Bernie Sanders proposes Job Guarantee

KyussB

The Job Guarantee is a policy I've discussed and advocated here in the past going back more than half a decade, it is the principal policy proposal of the Modern Monetary Theory (MMT) school of economists (Stephanie Kelton is a leading MMT economist who works with Sanders) and honestly I never expected it to enter the mainstream anytime in the next decade or so:

• Sen. Bernie Sanders will introduce a plan to guarantee every American a job paying $15 an hour, according to a new report.
• The plan comes after two other Democratic senators, Cory Booker and Kirsten Gillibrand, also backed job guarantee proposals.
• Advocates for the plan say it will fight inequality and dampen recession, while opponents say it is an inefficient use of government resources.

Sen. Bernie Sanders will roll out a plan to guarantee every American a job, according to a new report.
The Washington Post's Jeff Stein reported Monday that Sanders's plan will guarantee every person a job with $15 an hour in pay. The jobs would be generated by public investments in projects ranging from the construction of new infrastructure to education.
According to The Post, Sanders' plan would create 12 districts within the US that would approve jobs plans from municipalities, states, and American Indian tribal governments and then pass those plans along to the Labor Department for final approval.
The plan would also utilize job training centers to train and connect workers with jobs on the new projects.
...

http://uk.businessinsider.com/bernie-sanders-job-guarantee-plan-2018-4

This branch of economics is, lets say...'controversial'...it's led me to a ton of grief here tbh. It's very nice to see it getting this kind of legitimacy.

What the Job Guarantee is, is a policy aimed at providing Full Employment, close to 100% of the time - particularly during economic recessions - and it aims to do this, by hiring people into temporary employment and training, in various public jobs programs (depending on the types of useful public work that need doing, e.g. infrastructural development or whatnot), and paid at the minimum wage so as not to compete with private sector wages.

It's not just a simple jobs program though, it is aimed at being an overarching macroeconomic policy, for controlling inflation: In todays system, inflation is fought by economic contractions which push people from the private sector into unemployment - in the Job Guarantee system, inflation is fought by economic contractions which push people from the private sector into lower-paid work in the job guarantee program, instead.

It's been a while since I've researched on and described this policy in detail to others (and I likely won't have a lot of time to get into too much detail, but will try answer any questions) - it's complicated by requiring that people have a bit more of an understanding about macroeconomics, than is typical - and by the fact that it runs counter to conventional (false) assumptions about macroeconomics - but there's a more detailed description, here:
https://en.wikipedia.org/wiki/Job_guarantee

wes

Any kind of trials done on this? Would make sense to try a small scale trial first, to see how well it would work.

KyussB

Basically any kind of temporary or small scale local authority employment, has small scale similarities - but the main feature of this, is that it's done on a countrywide-scale - i.e. the purpose of this policy is its macroeconomic effects, so small-scale tests don't cut it (similar to how small-scale Basic Income tests, bear little resemblance macroeconomically, to what a Universal Basic Income would be like).

The New Deal employment programs, are an example of what the Job Guarantee will be like - and at a macroeconomic scale. The difference here, is that it will now become permanent policy to use such programs for employing people who can't find work in the private sector.

wes

Certainly an interesting idea. Not sure how feasible it would be, but having said that, the current system has more than its fair share of problems. Will be interesting to see if Bernie gets anywhere with it.

Zubeneschamali

Some analysis on what kind of jobs programmes work best.

The answer: training the long-term unemployed.

KyussB

That analysis doesn't consider a Job Guarantee. The question is, what is the best way to get people working: Guaranteeing them a job (and training to get it) is, by definition, superior to all other options studied there.

Zubeneschamali

KyussB wrote: »

That analysis doesn't consider a Job Guarantee. The question is, what is the best way to get people working: Guaranteeing them a job (and training to get it) is, by definition, superior to all other options studied there.

That would come under Public Sector Employment in the analysis, and is shown to have a negative short term effect, and an even bigger negative long term effect.

Mind you, the commentator says: For what it’s worth, the sample size for direct public employment programs is modest, and the sample size for those operated over the long term is very small. This means that the large deterioration seen in these programs over the long term might be overstated.

