Regular readers will know that I have spent quite a lot of time reading the…
Setting things straight about the Job Guarantee
We need to get a few things straight. And this is partly for those out there who seem to think that the extent of literature on Modern Monetary Theory (MMT) or the Job Guarantee within MMT is confined to collections of Tweets that allow 280 characters or Unicode glyphs. One doesn’t become an expert on ‘full employment’ or ‘political economy’ because they have suddenly realised there is a major crisis in the labour market and have decided to strategically place their organisations for self-serving purposes to be champions of full employment. There is an enormous literature on the Job Guarantee and I have been a major contributor along with my valued colleagues. This is a crucial time in history and one of the glaring deficiencies in the current crisis and economic management in general is the lack of an employment safety net. This is what MMT has to say about that safety net and stabilisation framework.
Some recent high profile Op Eds in the mainstream Australian press that I have written in partnership with indigenous leader Noel Pearson have apparently inflamed the so-called progressives out there who seem to:
1. Object to me writing in the Murdoch press.
2. Object to me writing with Noel Pearson.
3. Object to me saying that I would scrap the current unemployment benefits system in Australia and replace it with a Job Guarantee.
4. Conclude that I have a naive grasp on the ‘political economy’ in Australia and are essentially pushing MMT towards a hard right political position.
Most of the objections come from people who have a past history with the Australian Labor Party in one way or another.
Lecturing someone about their grasp on political economy when they belong to organisations that spent millions of dollars at the last federal election in an attempt to get rid of the worst conservative government we have had, only to see the government returned with an increased majority is not very smart.
Further, spending considerable dollars targetting certain Ministers and then seeing them getting increased votes is not a very good indication of a sound grasp on political economy. In one case, in Brisbane, the Minister was totally unelectable but increased his majority such was the toxity and incompetence of the campaign that the organisation in question pursued.
Apples and oranges
Then there was a Tweet informing the world that all the MMT scholars other than me supported retention of the unemployment benefits if a Job Guarantee was introduced.
The message was that I was alone in that view and no longer represented the MMT position.
While it is not clear that the names quoted in that Tweet would have supported being named in that way, the point is that even if the statement was true, they were all US-based economists.
Why is that important?
The US unemployment benefits systems are not remotely comparable to the Australian system.
They are mostly decentralised systems (state based) with some Federal additions, the policies are not uniform across the states, and the systems tend to exclude workers who are deemed to have been fired for ‘misconduct’.
This BLS fact sheet – State Unemployment Insurance benefits – is instructive.
The US systems are mostly funded by “a tax imposed on employers”.
You have to have worked a “base period” (a minimum amount of time earning wages before being eligible).
Once on benefits, which are finite, your obligations is to answer questions about “continued eligibility” (mostly whether you have been working or not or have had job offers).
Whether a person has to “register for work with the State Employment Service” varies and is not uniform.
The benefits are computed “on a percentage of an individual’s earnings over a recent 52-week period” – so they are not uniform nor progressive.
The benefits run out after a “maximum of 26 weeks in most States” and Federal income taxes are levied.
Conversely, the Australian system is federal and provides a uniform payment to workers who are deemed eligible. It is not an insurance system nor does it base the payment on any past earnings.
The current unemployment benefit (ignoring the short-term pandemic supplement) is well below the adult poverty line and the gap has been getting worse in both real and nominal terms.
But most importantly, unemployment benefit recipients are subjected to harsh work tests, are case managed within the sociopathological privatised ‘unemployment industry that pockets millions of dollars from federal payments but does very little to help the unemployment reenter the paid work force.
This privatised system punishes unemployment workers by reporting them to government who then ‘breaches’ them – which means they lose their miserable unemployment benefit.
In that context, I would doubt whether any of my US-based MMT scholars (those names in the Tweet referred to above) would advocate the retention of such a system that the unemployed have to tolerate in Australia.
So trying to ‘divide-and-conquer’ by asserting views that might apply within one nation as being applicable to another nation, which has a completely different system of unemployment benefits is not very smart.
It is like talking about the US going broke because Greece can!
And then the question is why would any Australian progressive want to keep our pernicious unemployment benefits system when a guaranteed job was provided at a socially-inclusive minimum wage supplemented by social wage benefits (a service guarantee if you like) and workers had the right to choose the hours they worked in the Job Guarantee?
I will come back to the Job Guarantee pay and conditions argument presently.
But let’s tease this out a bit.
These so-called progressive champions of full employment might reasonably say they don’t support the pernicious nature of the current system.
So then what have we left?
Effectively a UBI or some version of it.
So we are back to that – they would want a UBI to be run parallel with the Job Guarantee.
I noted a Tweet from someone claiming to be an MMT proponent saying exactly that.
Well none of my American MMT economics colleagues support the introduction of a UBI.
The fact is that once you go down the UBI route you are diluting the inflation anchor provided by the Job Guarantee – which is a central proposition within MMT, and, is one of the features, that sets it apart from mainstream macroeconomics.
And once you dilute the inflation anchor, then you are effectively back in a NAIRU world where unemployment is used as a policy tool to discipline any inflationary processes.
You cannot have it both ways as an MMTer.
If you support a UBI then you should not hold yourself out as a proponent of MMT.
Simple as that.
I recommend reading this blog post – The provenance of the Job Guarantee concept in MMT (April 20, 2020) – where I explain the foundations of the Job Guarantee with MMT and how Warren and I approached that issue when we set out on the MMT journey.
In that blog post, I discuss the debates about inflation control and the role of the Job Guarantee – as being much more than a meagre job creation program, a point not well understood by those who come late to our work in a time when inflation is of no consequence.
When I came up with my version of the Job Guarantee in 1978, the problem to be addressed was high unemployment and high inflation and a mainstream profession that was claiming the high unemployment was ‘natural’ and that the government could do nothing about it.
Workfare on steroids?
Some other person who is apparently trying to position their organisation as the champion of full employment claimed to be appalled by my work and asserted that:
The Pearson-Mitchell proposal which is basically WFTH on steroids, and exactly what many of us warned would happen to Mitchell’s JG.
And exactly what literature has this person read? A highly word-constrained Op Ed in The Australian that I wrote with Noel Pearson? More?
Where in the millions of words I have written over the last 42 years on unemployment, employment guarantees, work-for-the-dole (WFTD), and all the rest of the topics would she be justified in saying that I endorse a Workfare approach to unemployment support?
It would be impossible to find that sort of inference from my work.
In Australia, Work-for-the-dole has the following characteristics:
1. As stated by the government in Senate Estimates some years ago, it is a compliance program.
2. It pays below the hourly legal minimum wage – effectively forcing workers to engage in work but at below poverty line and legal wages.
3. It does not allow any choice over hours of work.
4. It does not allow a worker to engage in extended training nor does it provide training ladders.
5. It is finite in time period.
6. It requires the worker to participate in the pernicious work test and case management system described above.
7. It offers no additional benefits such as holiday and sick pay, superannuation, and other social wage benefits.
8. No allowance is made for workers with mental health problems etc.
9. The State takes no responsibility for the failure of the economy to generate enough jobs.
Compare that with the Job Guarantee that I have consistently advocated over my career, which could not be conceived of being a more elaborate form of Workfare.
1. A guaranteed job for anyone who wants to work and cannot currently find a job.
2. They would receive a socially-inclusive minimum wage.
3. They would receive holiday and sick pay entitlements, superannuation contributions from the employer, and other special leave entitlements that are common in the permanent workforce.
4. They would be entitled to undergo training (on-the-job or in outside environments, including going back to school, college or university).
5. They would receive social wage benefits – what some might call guaranteed levels of services – such as health care insurance, free child care, transport allowances, access to legal aid supplements, etc.
6. Family Income Supplements: The Job Guarantee is not based on family-units. The Job Guarantee wage (available to anyone over working age) would be supplemented with benefits reflecting family structure. In contrast to workfare there would no pressure on single parents to seek employment.
7. They could choose whatever hours they desired to work – effectively eliminating time-based underemployment.
8. IMPORTANTLY, a worker would be given a grace period on accessing the Job Guarantee. Their wage would start immediately but they could have 3-4 weeks before having to start work where they could sort out their affairs, ‘take a breather’, engage in job search if they wanted, etc. During this period they would be paid the standard wage rate.
9. The job would be permanent if they chose.
10. The job design can be flexible to help workers with special difficulties enjoy a productive working life (for example, the provision of clinical support within the workplace to help people burdened with episodic illnesses)
We have developed this concept based on extensive national surveys of Local Governments.
I have been involved in a major, long-term project with mental health professionals running pilots providing work for youth with psychosis and seeing how flexible workplaces can reduce the problems that such a cohort face.
