Whilst market interests are appeased. All of which spells Engkush-imposed austerity, in summary.
Austerity and a job guarantee are inconsistent. Austrerity is about fiscal contraction and a job guarantee is about fiscal expansion to the limit of full employment within a chosen carbon constraint. These options are incompatible with each other.
The SNP has to choose, and only a job guarantee to support a Green New Deal serves the interests of the people of Scotland. It's time for the SNP leadership to say so.
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As a campaigning Independinista, and following the recommendation on this web site, I attended the MMT Scotland event explaining MMT within a Scottish independence perspective. Most important two hours I have spent in a lecture theatre this century.
Would be interested in having links to video clips or transcripts if there are any please.
Just search Youtube for MMT scotland!
Was that the meeting with Bill Mitchell and Warren Mosler? I was at that meeting and I am afraid I came away less impressed than before the start. I thought it was a masterclass in only looking at half the picture. Bill Mitchell was eloquent of the evils of the EU. I could have been back in Northern Ireland hearing an Evangelical Presbyterian explaining to me the finer details of the Catholic Church. I thought to myself, yes but…. the EU has also some compensating advantages and some opportunities for improvement. Warren Mosler explained how exports are a cost and imports are a benefit. But countries don’t just give stuff away, they sell it. The issue is whether or not they get a good deal. He would make a very pessimistic shopkeeper.
They were both very keen on the Job Guarantee, but I would love to have heard its advantages over universal basic income (apart from being more palatable to miserable Scottish Calvinists). Interestingly, in the Great Irish Famine, the Quakers built soup kitchens, the Government provided job guarantee. I think it is accepted that the Quakers got it more nearly right.
I did not agree with what Bill Mitchell said about the EU. I did not think it detracted from the MMT message
Michael,
Bill Mitchell is Australian and Warren Mosler is American. Neither of their home nations are in the EU so neither of them has any skin in the Brexit debate.
Their academic position is that the EU is inherently neoliberal in culture and institutional arrangement. Further they both believe that the EU is incapable of any major transition from this neoliberal economic stance.
That’s a faith based position because the future hasn’t all happened yet so we don’t know that the EU won’t ever change.
Richard and most commenters on here have faith that the EU will eventual change and that, even if it doesn’t, the UK doesn’t need to leave in order to fix our own economy in an MMT style anyway – so why leave? It’s necessarily a more nuanced and pragmatic perspective because Richard and I assume most on here live in the UK.
I’m not knockout either perspective personally because I really don’t know what’s going to happen in the future.
What I think is worth considering is that if Scotland leaves the UK after the UK leaves the EU then Scotland will not inherit the UK’s existing relationship with the EU. An independent Scotland looking to rejoin the EU would be under considerable pressure to accept all the EU’s neoliberal arrangements AND move towards joining the Euro.
As a smaller nation joining late in the game Scotland will be highly unlikely to get any of the concessions the UK got back in the day. For me, as a recent immigrant to Scotland this means I’m leaning towards Scottish independence, a Scottish currency and continued independence. I.e. don’t rejoin the EU.
That’s where Bill and Warren’s advice is useful and worth listening to. Not so much I’m the existing brexit debate but in the scenario Scotland gains independence. I don’t know the answer but I fear that everyone will want to rush to join the EU without properly thinking it through.
Certainly though I think unless Westminster permanently rejects neoliberal austerity and gives Scotland much greater fiscal powers of its own then our best bet is independence from the UK.
The list is the critical argument
The last is the killer argument…
Yup. Crucial. An independent currency is essential for an independent country.
While not totally relevant to this particular blog, I have a problem with a Job Guarantee scheme in that while (I think) I understand the economic/MMT and social arguments for and around it, I have difficulty in comprehending how it might work in practice, or in conjunction with the current job market.
Why?
I too, have come to the view that the Job Guarantee is distinctly problematic:
http://www.progressivepulse.org/economics/modern-monetary-theory-is-logically-inconsistent-with-a-job-guarantee
I agree that MMT treats it as a panacea and the real world is messier than that
I also see problems with UBI, but that MMT oversells them
The reality is any outcome will be suboptimal, but better than doing nothing
That’s the best we always manage – and that’s fine: we are all constrained
I don’t know – it’s an aspect of the policy over which I haven’t had the light bulb moment…
I get that it is a ‘good thing’ which we can afford.
But what happens at the practical level?
My assumption is that it means more than ‘full employment’ being a political priority.
So if someone doesn’t have a job (for how long? day, week, month, year?), what happens? Is there some sort of Guaranteed Job Service that they call, that works in the opposite way to normal agencies (instead of calling people to say ‘there’s work for you’, they get called to say ‘you’ve got a worker’)? What are they doing on the other side, to have work for all these workers that they may (or may not) have?
Effectively the plan would be that local authorities would provide work, funded by a job guarantee scheme.
The work would be socially useful.
It would pay a living wage.
Skills should be added.
But the aim is to ensure people can move on to other work.
Is there socially useful work available? Yes, of course there is. And partners could suggest it, effectively taking on the management of work in the process, but with funding supplied. Is that plausible?