KyussB

No it doesn't, small scale Public Sector Employment is not a Job Guarantee. You're comparing a policy with zero macroeconomic effects, to a policy which is defined by its major macroeconomic effects.

If you guarantee people a job, the short, medium and long-term effect is Full Employment, close to 100% of the time - better than anything else in that study.

Tabnabs

Sanders's jobs guarantee would fund hundreds of projects throughout the United States aimed at addressing priorities such as infrastructure, care giving, the environment, education and other goals. Under the job guarantee, every American would be entitled to a job under one of these projects or receive job training to be able to do so, according to an early draft of the proposal.

Where does the money come from? Who pays the wages, who pays for the mass employment projects?

The US national debt currently runs to over $21 trillion dollars. How much more debt do you propose they take on?

KyussB

It's not the size of a countries national debt that is the problem, it's the interest rate on that debt - as that determines how expensive the debt is. High Private Debt levels are more worrying than high Public Debt levels (Private Debt vs GDP is actually the more important figure, despite rarely being talked about) - the US can afford to take on as much public debt as it desires.

Since a Job Guarantee directly boosts GDP as well, and reflates the private sector when there is an economic downturn, it pays for itself pretty much - because in the long term, it boosts the GDP portion of 'Public Debt vs GDP'.

Having a bit of slack with Public Debt, in order to keep your countries GDP level at or close to maximum output, is almost always a good thing - and will maintain stable Public Debt vs GDP levels over time, in the medium/long term.

KyussB

Here's a good takedown of the earlier study regarding short-term public job programs, and how it is inapplicable to the Job Guarantee - also goes into a lot of other details about common Job Guarantee criticisms (though the author can tend to write excessively - still it's packed with good info on the Job Guarantee):
http://bilbo.economicoutlook.net/blog/?p=39198

The author - Bill Mitchell - is one of the core people who came up with the entire concept of the Job Guarantee - and is one of its leading proponents. The entire idea began with him and a small handful of similarly minded economists.

Dohnjoe

Bit skeptical on this. What would be the rules on firing under-performing employees?

jimmycrackcorm

Dohnjoe wrote:

Bit skeptical on this. What would be the rules on firing under-performing employees?

I'd guess that it isn't a mandatory program and the same rules would apply as any other job. Perhaps a more efficient version of our CES schemes.

Dohnjoe

jimmycrackcorm wrote: »

I'd guess that it isn't a mandatory program and the same rules would apply as any other job. Perhaps a more efficient version of our CES schemes.

Possibly

I remember Bernies plan for breaking up the big banks years back. One journalist asked him for the details, he couldn't provide them, and hasn't provided anything since

I get the feeling we may be waiting a long time to hear details on this one also

And the US? come on, maybe a trial in Finland, but not a large country that struggles with the concept of universal healthcare. Real cloud cuckoo land stuff.

KyussB

Yes, the country that implemented the New Deal - the basic template that the Job Guarantee expands upon to create a permanent macroeconomic policy - is a terrible place to implement this...

Tabnabs

The New Deal was an attempt to dig America out of the Great Depression. America is currently running at near full employment and welfare is at historic low levels. Kind of begs the question of why this new programme would be needed?

KyussB

It's a permanent New Deal - it's not a one-off program to dig out of an economic crisis - it's needed for all economic crises into the future.

Dohnjoe

KyussB wrote: »

Yes, the country that implemented the New Deal - the basic template that the Job Guarantee expands upon to create a permanent macroeconomic policy - is a terrible place to implement this...

I wouldn't hold my breath

PeadarCo

KyussB wrote:

It's a permanent New Deal - it's not a one-off program to dig out of an economic crisis - it's needed for all economic crises into the future.

So if you keep borrowing money and investing it in jobs it will solve all economic problems.

Ireland tried that in the mid 00s. Large amounts of money was borrowed and put into building houses and increasing public sector way and government welfare programs. We had a massive crash. And grand you can in the long run there was no problems (current numbers employed are reaching/are near precrash levels. But for anyone who suffered in the intervening period it's of little consolidation. Remember in the long run we are all dead.