I have worked in developed countries on major work projects and helped design a minimum wage framework for workers in South Africa.
What does a socially-inclusive minimum wage mean?
I have regularly written analytical reports for trade unions who are defending industrial matters on behalf of the members in the Fair Work Commission in Australia. That often requires me to appear as an expert witness in the relevant matter.
My view has always been the same as it was when I was helping in the South African situation.
I do not consider minimum wages should be set on private sector capacity to pay principles. The employers should adjust not the workers.
The minimum wage as a statement of how sophisticated you consider your nation to be or aspire to be. Minimum wages define the lowest material standard of wage income that you want to tolerate.
Accordingly, it should be a wage that allows a person (and family) to participate in society in a meaningful way and not suffer social exclusion or alienation through lack of income.
That means being able to go out for dinner sometimes, go to sporting or other major events, have a holiday somewhere.
A socially-inclusive minimum wage should be a statement of national aspiration.
In any country it should be the lowest wage that society considers acceptable for business to operate at. Capacity to pay considerations then have to be conditioned by these social objectives.
If small businesses or any businesses for that matter consider they do not have the ‘capacity to pay’ that wage, then a sophisticated society will say that these businesses are not suitable to operate in their economy.
Such firms would have to restructure by investment to raise their productivity levels sufficient to have the capacity to pay or disappear.
This approach establishes a dynamic efficiency whereby the economy is continually pushing productivity growth forward and allowing material standards of living to rise.
I consider that no worker should be paid below what is considered the lowest tolerable material standard of living just because some low wage-low productivity operator wants to produce in a country and make ‘cheap’ profits.
I don’t consider that the private ‘market’ is an arbiter of the values that a society should aspire to or maintain. That is where I differ significantly from my profession.
The employers always want the wages system to be totally deregulated so that the ‘market can work’ without fetters. This will apparently tell us what workers are ‘worth’.
The problem is that the so-called ‘market” in its pure conceptual form is an amoral, ahistorical construct and cannot project the societal values that bind communities and peoples to higher order considerations.
The minimum wage is a values-based concept and should not be determined by a market.
Anyway, those principles govern the way I have operated as a professional over many years.
I have not seen too much analysis coming over the years on these topics from those so-called progressives who are now slinging the mud about what Noel Pearson and I are trying to achieve by way of improving the lives of unemployed workers.
My position has always been the same.
A progressive society is one based on collective aspiration.
Neoliberalism is based on the promotion of individual aspiration even if it is at the expense of the collective.
That is why we are in the mess we are in now (health issues aside but connected).
I think the state has a duty to use its fiscal capacity to ensure there are jobs for all those who desire them.
In general, if there is something that is useful for the public sector to provide then I would create those jobs in the public sector in the standard way.
But there is also flux and uncertainty in private spending patterns and that requires a buffer stock either of jobs or unemployment.
Clearly, the costs of using unemployment to meet the flux and uncertainty of the private capitalist spending patterns are massive and extend well beyond the income (GDP) losses.
Using an employment buffer stock approach as an automatic stabiliser has to be superior to that approach.
So what are the responsibilities of people within that society?
I consider that persons who are able to work should to be required to take a Job Guarantee position to gain the income support if they are unable to find a job elsewhere.
They don’t have to take the Job Guarantee job. It is not a work camp approach.
But to receive the state socially-inclusive minimum wage under the conditions specified above they should be prepared to contribute back to society.
That is the progressive collective approach.
I argue that this possession of a job is a crucial source of self-determination for the typical worker in a capitalist system and the core of regional community development.
Please be clear – persons unable to work would be provided with a ‘living income’. This includes the aged, the sick, the disabled, the young.
They would have generous material support.
Tweets that claim that I support the abolition of all welfare are just plain straight out lies.
I don’t consider a healthy society is one that does not take responsibility to encourage young people to develop skills and engage in paid work, rather than be passive recipients of social security benefits.
There is strong evidence linking long-term unemployment and social exclusion, where the latter is manifested in economic deprivation, the absence of institutional support, and social, cultural and spatial isolation.
This is Noel Pearson’s concept of ‘passive welfare’.
If you are interested in this concept and how it relates to the Job Guarantee, please see – Conversation with William Mitchell and Noel Pearson, Newcastle, December 15, 2019.
The failure to engage in paid work, for whatever reason, cannot be narrowly construed to be merely an inability to generate disposable income which can be compensated for through a benefit, but entails a much broader form of exclusion from economic, social and cultural life.
Accordingly, the State would be evading its social responsibilities by providing an UBI or other form of benefit.
I think language loses all meaning if you think my work is ‘right-wing’ in nature or leaning, or that the Job Guarantee we propose is just nasty workfare or worse.
There will be more from Noel Pearson and myself in the near future as we launch a series of Live Streaming sessions promoting our work together.
But I hope that this blog post has clarified things for those who cannot be bothered researching our work in detail.
That is enough for today!
(c) Copyright 2020 William Mitchell. All Rights Reserved.
This Post Has 75 Comments
“9. The job would be permanent if they chose”
Does this represent a difference in approach between you and Warren Mosler? He has been emphasizing that the primary task of persons on the JG is to transition back to the private sector.
A minimum income is designed to provide its receiver with a financial claim on real goods and services. Because goods and services don’t fall from the sky (i.e., they must be produced), the integrity of a minimum income depends on a nation’s productive capacity. For example, a Third-World country cannot provide the same minimum income as a highly productive First-World nation.
By absolving abled minimum income recipients of any obligation to make a productive (work) contribution to the goods and services they can purchase, a Universal Basic Income (UBI) undermines the productive capacity foundation of a minimum living income. In other words, a UBI undermines itself – something that advocates of the UBI don’t understand or refuse to accept. A Job Guarantee (JG) overcomes this by tying work and the goods and services produced (obligation of the citizen) with the job provided and the minimum income received by the abled citizen (obligation of the State).
Warren Mosler would argue that the JG is designed to enable people to transition back to well-paid and meaningful private-sector jobs with decent employment conditions, not just any private-sector job. Provided the latter become available, most people on the JG would choose to make this transition.
Or to summarise:
It’s only MMT with a Job Guarantee
Perhaps a JG as you plan would have meant that the security firms in Melbourne would not have had a ready supply of cheap labour to approach via Whatsapp. As it appears many of these workers were left out of federal support measures so it is hardly surprising the outcome. What is surprising is that the federal govt has not been roasted for penny pinching! A society based on collective aspiration will always surpass a marketplace like the USA.
“Does this represent a difference in approach between you and Warren Mosler? He has been emphasizing that the primary task of persons on the JG is to transition back to the private sector.”
It’s the same approach. The task is to transition to the private sector – just as soon as the private sector comes up with an offer that persuades you to transition.
You’ll not find anything in Warren’s comments that puts a time limit on being on the JG. The power is in the hand of the worker. If they don’t find anything they like, they can stay where they are. It is for the private sector to improve its offer, not for the worker to lower theirs.
“a Universal Basic Income (UBI) undermines the productive capacity foundation of a minimum living income.”
It does and it doesn’t. Scratch the surface of any UBI scheme and you will find a set of people locked into the UBI zone via some currency peg or other exclusion mechanism who do not receive the UBI. Those are the workers who are exploited by the reinvigorated capitalist system UBI relies upon and where the surplus extraction takes place that props up the whole edifice.
It can be imports (Finland pays the UBI, Greece makes the stuff and is forced to export for Euros to pay the Troika), or it can be a qualification period (immigrants have to work five years before receiving the UBI) and probably a few others, or reserve currency hegemony (pus “export led growth” and supply more “reserve currency” dollars owned by rich oligarchs).
UBI supporters wandering around value signally how moral they are handing alms to the poor (oh and themselves but let’s not mention that), support this sort of exploitation.
Bill, a very well done and informative piece.
The only place I’d suggest changing it is to use the word “Imaginary” to describe the “market”and to go on and explain that it is conceived as “one man who will never die, who buys and sells to himself” as I have heard other MMTers & Mark Blyth describe it. Pound this point home.
That’s pretty clear on the Job Guarantee except I may have missed two points:
1. What happens to people who cannot work (for Eg disability reasons or perhaps as a carer)
2. What happens to people who choose not to work. Is there some form of residual unemployment payment ?
UBI is wildly popular amongst the Venture Capital types, since they see it as a way of continuing the current hegemony now the “lend lots of money” trick has run out of road.
Just in care you were in doubt, here is “Universal Basic Income is Capitalism 2.0”: https://timjrobinson.com/universal-basic-income-is-capitalism-2-0/
Which amusingly is tagged “supply side economics” and then studiously ignores any impact on the supply side.
