Neil Wilson-en eta Bill Mitchell-en iruzkinak, lan bermea dela eta

Sarrera gisa, ikus Zergak eta DTM


(i) Immigrazioaz

N. Wilson-en iruzkinak (In Bill Mitchell-en Video of my public lecture in Helsinki, February 27, 2018 (

Neil Wilson says:

Saturday, March 10, 2018 at 2:57

Immigration is a political question.

The Beveridge condition is that there is always more work than people that want it in all local areas. That suits the ‘somewheres’ who like to live in a place. In this political set up the work goes to the people, or the work doesn’t get done.

Neoliberalism believes that there should fewer jobs than people and that people should be factors of production, moving from place to place in search of their next ‘gig’. People follow the work and everybody must be part of a travelling circus. That appeals to middle class liberals who, trained for the professions, wander from job to job. It’s also the life of your average academic. These are the ‘anywheres’ – intellectual travellers – networked to each other, not to a place and its people. It is the Norman Tebbit “On your bike” attitude. And it is the one currently adopted by the UK Labour party.

Net immigration is not required. Japan bumbles along quite happily with net zero migration – increasing GDP per head via automation and innovation.

So we have a political choice. Are we in hock to capital and people move to where the capital wants them. Or do we serve the people and move the capital where the people are.

The Job Guarantee makes the work go where the people are, and serves the ‘somewheres’. That makes them content and increases their capacity to handle the ‘anywheres’ that move amongst them. The political challenge is to get the anywheres to realise that they ‘crowd surf’ on the shoulders of the ‘somewheres’.


Neil Wilson says:

Saturday, March 10, 2018 at 4:40

I’d make one further point on immigration. One nation’s immigration is another nation’s brain drain. The brain drain to London has hardly helped places like Rochdale. Those effects don’t stop at country boundaries.

How is taking medical professionals from third world countries where they have endemic rickets a progressive act? It isn’t. It is pure imperialism and colonial appropriation. The hypocrisy of a set of people crying ‘freedom’ when really they want cheap servants is sickening. Let them, instead, go to the source nations and correct the political problems there.

Fix Greece rather than championing the forced transportation of Greeks.


(ii) Lan bermea, ez dago beste aukerarik

Neil Wilson says:

Sunday, March 11, 2018 at 6:04

There are other alternatives and other agendas that a MMTer could support.”

There isn’t Andre. If you do not support the Job Guarantee, then you are just a pump priming Keynesian that will cause a wage price spiral and collapse just like in the 1970s.

In other words that approach has been tried and has already failed – leading to Monetarism and neoliberalism.

Mark Blyth calls this the ‘bug’ in Keynesian thinking. The Job Guarantee fixes the bug – and it is the only thing that will do – because it is automatic, instant and spatial in nature. It is an automatic stabiliser that stabilises the monetary circuit *and* the real circuit – leading to price stability *and* full employment.

Bill has been very clear about the centrality of the Job Guarantee

The reality is that the JG is a central aspect of MMT because it is much more than a job creation program. It is an essential aspect of the MMT framework for full employment and price stability.”

Every generation that discovers MMT seems to think they can do without the Job Guarantee for some reason. Quite why that is I don’t know.

(iii) Inflazioa dela eta

Neil Wilson says:

Sunday, March 11, 2018 at 6:17

I don’t agree with Neil on the necessity of having taxes high enough to have a JG pool operating everywhere. That it be substantial over the whole country should be enough.”

If you exhaust the buffer you cause inflation. Given the relative immobility of labour how is the anchor going to work when you have run out of people in a location that has several competing businesses chasing the labour? Instead you get a wage price spiral which then starts to leak out.

The mechanism by which the Job Guarantee constrains wages is that at the lower end there is always somebody on the Job Guarantee a private sector firm could hire instead of you if you ask for a pay increase.

Eta orain Bill Mitchell-ek:

(iv) Bi akats

bill says:

Sunday, March 11, 2018 at 10:20

Dear All (and Some Guy at 2018/03/11 at 3:37 am)

The following interchange contained two errors:

Well, MMT was a term invented by Bill Mitchell
No, I believe it was invented by a blog commenter, at Warren Mosler’s site IIRC.