Jeremy and others with Job Guarantee concerns:
The point of the JG is that it’s just a vastly better automatic stabiliser than unemployment benefits. It’s not the be-all-end-all solution to all our problems – it isn’t sufficient to fix our economies – it is necessary though because it is better than the alternatives.
Also regards JG vs UBI: UBI is envisaged as a solution to the problem of technologically based unemployment I.e robots take our jobs so we need UBI.
That’s all well and good but while ever there is socially/environmentally useful stuff that is not being done it makes sense to have a JG instead of UBI. That way we get these social/environmental goods that the profit motive isn’t sufficient to encourage us to do AND those people doing the work get to feel they’re doing something useful for society and gain skills and confidence.
Now if robots really start getting their teeth into everything then the solution is simple – full-time work, whether it’s private sector, public sector or JG just becomes ever fewer hours a week but at the same (or greater) pay. That after all is the point of having robots do all the hard work – we don’t have to!
Something else critics of the JG miss is that many activities that we wouldn’t currently consider to be work can be included. For example: a recently unemployed lorry driver (Tesla Semis running FSD took his job) gets a JG job learning to program, be a social worker or an ecologist. It doesn’t matter precisely what as long as it’s training in a skill that he is capable of mastering and that is still in demand in our economy. Pay the guy a wage while he retrains. When he finishes retraining he continues working in JG using those new skills until a higher paying job in the private or main public sector opens up for him. Now how is that not demonstrably better than him just collecting poverty inducing unemployment benefits till he accepts a precarious poverty pay job in the private sector?
@Richard. Thanks for the explanation. I think my difficulty was down to a difference in interpreting the terminology: I appreciate what you describe (and which matches what you mean by the term), but it is something I would perhaps describe as a practical means of achieving (virtually) full employment, and a bit less than what I expected it to mean, as it does leave a (small) unemployment gap, until people can take up a JG job.
@Adam. My concern was not over the whether and why, rather the how and what, which Richard has allayed.
Regarding UBI my thought is that perhaps it is a repurposing of social security from a safety net to a launch pad – you have it, now go and do better with a normal (or JG) job, or self employment.
Jeremy,
I have to admit I’m somewhat cynical about the UBI. I feel like it’s a “take this cash and shut up and buy our stuff” kind of thing rather than a “let’s all get together and do great things now we’re freed from the 9-5 by UBI!”.
But then JG has some issues in that local democracy and civic engagement has to be alive and well before a locality can get the most out of its JG workforce.
I guess there’d be a learning period for society after the introduction of either UBI or JG before we could expect to get the best out of either system.
MMT = ” fEll” employment?
Freudian slip?
No, just pre-coffee editing!
[…] And is it committed to full employment or a fiscal rule; a dilemma the SNP has also to resolve? […]
I was trying to get this over to people during Sunday dinner yesterday.
You cannot have politicians trying to improve the country who carry orthodox luggage around with them like austerity.
I was speaking in the context of BREXIT, where we all agreed to encourage those MPs who were opposing it.
But say if it was stopped? What then? If those same very politicians had orthodox, Thatcherite views, we would just end up with the causes of BREXIT all over again. That remains a big risk as long as MMT, GND, PQE are not embraced and tried.
[…] And is it committed to full employment or a fiscal rule; a dilemma the SNP has also to resolve? […]
Does a job guarantee depress wages?
At a living wage it should enhance them
And by liberating workers on minimum wage to think there are better things to do it should increase wages
It does both.
For the bottom, It lifts the wage floor level, to living wage. Workers are able to leave their jobs and take up a JG if the company they are working for do not offer the same wages as JG.
For the people a bit more up the wage level than the bottom, wages may also increase since people with better jobs will see their incomes reduced compared to those at the bottom now being paid the living wage, and they will want a pay rise also.
For the middle to top, it may depress wages. When companies have to pay their workers more otherwise loose staff, then this means less chunk of profits left over to pay the bosses. In addition, many might feel more confident in setting up their own business since there is a JG backup plan should everything go bad, and more people running their own businesses mean more market competition bringing down the profits of the big boys.
Also, since JG brings many long term unemployed, who maybe considered unemployable by the private sector, back into employment this increases the supply of workers ready to take up jobs in the private sector, and increase in supply means less pressure on wage rises.
So the overall effect is to reduce inequality, raising the wages of the poor, while depressing the wages of the rich. Some say this effect will have a greater, more effective inflation stabiliser than the current NAIRU approach of forced unemployment.
Is this another type of ‘workfare’ scheme, which was emphatically opposed by various orgs 20/30 years ago?
No….
Ian,
It isn’t workfare.
Firstly JG will be safe and dignified activity paid at a living wage.
Secondly it covers a very broad set of activities for which the only selection criteria are that they be socially and/or environmentally beneficial either immediately or in the long term and that the JG worker be capable of doing successfully doing that activity.
Thirdly JG workers are not working for any private firms – they’re working for society as a whole.
Fourthly if an individual is unwell or physically/mentally incapable of full-time JG work then they would get the same income for whatever activity they are able to comfortably manage – which might be no work activity at all.
No-one will be forced into doing crappy/dangerous work for poverty wages for the profit of a private entity.
Is there anywhere a JG has been implemented? Are there any metrics?
I think Gower Centre have that data