“What happens to people who cannot work (for Eg disability reasons or perhaps as a carer)”
A carer is working. As is a single parent. You are expected to work on the Job Guarantee unless exempted by age or infirmity. The latter being determined by an independent qualified medical doctor, not some outsourced clipboard operative on incentive pay.
“What happens to people who choose not to work. Is there some form of residual unemployment payment ?”
Why do you think a person choosing not to work, when they could, should allow them to use state power to forcibly transfer output from other people for nothing in return?
The default job is “looking for a suitable JG position”. That’s where you start. Most people will want to get off that as soon as they can – because it is a pretty boring. Number 8 above
” IMPORTANTLY, a worker would be given a grace period on accessing the Job Guarantee. Their wage would start immediately but they could have 3-4 weeks before having to start work where they could sort out their affairs, ‘take a breather’, engage in job search if they wanted, etc. During this period they would be paid the standard wage rate.”
” If they don’t find anything they like, they can stay where they are. It is for the private sector to improve its offer, not for the worker to lower theirs.”
Hey Neil, I like that answer.
Mainly I’ve been trying to bend my mind around Warren’s comments in this podcast episode:
I’ve asked him on twitter about this and he gave some helpful hints, but I’m still trying to figure out if all the MMT heavies are on the same page here.
We probably could have both because it is time to start talking about the retirement age. Look at what it takes to be able to retire at 55.
16-55 year olds provides all the goods and services needed and you say to the private sector once people reach the age of 55 you can no longer have them. From that simple statement so many positive things happen. Then the job guarentee becomes what it was designed for a transition mechanism. Once the private sector know they have to provide everything everybody needs with less workers surely productivity will increase naturally.
Over 55’s are provided for with a UBI. A healthy decent payment, a reward if you like for doing their part for society. Which gives the left a social contract blueprint that everyone can vote for. Which would allow us to change The private pension industry and The FIRE sector.
The more and more I have thought about this model, all I can see are good things happening that address most of the issues around employment and fix a lot of the issues that stem from unemployment. Of course all of the usual issues like real resources constraints and inflation will apply, but all that would be needed is more focus and better embedded structures of planning in the system to overcome these issues. As you become more productive the retirement age can be re visited and 50 would be the new target.
My own view is this should be the next MMT book. I’ve never liked the idea that MMT is a lens, as ever since the concept was introduced, it has been exploited by the liberal middle class with their art degrees and economists from the left. Ann Pettifor and others come to mind and the accountant Richard Murphy.
The title of the book ” Life begins at 50 how we get there”
If there is no MMT without a Job guarentee. Then let’s smash the lens and let’s put some nuts and bolts and streamline the approach, to show what needs to be done to the economy to achieve this new social contract. Once the social contract is the goal then policies can be attached to the principle to get the job done.
I hope one day MMT economists get together and write it. History books are done now let’s start writing about the future.
When the US president done that speech about landing man on the moon which Stephanie highlighted in her book about real resource constraints and skills.
Just replace the words moon landing with retirement at 55.
Job done. Central plan the life out of it.
“Over 55’s are provided for with a UBI”
That’s not “Universal”. Can we just call it a Retirement Pension like we always used to?
And incidentally the Retirement Pension is where the “distributive justice” point UBI people like to rely upon is already allocated.
You get the retirement pension when you take the inherited capital and maintain it throughout a career while training the next generation to use that capital and passing the capital onto them in a usable and preferably improved state. At that point you are entitled to ask the next generation using the capital and skills you have furnished them with to work those extra hours to produce a surplus to maintain you. As we do already for the working generation just gone.
And of course those who are young now will become old and know that they in turn will be maintained for the same reasons. It is self perpetuating and palpably fair.
The 18 year old who thinks they should be entitled to retire immediately and citing his share of the “inheritance” as justification is just a teenager that really needs to grow up. You don’t get to enjoy the fruits of the garden until you’ve tended it.
“UBI is wildly popular amongst the Venture Capital types, since they see it as a way of continuing the current hegemony now the “lend lots of money” trick has run out of road.”
That is ironic, because a fair number of left leaning types actually believe that the UBI is the path leading to the end of capitalism; which they view as the root of all evil.
I suppose they both are partly correct; we won’t really have a capitalist system if large numbers of people refuse to participate in the economy, except as consumers. The gravy train would continue for venture capital as long as the government is willing to pay the former workers to buy the goods and services they wish to sell though.
The problem with the whole thing is that converting labor into mere consumption units would be the beginning of the end of human development. Labor and progressive development are strongly linked.
Superb exposition of the JG here.
For me it is quite emotional as well as I feel the last twenty years of my life’s potential were partly wasted by the absence of a JG as Bill describes it.
At 42 I had a bad nervous breakdown (after a career in school teaching!) and was subsequently diagnosed with M.E which meant I had to rest frequently. I thought that some retraining and a part-time job could have been possible as long as there was a living wage attached to it.
Instead I had to periodically attend interviews with fly-by-night, dodgy companies that got a wad of Government money to waste the time of those in my position trying to force them into some spurious self-employment so that they would achieve desirable statistical outcomes.
A JG would have allowed me to access training and work in a pattern that conformed to my underlying health condition. Instead one was put under threat of sanctions, hounded by assessment companies that didn’t know their arse from their elbow (but had nice looking mission statements) . The impact of this on my mental health was atrocious.
In the end, the only way I could move forward was by small amounts of voluntary work (in the mental health sector) and starting to self-educate (MMT amongst other things!). But even this was perilous because if you did a bit of voluntary work they could then day ‘you’re fit for work’ force you into a poorly paid full-time job with the result that one’s health collapsed again and a consequent slide into penury. ‘Fit for work’ meant: ‘you can conceivably do some sort of job that doesn’t exist in the real world but only conceptually.’
I’m now 60 and I consider much of my potential wasted over the last twenty years. Worse than that was the Tories’ systematic vilification of the poor/ill/unemployed as ‘scroungers’ and ‘skivers’ which added to low self-esteem and poorer mental health. I fought the Government to some extent (which was a sort of Job Creation of its own!) spending two years taking them to court over bedroom tax policy with the help of pro bono solicitors.
The shocking shambles of the way we waste human potential is sickening. The JG IS the answer to this but it first requires an intelligent Government that can think flexibly and puts human needs at its centre. Not coming to a cinema near you anytime soon!
@ Neil Wilson
“‘What happens to people who cannot work (for Eg disability reasons or perhaps as a carer)’ (Mark Kelleher)
“A carer is working. As is a single parent. You are expected to work on the Job Guarantee unless exempted by age or infirmity”.
Which taken at face-value doesn’t appear to answer the question. (Exemption on grounds of age or infirmity not being germane here).
It only does so if one *takes as read* (in default of its being stated explicitly) that carers and single parents are to be classified automatically as JG employees by virtue of that status.
For the sake of clarity, is that you meant?
correction: “…is that what you meant?”
@ Neil Wilson
“‘What happens to people who choose not to work. Is there some form of residual unemployment payment ?’ (Mark Kelleher)
“Why do you think a person choosing not to work, when they could, should allow them to use state power to forcibly transfer output from other people for nothing in return?”.
I can’t answer for Mark but own answer would be:- “Because common humanity demands it” and also “because without the bare means of sustenance they will starve to death”.
Resistance to the JG being caused to be undermined I could understand as a motive. But paying someone no more than the pittance required to keep him/her alive can scarcely be held to present any threat to the JG scheme, can it? So what *is* the motive for witholding that much?
Have we entered the realm of Keynes’s “remorseless logician”?
“Which taken at face-value doesn’t appear to answer the question”
It answers the question as much as I can answer it. What is considered a suitable time contribution to wider society isn’t handed down from God. It is a political decision for the society to decide upon.
With the JG we have to *explicitly* have that discussion before we can implement it. Rather than try and sweep it under the carpet and hope people won’t notice. They will notice. They are noticing. (The grumbling about clearly non-frontline NHS workers using their cards to jump queues is growing for example).
I would consider looking after a child to be work. When a child is born a job of work is created that continues until the child is looked after in some other way (the nursery/school system) or can look after itself. But you would be surprised how many denizens of Mumsnet disagree with me (paying people to raise children is disgusting. They should only be raised with love).
I would consider caring for those unable to care for themselves to be work that should be paid for as well. Quite a lot of people consider it to be a family duty and burden that should be shared *alongside* work with no extra state payment.
The question is why are we not paying for them now. And if we’re not going to consider them work, what are we going to do for the people clearly doing those jobs.
“because without the bare means of sustenance they will starve to death”
That would be their choice though wouldn’t it. What about personal responsibility. Do you not consider them to have agency and they need to be fed like chickens?