The term Job Guarantee to describe public employment creation initiatives goes back a long way and was not ‘invented’ by me nor a blog commentator on Warren’s WWW site.

The resurrection and inclusion of the term in the MMT literature does indeed relate to my work.

When we started to develop what has become known as Modern Monetary Theory (MMT) around 1994 and 1995, my US MMT colleagues (Warren, Randy, Stephanie etc) used the term Employer of Last Resort (ELR) whereas I originally called the concept – which I developed in my Honours year at University (1978) – the Buffer Stock Employment (BSE) framework. The BSE terminology followed directly from the concept of buffer stocks of employment being used to stabilise the price and exhaust the quantity supplied (that is, create full employment).

Early on in MMT history, the two terms were interchangeable. I used BSE, the US colleagues used ELR.

Two things happened. First, I objected to the use of the term ELR because it was derived from the central bank’s capacity as Lender of Last Resort and I considered applying a term that was about the provision of inanimate reserves to human labour was not appropriate.

Second, Britain experienced the outbreak of mad cow disease (Bovine spongiform encephalopathy or BSE) in 1996, which rendered my BSE acronym somewhat dubious.

There was some usage (by Randy for example) of the term Public Employment policy, but I decided to use replace the BSE terminology with the Job Guarantee terminology and I started using that language in public presentations and academic papers from then on.

After a while, we (the original MMT team) all agreed either formally or implicitly to unify the terminology as so it became Job Guarantee – late 1990s. The Americans still occasionally lapse back into ELR but rarely these days.

I hope that helps.

best wishes



(v) DTM eta lan bermea

bill says:

Sunday, March 11, 2018 at 12:35

Dear André (at 2018/03/11 at 11:24 pm)

You are welcome to call anything whatever you like whether there is an existing body of knowledge that calls it something else or not. But that won’t change things much.

Neil Wilson is correct that what the founders of MMT (including myself) have deemed to be the body of theory and practice they advocate includes the concept of an employment buffer stock as an integral component.

As Neil says it ‘fixes the bug’ that the Phillips curve opens up for conventional ‘Keynesian’ (heterodox) theory. You demand to know “Who says so?”. I say so. That has been the core of my work in this area of research and theoretical development for decades. The Job Guarantee solves the ‘missing equation’ problem of macroeconomics and is core to what we call MMT. It is one of the things that separates MMT from other Post Keynesian macroeconomic approaches.

As Neil noted “Every generation that discovers MMT seems to think they can do without the Job Guarantee for some reason.”

Over the 14 years I have been writing a blog and thus presenting my academic work in a more accessible format, this discussion has recycled several times. It has led to some people who in their rush of enthusiasm claim to be devoted MMTers then denouncing the approach a few weeks later once they realise what the body of work involves.

Then the cycle turns as more people ‘discover’ our work.

As I said, you can call something MMT as you see fit. But without the Job Guarantee stability framework embedded, what you think is MMT is not the genuine article.

best wishes



Neil Willson-ek berriz:

(vi) Lan bermea denboraz ari da

Neil Wilson says:

Sunday, March 11, 2018 at 18:15

the thing about a Jobs Guarantee is you have to show up for work and at least put in the time.”

Probably unexpectedly you’ve stumbled across the key point of the system. In crypto-currency terms the Job Guarantee is a ‘proof of burn’ system. You have to give up permanently some of your finite lifespan and in return you will be issued with some currency so you have access to the output of somebody else’s finite lifespan.

It’s putting your own time out of use for yourself that is the key sacrifice required so others will accept that you have contributed as they have.

The Job Guarantee: it’s about time.