Jim2007

You are not comparing like with like here.  The US provides very little direct support for the unemployed beyond a certain number of weeks.  Sanders proposal is in reality an attempt to extend that support beyond that period in a form that would be acceptable to US voters.  And of course it would be acceptable to the unemployed since they have no other choice.
By contrast in Europe we have a system which provides some kind of income support for the unemployed without requiring them to perform any additional activities.  So to introduce such a scheme over here, would require people to do something in order to obtain what was free in the past = not a vote getter and not going to fly.

EdgeCase

I'm very sceptical about this as it's effectively what's done in southern Europe to tackle joblessness - the state tries to create jobs.

You've several basic models of social support in Europe and some work better than others.

1. Big spend social welfare system coupled with high job security and a lot of labour inflexibility - France. Great if you have a job. Terrible if you're starting out.

2. Big spend social welfare supports coupled with low job security but very high levels of support services to get you back into a new job. This tends to be more the Finnish and Scandinavian approach and it works very well.

3. Poor social supports and low job security - UK Tory philosophy predominantly and Ireland to some degree. The US is the extreme version of this model.

4. High job security and heavy state intervention in jobs market coupled with very low social welfare supports. Historically was tried in Ireland and even France pre 60s and is still very much the backdrop of the problems in Spain, Greece etc

You end up creating "busy work". It's a philosophy that says that the most important thing is everyone has a job not that everyone is working in a job that generates the maximum output and quality of life. It's often driven by dogma about work ethics and it's generally not been very successful.

I would suspect the model you will would end up with ij the states could be dystopian cheap labour and abuse. Sanders would want to be very very careful about attempting to introduce that philosophy into a country that has very agressive neoliberal economics and very hardcore attitudes about work ethic that look more like Victorian England.

You could end up creating an underclass of state paid for, low wage workers.

Look a how well similar schemes like Job Bridge worked here...

My view of it is you need to look at it from the point of view of quality of life and wealth generation across the whole society. Creating opportunities for people to do things that play to their strengths and generate real economic value is very important.

Shoehorning people into busy work for the sake of a notion of a work ethic isn't necessarily making best use of the resources available.

We should be aiming to work less to achieve more. If you want to create a really competitive and smart economy, you need flexibility for people to find their way into new and better jobs all the time. It's about having the infrastructure to allow the labour market to evolve and allow people to do new things.

Ireland has some of that but it's not as strategic as it is somewhere like Finland.

I just think Sanders idea is well intended but I would be very worried about how that would pan out when you throw in the US right wing ideologies that would inevitably be a big part of how it's implemented.

KyussB

If someone thinks the Irish Government borrowed tons of money to build houses during the crisis, then they have a very dodgy (as in, fundamentally wrong) recollection of the crisis.

Can people please compare like with like - and not make nonsense comparisons, like conflating private sector spending with government spending?

It's very easy to create a straw man - a completely incomparable situation, put in the Job Guarantee's place - and knock that down. It doesn't deal with the Job Guarantee, though - so it's a bit of a waste of my time replying to that.

KyussB

Jim2007 wrote: »

You are not comparing like with like here. The US provides very little direct support for the unemployed beyond a certain number of weeks. Sanders proposal is in reality an attempt to extend that support beyond that period in a form that would be acceptable to US voters. And of course it would be acceptable to the unemployed since they have no other choice.
By contrast in Europe we have a system which provides some kind of income support for the unemployed without requiring them to perform any additional activities. So to introduce such a scheme over here, would require people to do something in order to obtain what was free in the past = not a vote getter and not going to fly.

People don't refuse jobs just because there's the dole - there's enough proof of that. So the claim that this is a no-go because people could get the dole for free, isn't sound. This isn't work for dole - this is something else entirely.

KyussB

EdgeCase wrote: »

I'm very sceptical about this as it's effectively what's done in southern Europe to tackle joblessness - the state tries to create jobs.

You've several basic models of social support in Europe and some work better than others.

1. Big spend social welfare system coupled with high job security and a lot of labour inflexibility - France. Great if you have a job. Terrible if you're starting out.

2. Big spend social welfare supports coupled with low job security but very high levels of support services to get you back into a new job. This tends to be more the Finnish and Scandinavian approach and it works very well.