They have chosen that course of action. Just as surely as if they had chosen not to fill in a benefit application form.
“But paying someone no more than the pittance required to keep him/her alive ”
Then you can contribute to a charity to do that for people who you think should be kept. The transfer is then entirely from you and people who think like you do. If there is sufficient of you, there will be no problem.
Importantly I don’t have to be forced to pay for people who want to conscientiously object to contributing to society.
On my side one of the key benefits of the JG is that it clearly sorts the workers from the shirkers. And that is wildly popular politically – making it far more of a vote winner than “give money to everybody no matter how idle they are”.
Here, for me, is the key line in a key post: “I don’t consider that the private ‘market’ is an arbiter of the values that a society should aspire to or maintain. That is where I differ significantly from my profession.” Those within or without the profession of economics who DO consider the private market to be “god,” the ultimate source of values, and who also see the JG in favorable light, will view it as a program to shore up or enhance the “efficiency” of capitalism; i.e., merely as a convenient place to park unused/unexploited labor until sufficient wage-slave positions open up in the private sector. On the other hand, those who, within or without the profession of economics, think and live according to trans-market values, believe in a “god” other than the market, should view the JG as the advance guard of something much bigger, much more beautiful: the beginning step of reshaping our neoliberal system into a way of life that embodies, at its core, humane and environmentally-sensitive values. We must never forget that “Reclaiming the State,” the MMT equivalent IMHO of Marx’s manifesto, culminated with a clarion call for a “socio-ecological transformation of production and society.” The JG, as Bill here describes and clarifies it, is but a foot in a door that cries out to be kicked wide open.
‘On my side one of the key benefits of the JG is that it clearly sorts the workers from the shirkers. And that is wildly popular politically ‘
Wow. That’s a horribly loaded statement Neil that needs a good deal of unpacking. The ‘shirker’ moniker was established by a deliberate ‘grooming’ program from 2010 in order to denigrate anyone receiving benefits. The fact that it is ‘popular’ as you say is largely due to a very effective propaganda machine led by the ‘nudge unit’ or ‘behavioural insights’ team.
So I don’t think the terminology you use, given its background as a neoliberal, ideological tool should be used lightly. The Tories tried to make out that the whole welfare system was about shirking and that the ill weren’t really ill which has caused massive suffering (well documented) and arguably increased attacks on the disabled. By using that sort of phraseology you consciously or unconsciously ‘buy’ into it.
The word ‘shirker’ also implies that having a job automatically defines you as being a ‘contributor.’ I’d argue it most certainly doesn’t as there are plenty of people out there ‘in work’ who do things that detract from social value and cause direct harm. In that sense, they are much ‘worse’ than ‘shirkers’ and would be helping society by not working.
I’d agree with your statement if it had not been put in such a loaded way after 10 years of the most vile and destructive assault on our most vulnerable citizens. Interestingly, research shows that during the 80’s and early 90’s there was a great deal of compassion towards those on welfare. This changed after Blair (but it would have done anyway, I imagine) and as housing costs rose, it eroded the gap between the in work and unemployed creating resentment that was politically exploited taking the floodlights off the real, underlying rentier causes. The Tories exploited this expertly and, as you say, it went down like hot cakes.
To conclude: your remarks about it being ‘politically popular’ really buy into this manipulation of the concept of a ‘shirker.’ We know from history that the number of people refusing work is actually quite small. Unemployment was about 1% in the 1950’s and about 14% by 1982. It is a myth that there are millions of ‘shirkers’ out there and you would do well not to buy into ‘political popularity’ based on the ideological massaging of truth used as a decoy to channel discontent with other things.
“the word ‘shirker’ also implies that having a job automatically defines you as being a ‘contributor.”
Your contribution to society is the hours you put aside for other people. That’s a central and key point. It’s not how much you pay over to the Exchequer that matters, it’s what you put aside from your finite life for the benefit of others. That means the millionaire is no more valuable than the millworker.
Once again what people do and the hours they put in are separate concepts. Mixing the two together is a deeply “neoliberal” viewpoint. The key entwining that everybody is a self-employed business providing services they are responsible for choosing. Once they have a choice as to what to do, people can sort that out. Currently they don’t have that option.
And whether you like the “workers from shirkers” line or not, it will be used because it both alliterates beautifully and it explains a common situation and belief. And it is wildly popular with the people “researchers” tend not to bother talking to.
My personal view is that the number of shirkers will be a very round number – zero. Given the option to contribute, people will choose to contribute.
You can have purity or your can have power. Bill has shown the way towards the sort of political alliances that are required to get things implemented. It’s time to follow the leader.
We used to have a JG in the US but they did away with it. Remember the draft?
For once I find myself completely in agreement with Simon, and I’d like to register that (very congenial) fact.
Neil Wilson wrote (Thursday, July 30, 2020 at 22:38):-
“‘because without the bare means of sustenance they will starve to death’ (me)
“That would be their choice though wouldn’t it. What about personal responsibility. Do you not consider them to have agency and they need to be fed like chickens?
They have chosen that course of action. Just as surely as if they had chosen not to fill in a benefit application form”.
That outlook strikes me as being on a par for callousness with the mentality which in a previous era created the institution of the workhouse and to have quite a lot in common with it.
“My personal view is that the number of shirkers will be a very round number – zero”.
That comes as no surprise, seeing that the effect it is aimed at producing is – conveniently! – to enable the moral issue to be cavalierly swept aside whilst the logical bulldozer rolls remorselessly on crushing all ethical considerations in its path.
I’ve said before that to have recourse to charity as the social sticking-plaster so as to to be able to absolve oneself of displaying any possible vestige of empathy (whilst persistently decrying and deprecating it in every other context – for justifiable reasons IMO) is patently to apply a double standard and does not – as Neil appears to think it does – enable him to sidestep the moral issue. It won’t wash.
“And that is wildly popular politically – making it far more of a vote winner than “give money to everybody no matter how idle they are”
*really* gives the game away.
If that’s the kind of heartlessly-governed world anyone aspires to live in in the future they’re more than welcome to it so far as I’m concerned. The trouble is that I can’t see any essential *moral* superiority of a dystopia like that (with or without MMT) over the neoliberal one we have now. At least this one doesn’t kid itself that it occupies the moral high-ground.
Neil Wilson wrote:-
Thursday, July 30, 2020 at 22:36
“‘Which taken at face-value doesn’t appear to answer the question’ (me)
“It answers the question as much as I can answer it.”
Sorry to disagree but it doesn’t. The question was:-
“It only does so if one *takes as read* (in default of its being stated explicitly) that carers and single parents are to be classified automatically as JG employees by virtue of that status.
For the sake of clarity, is that what you meant?”
It wasn’t meant as a trap or a debating-point but just (as it says) to obtain a straight answer to a straight question. it seems reasonable to adduce from your “reply” that the answer is “yes”.
Fine. I have no issue with that. I just wanted to know, since you never actually said so in so many words (and still haven’t, but no matter).
“That comes as no surprise, seeing that the effect it is aimed at producing is – conveniently! – to enable the moral issue to be cavalierly swept aside whilst the logical bulldozer rolls remorselessly on crushing all ethical considerations in its path. ”
Very nicely put.
However, I must admit there is a part of me that wants to not reward non-contribution, as it is put. I am constantly fighting this yet I can understand why people think this way. My way through is to think about the “contribution” that society makes to people that has them want to drop out, as it were. Society is in part responsible for this. Things like basic unemployment benefits can be seen as a recognition of this factor. Rather than, in effect, punish people for the ills inflicted on them, in part, by society, society has to mitigate the factors which damage people’s lives.
@ Neil Wilson,
Neil, (or Bill?) could you kindly help me out here – I was under the impression that caring for (young?) children of your own, or your own elderly or disabled relatives, would “count” as a bona fide “job” under the JG, and stated so recently on a social media post.
This was challenged by another poster, whose opinion I usually respect, who said that that wasn’t the case, and that only working as a carer for *other* people’s relatives/children etc would count – due to the employment buffer function of the JG and the necessity for JG employment to be transitory (and auto-stabilising, by inferral).
Is this true?
It strikes me as odd that the JG would promote the caring of other people’s relatives whilst strangers care for ours, as a policy – although that’s what happens in childcare and elderly care once institutions are involved of course, but I felt it would seem more logical for each to look after their own, and if a salary was on offer to look after strangers, then why not one for caring for our own kith and kin?
Any advice from the horses’ mouths so to speak would be welcome, thank you!
Best, Mr S.