Iruzkinak (2)

  • joseba

    Bill Mitchell-en Now people pay to work for free
    We now pay to work for free!
    The interview was motivated by a report in the Fairax press yesterday (March 13, 2018) – Companies defend charging $1000 for unpaid internships – which documented how:
    Students and graduates are forking out $1000 to undertake unpaid internships with a one in 64 success rate of picking up a full-time job and which don’t even take place at the company’s office.
    … the firms involved insist they are simply providing the training universities have failed to deliver to prepare technology, business and engineering graduates for the real working world.
    This has been a creeping neoliberal disease over the last few decades.
    When there are enough jobs to meet the desires for work of the labour force (vacancies outstripping underutilised workers), firms had to take responsibility for the development of job-specific skills within their workplaces.
    This was the full employment era.
    It was when educational institutions educated – by which I mean, developed critical thinking skills, decision-making skills, and a general awareness of literature – which was meant to prepare people to function and contribute to a sophisticated society.
    Vocational training, inasmuch as it was delivered outside the paid-work environment, was developed within technical colleges.
    There was a clear distinction between education and training.
    It was also understood that the lower productivity of workers during their training period would be matched by a lower wage than they would receive once their period of indenture was completed.
    As the neoliberal grip has tightened, the distinction between education and training has become blurred and universities have become compromised into offering more vocational type courses.
    Corporate pressure on governments and educational authorities has seen increased contamination of educational courses with material designed purely to advance private profit rather than provide general education.
    We now have the absurd situation where university curriculum requires compulsory unpaid work in corporations as part of the educational programs.
    The latest iteration of this creeping disease is that corporations now are charging students for the chance to work for free in the name of ‘work experience’.
    We now have ridiculous situations where universities have taken on vocational training of say nurses, which were formally trained within the hospital system, and the public health authorities demanding universities pay for job placements as part of the work experience requirements in these courses.
    The shift of nursing into universities was reasonable in that it redressed some of the inequities in authority structures between doctors and nurses (the latter now also having university degrees) but has opened the students to abuse in the form of unpaid work and other demands from prospective employers.
    It is clear from the research evidence that this new era of ‘unpaid work’ does not lead to superior outcomes for the students once they graduate and enter the workforce in a more permanent way.
    The so-called internships are nothing more than free labour for profit-seeking corporations and others who should be paying workers who work within their firms.
    Alarmingly, the trade union movement has barely blinked at this creeping disease.
    But with over 15 per cent of the available workforce underutilised (either unemployed or underemployed) the balance of power is firmly in the hands of the employer and they can cost-shift all their training responsibilities to the publicly-funded education system and demand payments from young prospective workers desperate for a foothold into a future job.
    This cost-shifting has also undermined the quality of our educational systems.
    The solution is to ensure government policy creates very tight labour markets (full employment), which will force the training responsibilities back on to the employers.
    The problem is that current government policy deliberately creates this massive wastage of labour and desperation among our youth.