3. Poor social supports and low job security - UK Tory philosophy predominantly and Ireland to some degree. The US is the extreme version of this model.

4. High job security and heavy state intervention in jobs market coupled with very low social welfare supports. Historically was tried in Ireland and even France pre 60s and is still very much the backdrop of the problems in Spain, Greece etc

You end up creating "busy work". It's a philosophy that says that the most important thing is everyone has a job not that everyone is working in a job that generates the maximum output and quality of life. It's often driven by dogma about work ethics and it's generally not been very successful.

I would suspect the model you will would end up with ij the states could be dystopian cheap labour and abuse. Sanders would want to be very very careful about attempting to introduce that philosophy into a country that has very agressive neoliberal economics and very hardcore attitudes about work ethic that look more like Victorian England.

You could end up creating an underclass of state paid for, low wage workers.

Look a how well similar schemes like Job Bridge worked here...

My view of it is you need to look at it from the point of view of quality of life and wealth generation across the whole society. Creating opportunities for people to do things that play to their strengths and generate real economic value is very important.

Shoehorning people into busy work for the sake of a notion of a work ethic isn't necessarily making best use of the resources available.

We should be aiming to work less to achieve more. If you want to create a really competitive and smart economy, you need flexibility for people to find their way into new and better jobs all the time. It's about having the infrastructure to allow the labour market to evolve and allow people to do new things.

Ireland has some of that but it's not as strategic as it is somewhere like Finland.

I just think Sanders idea is well intended but I would be very worried about how that would pan out when you throw in the US right wing ideologies that would inevitably be a big part of how it's implemented.

This is not any of 1-4 - it is temporary job program work, with training if needed, and the level of job security is a few years, depending on the type of job you're doing.

The aim is for the job program itself to reflate the private sector, at a macroeconomic scale - not merely push workers back into the private sector - and for workers to be hired out of the job program and into private sector work, through demand for labour.

Our major infrastructural needs, for one, don't sound like 'busy work' to me - do they to you?

Your argument there relies on the claim that there is no useful work to be done? When there is an enormous amount of useful work that does imminently need doing? (pretty much endless, when it comes to infrastructural improvements)

Sanders is guaranteeing a Living Wage, so I don't see how this could approach cheap labour - Job Bridge and internships in general, are just ridiculous imo.

A Job Guarantee can be incredibly flexible with the type of work it can offer (remember: government funded work doesn't have to be profit generating, so you can afford to prioritize social benefit) - so you can quite readily tailor the program to suit peoples strengths, and provide fulfilling work to them.

Think more of how to make it work to suit those aims - rather than assuming that it would take the form of something that goes against those aims.

You're not wrong about the threat that right wing ideologues could pose to the project - of hijacking it from its core aims, and turning it into something else entirely - those are valid concerns, but judge the idea on its intent, you know? On how it would function without being hijacked - and then we can judge how likely it is to be hijacked as a separate line of argument.

EdgeCase

Major infrastructural needs aren't going to be met by people who aren't qualified to build major infrastructure. There's a finite availability of those skills, and they are usually in high demand.

The problem with this is that you have to find work for people to meet the guarantees. If the economy doesn't generate that, you then have someone in some position of authority trying to figure out stuff for people to do to meet the job guarantee requirement. That's where you get into it being busy work and could create a big risk of underemployment.

Also, I would almost 100% guarantee if this were rolled out in the US, the right wing dogmatists would have it morphed into a 21st century version of the victorian house model in no time.

You absolutely need strong social supports for people to take opportunities, adapt, change and up skill and strong protections if they lose their jobs, but I think when you start to get into state direction of the economy, rather than facilitation of the economy, you start to create the strong possibility of a mess.

Rolling something like this out in the US at present would be impossible anyway due to ideologies and I think if you did you would almost certainly end up with something very unpleasant. Either a situation where people were being state funded to work in major corporations, effectively giving them free employees. Or, it could end up being morphed into something more like a 21st century version of the victorian workhouse concept, if the right wingers really got their hands on it.

Also, Trump has been whipping up hysteria about high unemployment. There is record low unemployment in the US at the moment and it was very low when he took office. I'm not really seeing the need for a scheme like this.