@ Tom Nugent,
We already have a JG of sorts in the UK too: the job involves logging on to a website for 37.5 hours and endlessly searching for employment that will a) guarantee you more than zero hour’s work per week, b) a salary that isn’t “on target”, commission-only earnings for selling some unsellable product or service, c) a position that doesn’t involve already having had years of experience operating some esoteric and highly specialised piece of equipment, or d) work that pays above the level where, if you took it, you’d be worse off than at present because the travel costs to the distant employers would mean that your net wages would be insufficient to feed, clothe, or heat yourself… and so on.
It’s known as being a “Jobseeker” and the “Jobseeker’s Allowance” pays the princely sum of £1.98 per hour – around a quarter of the national minimum wage.
If you don’t spend 37.5 hrs pw constantly undertaking this fruitless pursuit, you will have even this pittance taken away from you, often for weeks, months, or years – as well as the entitlement to housing and other benefits.
Now if the govt is prepared to pay £75pw to somebody to engage full-time in this grindingly useless and unproductive search, *surely* it would be far better off paying four times the amount to the poor sods stuck on this pointless merry-go-round to do something that’s actually socially useful, and far less brain-deadening, with their 37.5 hours of the week. Yet this madness continues….
Robert H, I think one way to consider the MMT Job Guarantee is as an economic policy proposal that is designed to influence economic outcomes, in perhaps a utilitarian way of thinking about outcomes. As such, it is an argument based on efficiency in the use of available resources and is not a moral argument as to how we should ethically treat other human beings. On the level Neil is talking, it is not necessarily an argument about our conceptions of ‘justice’, or human dignity, or what our ethical obligations to each other may be.
While economic considerations of the effects of policy are important- they should not be the arbiter of what is ‘wrong’ or what is ‘right’ in a moral sense. I would like to think that a powerful economic argument for torture would not change my opposition to torture as government policy in any way. But that doesn’t mean I would not welcome an economic argument against torture and be happy to use it where I could. And it happens that the MMT JG goes a long way towards what I consider to be ethical or ‘socially just’ economic policy. And I am happy to support it.
Bill Mitchell talks about our aspirations for our society guiding us in determining what levels of benefits and wages the Job Guarantee as an economic proposal would provide. Well that there opens the door for me and you to promote our aspirations for what we believe is right for our society- even though they may make the policy less ‘efficient’. Bill may analyze my ideas from an economic perspective and perhaps argue that they are not the most economically efficient way to do things- but that doesn’t mean they are the wrong thing to do or to aspire to. I don’t think Bill would claim otherwise.
Bill Mitchell writes – “I argue that this possession of a job is a crucial source of self-determination for the typical worker in a capitalist system and the core of regional community development.”
Isn’t this the central problem? I mean the presumption for, or acceptance of, a capitalist system in the first place. The entire system of capitalism must be dismantled and replaced by democratic socialism. Any goal less then that is simply accomodationist towards capitalism. We can now see very clearly that capitalism is completely unsustainable in both environmental and social terms.
I go to several “progressive” economic sites and they all attract lots of people who are still essentially supporters of, or accommodationists of, capitalism. This is the whole problem. Capitalism is unsustainable and CANNOT be lastingly reformed. It always reverts to form: the form of being exploitative and destructive of environment, ecology and human life.
Accommodating capitalism is unviable. it must be overthrown it its entirety. Pushing for a JG is fine. Any tactic positive for the poor and working is fine, so long as the long term goal is still the complete overthrow of capitalism.
After reading your piece I am not sure if you’re for’t or agin’ it.
Bill clearly thinks unemployment benefits should not go to people who don’t “contribute” to society. That’s his right to hold that opinion and it’s clear cut.
Every economic decision has a moral/ethical consequence. It’s fine to talk about economic efficiency (what ever that means in this context) but economic decisions and their moral/ethical impacts are inseparable.
On economic efficiency – are you saying it is more economically efficient to not pay benefits to the unemployed who are not willing to participate in a JGS?
From a strict microeconomic perspective, efficiency is defined at the point that an objective function is maximized relative to a constraint. The objective function is founded on preference functions, in the strict micro case, it is founded on private preference functions. There could be an economics that is founded on both private and social preference functions which might include value judgements about the unemployed not willing to participate in a JGS. The other component of the objective function is the costs associated with a particular economic process. The costs are normally private costs. Social costs such as the cost to society of dealing with people to the extent they are “damaged” by society, can also be included.
That’s a technical and long winded way of looking at efficiency. I’m sure the are many other ways of doing it.
Your argument about economic efficiency and how a policy regarding the JGS unwilling unemployed could also be seen as an economic torture, taking your analogy in another way.
If democratic socialism means social ownership of the means of production then I personally am against it. Personally I believe in individualism but balanced by social objectives and values.
I would agree that capitalism as it functions now is intolerable.
I can’t see socialization of the means of production occurring in western society just yet (Marx might be correct about the ineluctable progress of history by dialectical means, who knows). And the consequences of a violent overthrow of capitalism are too great to be contemplated.
Good Post. Don’t have the drive to research your positions on the JG. So there are some Progressives that think you right leaning? I know some people who don’t like the level of inequality and lack of opportunity and like Trump. I don’t understand how their minds work.
Bill, I absolutely hate it that your system now tells the world my real name.
I want to be Steve_American online.
#Henry Rech and Ikonoclast,
I was Steve_American. I retired to SE Asia, but still want to help Americans
One solution to solve the real problem that capitalism always has been able to come back is —
to add several amendments to the Constitution. Like —
1] All Federal elections shall be funded only with federal money.
2] The Federal Gov. shall have a Soc. Sec. system that supports retired people with dignity.
3] The Federal Gov. shall fund and let the states and local gov. run a Job Guarantee Program that pays a socially inclusive wage to every worker who wants such a job.
4] The House of Reps shall be elected from large districts with usually more than 1 Rep.. This is from 1 district for states with up to 11 Reps. And from districts with 6 to 9 Reps for larger states. In this case all districts shall have X or X+1 Reps.
5] There shall be 2 more Electors for President from each state or district that will vote for the candidate who got the most popular votes nationally, if the 2 top candidates got within !% of the votes of each other (were tied) then 1 of these Electors will vote for each of them.
And some others. This freezes in the rules to make the gov. be — “Of the people, by the people, and for the people.”
Dear Steve_American (at 2020/07/31 at 12:44 pm)
The change has nothing to do with anything I have done at my end.
How you fill out the form is your business – none of my settings influence your name on the comment form.
I have amended it this time for you from my end (editing the comment) but you need to think why this has changed at your end.
ps Your given E-mail address bounces.
” There shall be 2 more Electors for President from each state or district that will vote for the candidate who got the most popular votes nationally, if the 2 top candidates got within !% of the votes of each other (were tied) then 1 of these Electors will vote for each of them.”
Why persist with the stupid, in my mind, electoral college system? This demeans the notion of one vote, one value.
I cannot reconcile this with your “to make the gov. be – “Of the people, by the people, and for the people.””
I signed up somewhere with my real name and now it shows up here.
I see why the email bounces.
I added an ‘i’ to correct it for this post at least.
I’ll look closely in the future.
Henry, the Job Guarantee is one of the best ideas I have ever heard of. I’m all for it- just to clear that up for you.
But I might have a different view of what it means to ‘contribute’ to society than Bill or you do, and therefore have some differences in what criteria I would prefer to use to qualify for benefits. I would recognize that Bill as an economist might be in a position to evaluate the efficiencies of my preferences compared to his as to the stated economic goals of the MMT JG. I would not recognize that his aspirations for society are necessarily more worthy than my own aspirations.
“On economic efficiency – are you saying it is more economically efficient to not pay benefits to the unemployed who are not willing to participate in a JGS?” Depends on who’s aspirations for society are incorporated into the JG structure. A super stingy program might not have any willing participants. Doubt that would be any more efficient or different than current policy. A JG that set a wage floor above average wages probably faces the same inefficiencies as a UBI would according to MMT.
“Every economic decision has a moral/ethical consequence. It’s fine to talk about economic efficiency (what ever that means in this context) but economic decisions and their moral/ethical impacts are inseparable”. (Henry Rech)
That’s the nub.
“…are you saying it is more economically efficient to not pay benefits to the unemployed who are not willing to participate in a JGS?”
I was, firstly, just waffling on and pontificating about ways of looking at efficiency.
In fact, I was saying the reverse. If social values (such as we must look after people “damaged” by the way society works) are included in the objective function, the economic outcomes can be defined as efficient.
I think the unemployed not willing to join the JGS should be paid benefits but benefits sufficiently lower than those in the JGS scheme (otherwise I can’t see the JGS scheme working).
100% agree with you with a minor caveat. Kelton and others have said something like an UBI would be acceptable during the Covid pandemic while we don’t want people to work, but once it is safe to do so switching to a JG would be much better.