  • joseba

    Lan bermeko kritikariak
    Bill Mitchell-en Critics of the Job Guarantee miss the mark badly … again
    My blog post last week – On the path to MMT becoming mainstream (April 17, 2018) – discussed the way in which the language and concepts that have been developed by the Modern Monetary Theory (MMT) authors are now permeating mainstream narratives and the media. While this has increased the pushback and hostility from both the Right and Left opposition to MMT, it is also a sign that the public understanding of the way in which the monetary system works and the policy options available to currency-issuing governments, is improving. Most recently, there is been a flurry in the US media discussing employment guarantees, which is a welcome relief from the previous saturation coverage of impoverished UBI ideas. It is fabulous, that at the policy level, the idea that the state can eliminate mass (involuntary) unemployment if it so chooses is becoming more acceptable. That’s down, in part, to the great work being done there by my MMT colleagues. There are also derivative public sector job creation proposals getting ‘airplay’ which I do not consider to be MMT-inspired nor are what I would call Job Guarantee initiatives, but which are still, to their credit, raising awareness of the need for the state to ensure there are sufficient jobs for all rather than dispatch citizens who are unable to find work to the unemployment queue. The push back is increasing and that is a sign that dissonance is being felt by the neoliberals who oppose the state taking responsibility for mass unemployment and using its fiscal capacity to render it a thing of the past. Many of the critics from the Left do not have the courage to come out and say they prefer the alternative to a Job Guarantee, which is entrenched unemployment. That leaves them carping away with no legs to stand on. The Right objections are venal as they always are – they want mass unemployment to persist to dampen wages growth and allow more real income to be captured by the top-end-of-town.
    Before we get into the specific topic of today’s blog post, I note that various social media discussions still don’t quite grasp the idea that the Job Guarantee is a specific and intrinsic element of Modern Monetary Theory (MMT) rather than a policy choice that might reflect progressive Left values.
    I have explained this point several times in detail, here are two blog posts (among others) for you to reflect upon if you’re uncertain as to what I meant in the last paragraph:
    1. Whatever – its either employment or unemployment buffer stocks (December 30, 2011).
    2. MMT is biased towards anti-crony (December 28, 2011).
    The point is that in macroeconomics we care about ‘efficiency’, which means that wasted productive resources that are willing and able to be deployed (referring obviously to labour resources but it generalises to all productive resources) are being used to advance societal well-being within a context of sustainability of the natural environment.
    That also means that macro stability is important, which includes a goal of price stability. In other words, full employment and price stability are key macroeconomic goals, and a body of theory must seek to outline an achievable path for both, by understanding how the economic and monetary system operates and the policy choices available to the government within that system.
    As I explained in the blog post – Modern monetary theory and inflation – Part 1 (July 7, 2010), to achieve price stability in a fiat currency monetary system there are only two options available to government, and both involve the use of buffer stocks:
    Unemployment buffer stocks: Under a mainstream NAIRU regime (the current orthodoxy), inflation is controlled using tight monetary and fiscal policy, which leads to a buffer stock of unemployment. This is a very costly and unreliable target for policy makers to pursue as a means for inflation proofing.
    Employment buffer stocks: The government exploits the fiscal power embodied in a fiat-currency issuing national government to introduce full employment based on an employment buffer stock approach. The Job Guarantee (JG) model which is central to Modern Monetary Theory (MMT) is an example of an employment buffer stock policy approach.
    Given the massive costs involved (see below) in the use of the first buffer stock option (mass unemployment), the only efficient option for government is the use of a Job Guarantee.
    There really is no alternative in this context.
    Full employment requires that there are enough jobs created in the economy to absorb the available labour supply. Focusing on some politically acceptable (though perhaps high) unemployment rate is incompatible with sustained full employment.
    The other point of clarification (hinted at in the Introduction), which I will expand on in a future blog post, is what I see as the difference between a Job Guarantee as developed by the original MMT authors (Mosler, Wray, Forstater, Fullwiler, Tcherneva, Kelton and myself) and various derivatives of that idea that had been proposed in more recent times.
    The Job Guarantee is a very specific concept that constitutes a macroeconomic stability framework. It cannot merely be seen as a national job creation program nor does it apply to any localised subsidised public job initiatives (trials, pilots etc).
    To suggest that some of the recent employment creation proposals that have been marketed under the moniker of a ‘jobs guarantee’ program are MMT-inspired is like saying that if you put wings on a Ford Fiesta you get a Mustang. I’ll write more about that another day.