What I do see in the US is a whole load of poverty traps where people can't get the skillsets they need to get better jobs, largely due to very limited / non existent funding of education beyond high school.

KyussB

It's a jobs and training program. If those skills are of finite availability and in high demand, that's exactly what you want the Job Guarantee training-up craploads of people for.

Do you see a lack of useful infrastructural work needing to be done? The Job Guarantee doesn't wait for the private economy to create a demand for particular work - it creates that work itself and directly employs people into it - because (being government funded) it isn't limited by a private, profit-based market economy - and that means all the major infrastructure that can boost GDP and private profits, yet which is itself unprofitable for private industry to undertake, can be undertaken as part of the Job Guarantee.

Really - your entire argument of busywork, rests on the concept of there being no useful work to do. How do you explain the gigantic amount of useful work that needs to be done, then?

If you're arguing that right-wing types will hijack it and turn it into something akin to slave labour - then make clear that that's a separate argument, so it can be debated on its own merits/demerits - as you're mixing it up with the rest of your arguments.

When you start doing that, you're not arguing against the Job Guarantee anymore - you're arguing against an imagined right-wing hijacking of it - which isn't very useful, as that's not what I'm advocating.

Jim2007

KyussB wrote: »

Jim2007 wrote: »

You are not comparing like with like here.  The US provides very little direct support for the unemployed beyond a certain number of weeks.  Sanders proposal is in reality an attempt to extend that support beyond that period in a form that would be acceptable to US voters.  And of course it would be acceptable to the unemployed since they have no other choice.
By contrast in Europe we have a system which provides some kind of income support for the unemployed without requiring them to perform any additional activities.  So to introduce such a scheme over here, would require people to do something in order to obtain what was free in the past = not a vote getter and not going to fly.

People don't refuse jobs just because there's the dole - there's enough proof of that. So the claim that this is a no-go because people could get the dole for free, isn't sound. This isn't work for dole - this is something else entirely.

It is exactly that and that is how it will be seen.  And that is why it has not really support in the main steam.

KyussB

The entire idea is shit-hot right now, and has already reached unstoppable momentum as it breaks into the mainstream. It already IS mainstream, now.

The polls done so far show that the idea is incredibly popular on a bipartisan basis - every single state in the US has majority support for it - the lowest being 57%:

We find that the job guarantee polls stunningly well in all 50 states. Even in the state with the lowest modeled support, Utah, support is still 57 percent. Deep-red states like West Virginia (62 percent support), Indiana (61 percent), and Kansas (67 percent) all boast strong support for a job guarantee. Indeed, the places where the job guarantee is most popular might be surprising: DC (84 percent), Mississippi (72 percent), North Carolina (72 percent), Hawaii (72 percent), and Georgia (71 percent) have the highest estimates, though support is also high in solid-blue states like California and New York (both 71 percent).
Map depicting support for jobs guarantee across US states

https://www.thenation.com/article/why-democrats-should-embrace-a-federal-jobs-guarantee/

It's here - permanently - and it's not going away. I reckon myself, that pretty soon it's going to become the defining policy of the Left.

Dohnjoe

KyussB wrote: »

People don't refuse jobs just because there's the dole - there's enough proof of that.

BBC ran an experiment on this. Yes, there are people who choose social welfare over working (obviously it's just a portion of people) Anecdotally I know and have known several who took the social over working.

Dohnjoe

KyussB wrote: »

The entire idea is shit-hot right now, and has already reached unstoppable momentum as it breaks into the mainstream. It already IS mainstream, now.

The polls done so far show that the idea is incredibly popular on a bipartisan basis - every single state in the US has majority support for it - the lowest being 57%:


It's here - permanently - and it's not going away. I reckon myself, that pretty soon it's going to become the defining policy of the Left.

Fairly interesting results, well framed question too. Haven't seen any critical analysis of it, but definitely surprised at those results. The 5% tax on the over 200k earners seems fair if the program can withstand critical scrutiny

markodaly

KyussB wrote: »

Really - your entire argument of busywork, rests on the concept of there being no useful work to do. How do you explain the gigantic amount of useful work that needs to be done, then?

Like?