Neil Wilson says…
“.. “What happens to people who choose not to work. Is there some form of residual unemployment payment ?”
Why do you think a person choosing not to work, when they could, should allow them to use state power to forcibly transfer output from other people for nothing in return? … ”
Seriously, Neil, do you really think the UK state’s system of assessing disability – even physical disability, never mind mental disability – leaves no one falling thru’ the cracks in the system, or not subject to gross negligence of assessment?
After it has been assessed that over 100,000 people died prematurely, many from suicide, as a result of their UK disability reassessed and state payments cancelled?
I find your ignorance of this reality quite disgraceful and sociopathic, frankly.
Both you and Bill Mitchell dodge this vital question of what happens to those unable to work who fall thru’ the disability assessment cracks?
Well, right now, in UK, they are made homeless, starve and die, or stagger on with worsening mental and physical health. That is a fact. And we are talking 10s, even 100s of thousands of people.
That is why myself, with personal life experience in these areas (in mental health disability), and others, who, similarly, advocate that there must be a basic survival level *BI* (no, not a UBI) available to those who fall thru’ the cracks of what in most countries has become a privatised nightmare of inhuman neglect in caring for some of the most vulnerable citizens.
I understand that JG – work generally – because of its production value, must be incentivised with a decent minimum living income.
But a lower level of basic survival income can easily be provided for those who have no other options where by state assessment, or personal assessment, conditionality cannot be met, and the person can demonstrate no other source of income (or significant savings, meaning 10s of thousands).
The relative levels of JG and such a backstop BI can easily be refined such that JG is enthusiastically accessed by those who able to do it, and BI adequate for those that don’t.
Furthermore, you and Bill both ignore the political/social dynamics of coercing the most vulnerable into a JG program because it’s that or starve and become homeless.
The very fact that exists, opens the door wide open to abusive and low value, exploitative JG programs run by unscrupulous actors given local and national political cover, to ‘punish’ the ‘shirkers’, as right wing media will portray it.
I’m staggered that your approach depends entirely on the good will of JG provider institutions and individuals to provide quality JG work, when so much ill will toward the unemployed has been brain washed into people for so many decades.
I can tell you right now that if there is no effective choice but JG or starve/become homeless, the quality of JG programs will plummet and the whole concept lose vital participant and local community support, and it’s vital macro benefits degraded to a point of failure.
Just. Not. Good. Enough.
Way past time that you and Bill started listening to people (yes, like me) with direct personal experience on the receiving end of how society has dealt with the most vulnerable and unemployed, and get out of your privileged bubble mindset.
Stop merely responding to questions you haven’t been asked and finally answer this most most important one I’ve asked before which you have always ignored.
I agree with Newton Finn that this is the most significant line in the post “I don’t consider that the private ‘market’ is an arbiter of the values that a society should aspire to or maintain. That is where I differ significantly from my profession.”
Persuading enough other people in all walks of life to agree with the first sentence of the above quote is the key to a way forward. MMT is then one of the tools used to effectively implement the real world changes required by such a fundamental decision.
‘Society’ may be seen in terms of a contract between the individual and the rest of that society as represented by it’s governing authority and all the official bodies that form part of that authority. The individual agrees (with no real choice in the matter) to abide by all the laws laid down by the government and in return (in this theory at least) the government ensures that every individual can support themselves to some minimum standard of living without the need to break such laws. The original colonists of Australia were sent here by a government which was overrun with convicted ‘criminals’ as result of it’s abject failure to recognise it’s obligations under this contract.
Deciding exactly what a government needs to do in order to reasonably fulfill it’s side of the contract will be a never-ending argument but much might be achieved if those in power could be persuaded to think in this way. The JG ( plus whatever other benefits arguments such as those in earlier comments decide appropriate) would go a long way towards meeting the governments obligations and avoid ‘breach of contract’ riots.
Hi Neil, you replied to Derek: ‘”Over 55’s are (should be) provided for with a UBI” That’s not “Universal”. Can we just call it a Retirement Pension like we always used to?’
Yes, I agree the UBI moniker suggests paid to all adults regardless of age, but Derek clearly means just as a Retirement Payment. But differing from our (UK) current retirement pension, which apart from not starting until 65/66/67, is graduated, dependent on years of contributions and a healthy decent amount it isn’t. It could be argued that a Job Guarantee scheme would ensure that everyone fit for work contributed for the length of their working life, so that contributions wouldn’t be an issue. What also really needs to change is the idea that the disparity in income dependent on the private sector/class system value of jobs, should extend to post working life retirement pensions. The not fit for purpose private pensions industry propped up by the government clearly needs to be replaced over time by a retirement payment based on people as citizens with a right to a reasonable share of national wealth, who have contributed in their working life (by standard jobs or JG) or otherwise been exempted on health grounds. Another big issue that Derek alludes to, and which it seems to me that MMT work only indirectly addresses (with analysis of govt debt issue and need/no need for) is the continuance of the Fire (Finance, Insurance, Real Estate) sectors to capture so much of whatever inclusive income the workers and retirees have.
I’ve been wanting to comment on this post for a couple of days but have been pre-occupied with other things. Just before this post I had seen Steven Hail’s tweet which included this:
“40 k Australian Federal Job Guarantee
30 k (average) Income Support for those who can’t participate
20 k Basic Income for those who opt out.”
and had seen it discussed, I think on Facebook.
Before I saw Mike Hall’s comment just now I’d already decided that it is not acceptable to leave anyone to starve because they won’t accept a JG job. It is difficult for any of us to judge whether someone is lazy or just suffering mental distress. And as some else commented here, there would not be many who would accept the lower dole income – unless they were actually earning elsewhere.
Going back to Steve’s 3 categories, it is difficult to set a basic income as, from a UK perspective, whilst is possible to generalise on the cost of most basic necessities, e.g. food, clothing, fuel, it is impossible to do this for housing.
The thing that I find confusing, though, is this from Bill:
“7. They could choose whatever hours they desired to work – effectively eliminating time-based underemployment.”
What would be the situation if a country introduced JG and suddenly saw a massive influx of immigrants? Is JG reserved for citizens? Legal residents?
@ Mike Hall
Thank you for having the courage to write this. It should certainly resonate.
A case of the abstract countering reality, or as Mike Tyson eloquently explained, the perspective always changes when you get punched in the face.
People are dying unnecessarily and suffering unimaginably because we cannot connect the dots in the simplest manner. What hope is there when academia get tangled up in mere words?
If you want to stop the virus, cease all air traffic and unnecessary journeys. Maintain only essential services and keep activity to an absolute minimum.
Use the knowledge gained in the abstract – money and its utility – to support the populous, then change the objective, from personal gratification to the collective and maintain this place for our descendants to enjoy and explore. Job Guarantee? We have so much work to do cleaning up our mess – a ‘guarantee’ is fast becoming a totally redundant term. However many of us are left after Covid has its way – there is still all the pollution – the oxides, Fukushima, plastics and Chernobyl – to sort out. And governments like the UK want people to fly to Spain to have a holiday.
WHAT A FUCKING MESS.
And we worry about unemployment and who might be right about an economic policy and who said what and when. Mike is quite correct in his sentiments: there is far too much navel gazing going on to have any meaningful contribution in what is turning out to be a cataclysmic event. Many sadly have realised this already and are no more – not by chance or bad luck, but sheer inhumanity and negligence.
Contributors here have an important role to play – Bill, especially. As I write this, Jim Morrison and the Doors have just came on in random playing “Light My Fire”
Dear Mike (Hall)
I feel the rightful burning anger in your words at the deep and manifest injustice you and many others have suffered at the hands of our (UK) disability benefits assessment system. For me it is clearly the result of a series of viciously cruel decisions taken by governments which have deliberately and cynically chosen to inflict the unnecessary pain and suffering of public expenditure cuts most heavily on those who are least visible and least able to defend themselves. It should be reformed immediately.
However, I don’t think I have ever read or heard Bill or Neil advocating for a job guarantee scheme that would incorporate this type of assessment. I don’t think they are dodging the question but addressing different questions here. My interpretation of what I can remember hearing and reading of Bill’s work on job guarantee schemes is that he is usually very careful to say that those who can not work or are restricted in the amount and type of work they can do should be supported as of right to enjoy the same decent standard of living as those undertaking job guarantee work. Both Bill and Neil have expertise in macroeconomics (and other things, of course) but not necessarily in work capability assessment. Personally I think self declaration with free and appropriate medical advice might be the way to go and if useful productive work was available for all I would foresee the biggest difficulty with it would be trying to restrain those who need to refrain from work from doing too much.