    Further, the MMT Job Guarantee also has nothing in common with so-called ‘workfare’ or ‘work-for-the-dole’ programs that neoliberal-inspired governments have introduced as compliance initiatives in some misguided attempt to force the income support recipients to ‘earn’ their pitiful benefit allowances.
    Some of the cheap push back tries to dismiss the Job Guarantee as ‘workfare’ because they know that carries a negative connotation. In doing so, they disclose their ignorance and their lack of knowledge of the vast literature we have created, some of which has addressed that exact criticism more than two decades ago.
    I know that some readers think it is unreasonable when I urge them to read widely before making assertions about what I write in my blog posts.
    But for a journalist engaging in commentary and opinion rather than news reporting, there should be no other option – they are holding themselves out as experts, qualified to pass comment (judgement), and as such should be familiar with the literature and attribute ideas and concepts correctly.
    They don’t, which usually ends up creating confusion among their readership and half-witted responses via social media about complex ideas.
    And then the whole discussion gets lost in a haze of ignorance.
    A recent example is the article on Vox (April 24, 2018) – Job guarantees, explained – by one Dylan Matthews, who asks the question “Would it work?”.
    A point of relevance is to ask him exactly what “IT” is?
    It is easy to invoke a concept, set up a straw person, and debunk the latter then suggest that defeats the former.
    You will also note that Matthews talks about “Job guarantees” rather than a Job Guarantee. In my view, there is only one Job Guarantee in the literature and that is the framework developed by the original MMT authors. Note my comments above.
    But there are a plethora of employment creation proposals which come under the more general group heading of ‘job guarantees’.
    In the article cited above, this distinction is implied but not elaborated on. Matthews concentrates on non-MMT employment creation suggestions that are abroad in the American debate at present and gives scant attention to the development of a Job Guarantee within the MMT literature.
    He ignores that literature except for a cursory reference to the excellent work by my MMT colleague Pavlina Tcherneva.
    And most of the critical references he cites are not relevant to the Job Guarantee framework. They also have questionable relevance to any employment guarantee proposal in that they dredge up the usual suspects – where would the jobs come from, when they compete with the private sector, wouldn’t they just be unproductive resource wastage, who would get the jobs, et cetera.
    All of these issues have been addressed by MMT authors over the last 25 odd years.
    As an example, Matthews cited a paper published in July 2015 by the Forschungsinstitut
    zur Zukunft der Arbeit (Institute for the Study of Labour) in Bonn – What Works? A Meta Analysis of Recent Active Labor Market Program Evaluations – written by David Card, Jochen Kluve and Andrea Weber.
    I suspect he hasn’t fully read the paper or understood its method and limitations. He clearly doesn’t understand that is says nothing of interest about the Job Guarantee proposal or any other employment proposal that guarantees on-going work to workers.
    The Vox article chose to summarise the Card paper in this way:
    Berkeley economist David Card recently conducted a meta-analysis of more than 200 evaluations of programs meant to boost labor markets, along with fellow economists Jochen Kluve and Andrea Weber. While they found a variety of impacts of different programs, one constant was that public employment programs that simply hired people directly performed worst.
    Which is not a conclusion that anyone who actually read the paper by Card et al, would draw and certainly the quality of the research in that cited paper was not subjected to any scrutiny by Matthews.
    He chooses just to be passive mouthpiece, which doesn’t do him any credit at all.
    A Meta-analysis derives its results from existing research – it is like throwing all the extant research into a melting pot and generating a “common truth”.
    The technique is not without serious problems including bias in the selection of the studies to be concluded, addressing data differences including incompleteness, and so-called publication bias.
    Further, if the original studies are flawed, the meta-analysis cannot fix that. In an attempt to overcome that limitation, researchers delete studies they think might be problematic. But that introduces selection bias – which a ‘skilled’ researcher can maximise to their advantage without disclosing the extent of the bias.
    The publication bias problem is acute. If one relies only on studies that have been ‘published’, the editorial bias of the relevant journals is also inherited.
    In economics, it is nearly impossible to get published in the so-called ‘top’ journals if you are, for example, a heterodox economist.
    I once attended a seminar where the then editor of one of these ‘leading’ journals (noting that the ranking system is self-referential and ‘cooked’ anyway) said he undertakes his duties by weeding out 90 per cent or more of submissions received using simple word scans before the rest are sent out to peer review.
    Further, I discussed in this blog post – Bank of England Groupthink exposed (January 8, 2015) – how Olivier Blanchard (who at the time was the chief economist at the IMF) wrote in his August 2008 article – The State of Macro – that research articles in macroeconomics now:
    … look very similar to each other in structure, and very different from the way they did thirty years ago …
    He said that they now follow “strict, haiku-like, rules”.
    Graduate students are trained to follow these ‘haiku-like’ rules, that govern an economics paper’s chance of publication success.
    So if an article submission does not conform to this haiku-like structure it has a significantly diminished chance of publication.
    So we get a formulaic approach to publications in macroeconomics that goes like this:
    Assert without foundation – so-called micro-foundations – rationality, maximisation, RATEX.
    Cannot deal with real world people so deal with one infinitely-lived agent!
    Assert efficient, competitive markets as optimality benchmark.
    Write some trivial mathematical equations and solve.
    Policy shock ‘solution’ to ‘prove’ fiscal policy ineffective (Ricardian equivalence) and austerity is good. Perhaps allow some short-run stimulus effect.
    Get some data – realise poor fit – add some ad hoc lags (price stickiness etc) to improve ‘fit’ but end up with identical long-term results.
    Maintain pretense that micro-foundations are intact – after all it is the only claim to intellectual authority.
    Publish articles that reinforce starting assumptions.
    Knowledge quotient – ZERO – GIGO.
    This is why the publication bias problem is significant.
    Further, in my field (economics) one can never really get a publication if the research only produces ‘negative’ results. That is, the researcher fails to find anything. I believe this is a common problem in other disciplines as well.
    I won’t go into the specific statistical issues that arise from truncating the sample of information that is used and ignoring a vast body of research that never reaches journal publication stage (such as doctoral studies, conference papers etc).
    The Card meta-analysis attempt to address this issue is, in my view, unconvincing.
    There are a host of other issues involved in using meta-analysis, so I would never confidently cite them as an authority without first understanding exactly what the authors did.
    In the Card et al. approach they also only focus on:
    … studies that measure the impact of a program on the probability of employment …
    This narrows the field considerably and assumes that the purpose of the employment creation programs were to increase that outcome rather than to provide on-going employment itself.
    The literature also typically narrows the outcome down to the “probability of employment” with a private employer. So if that transition likelihood is found to be low, the program is deemed a failure because it fails the ‘market’ test.
    This is a version of the ‘make work’ criticism of employment guarantees – which goes that unless the work is making profit for some capitalist or another it must be worthless and unproductive.
    I considered that issues in this blog post (among others) – Boondoggling and leaf-raking … (April 22, 2009).
    The evaluation paper published in the OECD Economic Studies (2000) – What works among active labour market policies by John P. Martin, who is an economist at the OECD, is instructive in this regard.
    Martin notes that
    … “outcomes”, in the evaluation literature, are invariably expressed in terms of programme impacts on future earnings and/or re-employment prospects of participants … There is little or no evidence available on potential social benefits which could flow from programme participation such as reduced crime, less drug abuse or better health.
    This is an important point because we know that apart from income loss, unemployment (particularly for extended periods) is associated with the pathologies mentioned in the quote.
    Over the years we have done considerable research in that area and I reported some of that in these blog posts (among others):
    1. The daily losses from unemployment (January 13, 2010).
    2. The costs of unemployment – again (January 13, 2012).
    While the daily losses in income alone are enormous, it is also well documented that sustained unemployment imposes significant economic, personal and social costs that include:
    loss of current output;
    social exclusion and the loss of freedom;
    skill loss;
    psychological harm;
    ill health and reduced life expectancy;
    loss of motivation;
    the undermining of human relations and family life;
    racial and gender inequality; and
    loss of social values and responsibility.
    These costs are also enormous and dwarf the measures that various governments have come up with to estimate losses arising from so-called microeconomic inefficiencies (such as transport systems not running on time etc).
    They also ensure that the losses extend beyond the current generation. Children growing up in jobless families inherit the disadvantages of their parents and perpetuate the cycle of disadvantage.
    So to just focus on whether a specific program increases the transition probability of an unemployed person into private employment (no matter what wage, conditions, tenure is offered in that private job) is hardly a basis for concluding that a Job Guarantee would fail.
    From where I sit, if a Job Guarantee provides stable income (a socially-inclusive living wage and non-wage benefits such as child care, access to training and education, health care etc) to a severely disadvantaged citizen who cannot find work elsewhere, and if, that person increases their self esteem and is healthier, more engaged with society and can better care for their families, then it is a huge success.
    Even if that person stays in that Job Guarantee position for ever and no private employer would ever take them on.
