Tuesday, August 11, 2015

Jobs Guarantee vs. Work Time Reduction

Max Sawicky says Matt Bruenig is wrong about the Job Guarantee idea. Sandwichman wrote about this back in 2009, so I'm reposting a condensed and edited version of it here and will add further reflections on Max's and Matt's points.


Would a Minsky-inspired "job guarantee program" be an economically feasible response to that jobs crisis? Randal Wray is probably the best-known current advocate of such a program. In August 2009, Wray posted a brief description of the idea along with some references for further reading. 

The Sandwichman's familiarity with the debate around the job guarantee idea comes largely from a discussion in Robert LaJeunesse's book, Work Time Regulation as Sustainable Full Employment Strategy, in which LaJeunesse sought to show why work time regulation would be superior to a jobs guarantee.

LaJeunesse's main objection to the job guarantee idea is that it expands work and consumption instead of questioning the compulsion for and ecological sustainability of perpetual, artificially-induced economic growth. Peter Victor's book, Managing without Growth, and the Sustainable Development Commission's report, Prosperity without Growth?, give persuasive evidence in support of such criticism.

While the Sandwichman agrees wholeheartedly with LaJeunesse's ecological critique, he also has microeconomic concerns about job guarantees. There are three aspects that particularly trouble me.

First is the historical precedent that explicitly "make work" jobs have always carried a stigma. This was true of the 19th century workhouse in Britain and of WPA jobs during the Great Depression.

Second, the necessity for some kind of administrative overhead -- managers, planners and staff -- must necessarily lead to the creation of a bureaucratic empire whose denizens will have a stake in the continuation and expansion of their institutional niche.

Finally, a job is not simply about the exchange of a certain amount of time and effort for a paycheck. Some kind of learning and social interaction goes on in the workplace. Not all of it is directly tied to the work. What kind of informal culture of "lifers" and "transients" is likely to emerge in the "buffer world" of guaranteed jobs? What's to prevent the lifers (as well as the administrators) from devising schemes to divert the efforts of enrollees to their private interests?


Matt argues that Guarantee Jobs are inclined to be "low-capital, short-term jobs that are not that important to do." He suggests it would be preferable to establish targeted public works programs, "which can be ramped up and down cyclically as needed," which, of course, was precisely the idea behind the Public Works Administration established during the Roosevelt New Deal.

Max argues that an Employment of Last Resort (ELR) program could be designed that complies with Matt's targeted public works program. He thinks that "Matt’s notion of how an ELR system could work is too narrow."

Sandwichman thinks the discussion could be better informed by attention to 1. what happened, in the long run, to the New Deal public works program and 2. what are the alternatives to a job creation program -- especially a a work-sharing program and permanent reductions in the hours work, what John Maynard Keynes called the "ultimate solution" for unemployment.
"...the full employment policy by means of investment is only one particular application of an intellectual theorem. You can produce the result just as well by consuming more or working less. Personally I regard the investment policy as first aid. In U.S. it almost certainly will not do the trick. Less work is the ultimate solution (a 35 hour week in U.S. would do the trick now)."

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