Your central point if I’m reading you correctly would be that any job guarantee scheme has to be designed in such a way that it would be proofed against all potential injustice from those who might have a form of control over it. Unfortunately, I can’t see how this would ever be possible though that shouldn’t stop as many safeguards as possible being incorporated , working down from the widely acknowledged but too often ignored UN Declaration of Human Rights and into the detailed day to day administration of any job guarantee scheme. Ultimately as with all areas of life I feel the only real safeguard is the vigilance of the committed and preparedness to act by enough people to ward off the worst tendencies of the would be oppressors. Trade unions can help here, though I’m aware they themselves are not immune to unfairness and many types of discriminatory malpractice. I suppose I’d conclude that a job guarantee is no more or less amenable to being implemented in an unfair way than all other aspects of public policy.
Let’s hope that we in the UK will soon by some means end or at least make a meaningful reduction in the number and severity of the injustices the like of which you have suffered, the right to a decent living for everyone surely shouldn’t be in question.
All the best, John
For several hundred years now Anglo-Saxon economies have been dominated by market fundamentalist “Libertarians” in positions of power telling citizens the private sector alone self-equilibrates an economy. This is nothing more than a rape and pillage, law of the jungle mentality!
“The modern conservative is engaged in one of man’s oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness.”
― John Kenneth Galbraith
Mike Hall, your comment is a very welcome contribution. As you probably realise Australia has followed a similar path to the UK with the persecution of the unemployed and those that receive social support and also with following the rest of the neoliberal disaster. Hundreds of thousands of people have indeed died prematurely as a result of deliberate policy choices. I especially like your observation that an assured basic income for those unable to work and also for those that choose not to work sets a floor for the adequacy for a JG program. Given that our electorates continue to vote for sociopathic conservative and almost equally sociopathic pseudo social democratic/Labour centre right governments, it is therefore inevitable that even if a worthy JG were to be implemented that it would at some point be subject to the same sort of neoliberal restructuring we have come to expect. Our democracies have been hijacked by money, the partisan propaganda of the mainstream mass media and through ‘manufactured consent’ or social engineering by the wealthy elites. I can’t see much good happening until we can get round that problem with our democracies but for a time Jeremy Corbyn and Bernie Sanders almost broke through to start pushing back.
The violent overthrow of capitalism remains another path as Ikonoclast mentioned and certainly a few percent have earned their premature end but how can such a process not degenerate into a shambles especially when the collective minds of the populace have also degenerated? Good people will join various sides and slug it out and after the pits are filled the same imperfect easily manipulated people will remain and more than likely fuck things up all over again. Bill’s suggestion that education of the populace is the best path is probably right but even here is the ‘good’ side winning? At least the pressure for change is increasing as neoliberal capitalism degenerates and impending ecocide continues to be effectively ignored.
Simon Cohen your heartfelt comment struck home and I concur with your observations and conclusions. I also feel I wasted my potential in the current neoliberal world. In my case I simply made the mistake of taking a break from my engineering profession for a few years and then finding that no recruiters were willing to let me get a chance to get back in and my list of contacts was too meagre to help. Now over 20 years have passed and I work intermittently for less than the minimum wage as a rather slow but semi competent painter. My age has now cemented my fate and I’m not sure if I’ll financially or physically make it to the aged pension and still hold on to my home that incurs increasingly onerous local council rates. The fact that my previous industry of car manufacturing along with most of manufacturing was forced out of Australia by the neoliberal kleptocracy in recent decades also did not help.
“Both you and Bill Mitchell dodge this vital question of what happens to those unable to work who fall thru’ the disability assessment cracks?”
People with disabilities generally want to contribute as much as they can. The design of Job Guarantee I support allows them to do that. We should give as much support getting people into the workplace so they can continue as we do keeping them in normal schools.
However there will be people that cannot – both short and long term – and it has always been my position that that decision should be made by a medical doctor and nobody else. Both the individual and society deserve to have the case assessed and decided properly in a manner both can ultimately accept – even if they are not happy about the outcome. And there needs to be an appropriate appeals system as with any other quasi-judicial process.
“Saving money” on that process by outsourcing it to a clipboard operative on incentive pay is not acceptable. There is no need to “save money”. There is a need to do it properly.
All of this leads to the position I put forward: If you want the JG wage, you are required to contribute your labour hours to it unless exempted by age or infirmity.
Conscientious objection to spending your time for the benefit of others is not an infirmity.
That is all that will ever be excluded under a Job Guarantee to my design. Once you choose not to work, rather than being forced not to work, then you are choosing not to take part in that state scheme. Personal choice should be respected.
Who decided it is a crack? That is how the system has been designed. It has been voted upon. Therefore that is what the majority consider sufficient – whether you or I like it or not.
The problem is that the word “justice” now just means “getting my own way”. It just promotes eye-rolls outside the bubble and a crossing of the street to avoid.
People disagree. In this case the majority disagrees. As demonstrated by the election results.
A crack can be filled in with charity – for which people will get tax relief. That will demonstrate whether or not there is sufficient support for the additional tax necessary to fund the ‘crack’. Captain Tom raised nearly £33 million in voluntary taxation for the NHS – which helps demonstrate how underfunded it is relative to what people will stand. What’s the current charity total for the area concerned? If a reasonable amount cannot be raised as a voluntary tax to cover the issue, then a compulsory tax is unlikely to be acceptable to the majority either.
Whenever anybody demands a transfer, particularly of basic items, they are asking for a regressive tax imposition on everybody. An increase in National Insurance if you like. And it can’t be palmed off onto the “rich”. They don’t have the surplus of the type of goods and services that need to be confiscated and transferred.
It’s not what you want. It’s what sufficient others are prepared to accept. You have to look at things from their point of view.
What I am finding, in keeping with Matthew Goodwin’s current electoral grouping findings, which he highlighted again this week in Unherd, is that those who support volition and personal responsibility have no problem with the “if you can, you must contribute your hours or you don’t get paid” position. It’s a useful political marker to see if they are a person who really believes that hours are an individual’s contribution to society, or whether they are inevitably going to get sucked in the UBI supporters club where everybody is a victim of circumstance and has to be protected by “do gooders”.
The evidence is that, certainly in the UK, it is the volition and personal responsibility position that is currently electable.
“Our democracies have been hijacked by money, the partisan propaganda of the mainstream mass media and through ‘manufactured consent’ or social engineering by the wealthy elites.”
Thank you Andreas for this astute comment. This is essentially the crux of the matter. Individual governments that run a fiat currency may indeed have extraordinary powers – as MMT has demonstrated – our problem is that these powers have been misused for decades and explains the necessary function of the off-shore banking system enabling concealment and secrecy.
Simple human greed and the lust for power is the true enemy – and there are no shortage of willing foot-soldiers for that cause. But who are the generals? Qui Bono?
I recommend that you revisit “The Spider’s Web” – based on Nick Shaxon’s excellent book and consider the size of the dog in this fight. All the excellent proposals and suggestions contained in this blog will only work if this secret and nefarious network is completely dismantled. Until that happens, nothing will change.
If Bill permits, a link to the documentary:
@ Neil Wilson
“Conscientious objection to spending your time for the benefit of others is not an infirmity.
That is all that will ever be excluded under a Job Guarantee to my design”.
Then I repeat:- IMO your design stinks.
You refuse to allow-for the presence in any society of “outsiders”, oddballs, or other assorted harmless rebels against regimentation. Or for the fact that all of such assorted misfits and misanthropes – despite how reprehensible their behaviour, which you have appointed yourself to sit in judgment upon, you deem to be – are YOUR FELLOW HUMAN BEINGS. Or that their behaviour is not the outcome of some disability, amenable to clinical diagnosis by people in white coats and certifiable as some sort of malady, and for that reason qualifying them to be saved from starving.
This utilitarian reductionist philosophy seems to me chillingly inhumane. I suggest that if your proposal were to be implemented its effects would be downright tyrannical and likely to bring the whole (otherwise well-conceived) J.G. proposal into very bad odour indeed – deservedly.
If you want to go on propounding it regardless that’s your choice, but at least you’ll be doing so under no misapprehension as to how “your design” is viewed in some other quarters – discount those criticisms though you may.
It looks like any economic proposal that doesn’t solve every single problem humanity faces, and all at the same time, just ‘stinks’. Get back to the drawing board and let us know when your plan also cures cancer and every other affliction or injustice- eliminating involuntary unemployment is just not good enough to consider on its own. You will know your plan is good enough when not a single person can find anything to complain about. It had better fix the weather too. Lot of complaints about the weather.
“outsiders”, oddballs, or other assorted harmless rebels against regimentation
Such a cohort would be rather small, would probably reject any safety net placed under JG and would also reject you being their champion. Your posts betray a desire to find some argument, any argument against the JG.
Following the thread of your logic will see that strand become ever more slender.
“It looks like any economic proposal that doesn’t solve every single problem humanity faces, and all at the same time, just ‘stinks’. ”
Let’s kept it sensible. Robert is not talking about every problem humanity faces.
The point is that the JGS proposed by Bill and others excludes those unemployed not willing to participate in the JGS from collecting unemployment benefits. I personally think this too harsh. At the moment, in Australia at least, there would be a large number of people who are unemployed, who collect unemployment benefits, who under Bill’s scheme would cease to collect benefits. I can only imagine the further harm this will cause. To me this smacks of the kind of neoliberal mentality that the frequent polemics in this blog and comments rail against.
A couple of years ago the house next door was left untenanted pending redevelopment. In the hiatus the house was discovered by homeless people who occupied it. We would witness all sorts of comings and goings and doings. It was an education. In fact, our home was burgled by some of these people. I witnessed drug taking, people behaving badly, people living very rough. I can only wonder about why these people choose to live this way. I can’t imagine it’s all just about laziness. I believe society has a responsibility towards these people. They also have a responsibility for themselves but it seems for one (bad) reason or another they aren’t in a position to exercise it.
I don’t want to live in a society that discards these people and throws them on the scrap heap, because that is what would happen.
I think its probably better to compare two worlds/scenarios
1) the current system, including unemployment benefits
2) the current system, with unemployment benefits removed and replaced by a job guarantee
I think there will be less people that “fall through the cracks” and are marginalised by society in scenario 2 compared to society 1. Maybe it would still be a bad system, but it seems that it is better than scenario 1. I think this is Bill’s key point.
The other aspect is we generally don’t want to change too much all at once. Otherwise you can’t tell which policies worked and which ones failed. Everything is connected, and there is lots of feedback.
Also, I would think that using the “no crowding out” principle, wouldn’t some of the JG jobs be in places where the private sector doesn’t operate? This may be overlapping with the helping the people who are unable to work and have been “abandoned” by the private sector.
Another way I think of the difference is the JG should increase real output. The type of jobs that the JG uses will in part determine who gets the benefit of that increased output. For example, if JG jobs involve either aged care; caring for people with disabilities; or child care, then old people, people with disabilities, and children will benefit first, receiving increased services. One example of the benefit could be simply higher staff ratios, so each person receiving care gets more hours per day of attention.
I would think in terms of caring for family being in the JG, I could imagine something similar to how home schooling works. There would be rules and supervision needed from an external person, to ensure minimum standards are kept. A person would need to go through the administrative processes for a child care, caring for someone with a disability, or aged care job. For example it could be assessed that your family member could be cared for with 3 other people as “one full time JG job”. If you only care for your family member, then that is 25% of the JG job, so that your weekly wage would be 25% of the minimum wage. If you want the other 75% you need to care for 3 other people. Ratios like this already exist in these sectors already. Easy enough to adapt them I would think.
“It looks like any economic proposal that doesn’t solve every single problem humanity faces, and all at the same time, just ‘stinks'”. (jerry Brown)
Completely misses – or knowingly evades – my point. But never mind; I’m not going to repeat myself again.
“Your posts betray a desire to find some argument, any argument against the JG”. (Mute)
I’m puzzled how you can read that into what I wrote.
I completely support the JG, and have said so quite a few times.
I must be expressing myself very badly, or else you’re seeing something that isn’t there.
They must have had the wrong Bill Mitchell in mind:
William ‘Billy’ Mitchell was a crusader who had the vision to understand the potential of air power long before his contemporaries. The name Billy Mitchell brings different images to mind. To most, he was a hero, without whose dire warning the United States might never have been able to field the world’s largest air force in time to fight …
Also, I believe that a gov who’s tax policy has created more unemployed than it desires to employ has a responsibility to either employ them or transition them to the private sector employment.
@ vote for pedro
I agree with you on the whole.
“Maybe it would still be a bad system, but it seems that it is better than scenario 1”
– though I agree it would be better, you won’t be surprised if I say that IMO it would still be very seriously deficient. I think it’s clear that there’s no middle ground between my position (and it’s by no means only mine) and Neil’s – which is the one at issue here and which he is sticking to.
So be it. I don’t expect the sky will fall in.
“Also, I believe that a gov who’s tax policy has created more unemployed than it desires to employ has a responsibility to either employ them or transition them to the private sector employment.”
What about the long term unemployed and the “unemployables” – what to do with them?
I think it is safe to assume that the overwhelming majority of the unemployed and underemployed would like a decent job. A significant proportion of these people are seen as ‘damaged goods’ by employers after years or decades of being out of the workforce and a JG would provide a great opportunity for jobs within the JG to be found that suit the individual, for tailored training to be provided as well as social support when needed.
A modest unemployment benefit for those that choose not to work or to join the JG and a social pension for those unable to work even in a JG, would serve a different purpose to the JG and should not prevent the JG from working effectively as a price anchor to control inflation. If too many choose the unemployment benefit then it may need to be lowered or the JG improved.
In the postwar period unemployment was around 1 to 2% and even assuming that decades of neoliberalism has increased the numbers that now would refuse to work, the numbers that would choose to live on an unemployment benefit rather than a JG would be relatively affordable for the state and likely to reduce over time if a well managed JG was in place.
We have bigger rorters in our economies such as the FIRE sector or major defence contractors. For example Australia’s superannuation fund managers charge management fees of over $40 billion p.a. which is a huge drain on the wealth of Australia’s citizens. Many times the current cost of the unemployment benefit.
I think Steven Hail’s $20k/$30k/$40k income scale for unemployment benefit/social support pension/JG is workable and should at least warrant detailed debate by our high power MMT academics that we are lucky enough to have participate in this blog.
Mark Russell thanks for the Youtube video link I will check it out soon. 🙂
“A modest unemployment benefit for those that choose not to work or to join the JG and a social pension for those unable to work even in a JG, would serve a different purpose to the JG and should not prevent the JG from working effectively as a price anchor to control inflation”. (Andreas Bimba)
Very well put. That’s precisely my position too – only better expressed :-\
(@Mute: Are you paying attention and, if you are, are you understanding what you’re actually reading?).
Dear Andreas Bimba (at 2020/08/04 at 1:05 pm)
One cannot derive support for a UBI from the principles that define Modern Monetary Theory (MMT). None of the MMT economists support a UBI because it is antithetical to our inflation analysis and the role of employment buffers.
There are people who want to be associated with our work but then espouse options that cannot reasonably be supported by our work.
They are free to propose any policy hybrid they like, but they should not then try to represent it as being part of MMT. It is not.
“…if useful productive work was available for all I would foresee the biggest difficulty with it would be trying to restrain those who need to refrain from work from doing too much. ”
I used to work alongside a colleague who suffered from MS. He was increasingly frustrated that his worsening condition meant that he could do less and less as each year passed – to the point where he had no choice but to give up work entirely.
Being forced to survive on the measly benefits that replaced his previously adequate income was extremely difficult, and, together with the loss of purpose and status, led to a state of depression, far beyond that brought about by having the illness itself. He desperately wanted to be able to continue working, but simply no longer had the physical strength or stability, concentration, predictable or regular periods of time outside unforeseen medical appointments or severe relapses, nor the energy, to be able to do so.
This was all unfolding around the time of Osborne’s austerity drive, and his disgustingly divisive, lazy, ill-informed, and completely disingenuous, “strivers vs. skivers” campaign, and, to me, was a perfect example of how and why it was so dishonest and egregious a narrative.
Thanks very much Bill for your thoughts.
How should JG administators sanction those that refuse to work/contribute effectively after all reasonable efforts to bring them around have been exhausted? Any relevant link?
I accept that an unemployment benefit for those that refuse to work would be a political choice and is not MMT.
Your article above clarifies a number of matters for me about the JG. But on thing I am still unclear about is whether the minimum wage (and other conditions which I assume would reflect the minimum national standards) would be fixed by the government or some other body, or whether it would be subject to increases through enterprise bargaining or other means.
If it is subject to enterprise bargaining increases then I do not see how it can remain as employment of last resort/buffer stock concept. On the other hand, if it is not subject to EB increases but is fixed then it is really a welfare payment albeit set at or just below the private sector minimum wage. In this case, it seems public sector unions are loath to support it because they fear existing jobs will be contracted out by councils or to JG workers. Jobs they have struggled to have recognised as ‘real jobs’ will be either lost or will be more difficult to improve.
Your views please? Thank you.
Dear Peter Holding (at 2020/09/29 at 10:25 am)
I followed up with this blog post (September 16, 2020) – How would Job Guarantee wages be set?