    Huge success.
    That sort of ‘successful’ outcome is denied (excluded) in the Card meta-analysis.
    So when they conclude that:
    Public sector employment subsidies tend to have negligible or even negative impacts at all horizons.
    They are not saying anything meaningful about a Job Guarantee, which by definition creates stable jobs with socially-inclusive wages for anyone who cannot find a job elsewhere.
    Further, readers should note also that the sample of programs included in the Card meta-analysis was “restricted … to time-limited programs, eliminating open-ended entitlements”.
    So the sort of programs they are considering might include a job creation initiative that offers subsidised wages for a 3-month time period but terminates after that.
    Accordingly, their results have little application to an MMT-inspired Job Guarantee which is unconditional and open-ended.
    Further, their study can say nothing about any employment guarantee program (MMT-inspired or not) that is not time-limited.
    Further, the sample created by the Card meta-study has very few public sector job programs – they said these programs “were relatively rare in all county (sic) groups”, which means there is probably insufficient variance in the original estimates of variables associated with these programs to get accurate estimates anyway.
    Of their conclusions, I have this to say:
    1. They conclude that “public sector programs” perform poorly because “private employers place little value on the experiences gained in a public sector program — perhaps because many of these programs have little or no skill-building component, and only serve to slow down the transition of participants to unsubsidized jobs”.
    This conclusion is irrelevant to a Job Guarantee.
    Even if it was true that in times of stronger activity the private employers choose to lose market share by shunning Job Guarantee workers, the Job Guarantee workers will still enjoy stable incomes that allow for a socially-inclusive life to be led.
    Their children will still learn to value work and not inherit the disadvantage that would have arisen if their parent(s) remained long-term unemployed.
    And the rest of it.
    The reality is that it is highly unlikely that private employers would be prepared to lose market share in this way as economic activity was boosted.
    They can afford to be choosy during recession. But when they are enjoying higher levels of demand for goods and services, a firm that engages in such discrimination, will just lose their sales to a competitor.
    The evidence is very powerful. During the full employment era, when unfilled vacancies ran ahead of available workers, firms would structure their job offers to take even the most unskilled workers – offering them training and assistance to ensure they were capable of performing the tasks required.
    They did that because otherwise they would have sacrificed profits.
    2. “public sector employment programs appear to be relatively ineffective at all time horizons” – the term ineffective is not applicable to a Job Guarantee which aims to unconditionally provide stable employment with a living wage.
    Whether this improves a participant’s chances of getting a private sector job is irrelevant. The point is that the operation of the Job Guarantee, by definition, creates successful outcomes.
    And if the private sector are in need of labour then they just have to offer wages and conditions that are better than what the Job Guarantee worker is enjoying to attract the labour from the program pool.
    As above, if the private sector employers don’t want to do that, then in times of growing economic activity, all they will do is sacrifice profits. Unlikely.
    3. Card et al. also find that all programs “work better in recessionary markets” but they are unable to determine why. This is a well-known problem of these types of studies.
    John P. Martin (cited above) notes that:
    This literature is bedevilled by a number of data and technical difficulties, notably simultaneity bias since cross-country comparisons reveal that the amount of spending on active programmes is positively related to the unemployment rate.
    In other words, it is impossible to decompose the cyclical effects from the underlying impacts of the programs being compared.
    Readers might also be interested in the excellent historical analysis – Lessons from the New Deal Public Employment Programs (October 1, 2009) – by US academic Nancy Rose.
    I had the pleasure of hosting a visit by Nancy Rose to Newcastle some years ago.
    She has been a long-time advocate of job creation programs and a critic of Workfare type programs. She is not what I would consider to be an MMT-er.
    Her research confirms that evidence from the Great Depression show that:
    … it is possible to implement expansive and creative public employment programs …
    Further, she notes that criticisms such as “inefficiency and unnecessary ‘make-work’ … workers … substituted for normal government employees, payments … too high, and the entire program … too expensive and riddled with graft and corruption” are always invoked by critics who just oppose public sector intervention per se.
    These critics have worked to dissuade governments from introducing public sector employment creation:
    This absence has been bolstered by the now commonly accepted “wisdom” of several decades of conservative, neoliberal ideology, which argues that as much economic activity as possible should be left in the hands of the private sector.
    The neoliberal era has pushed the line that:
    … government is … inefficient simply because it does not operate on profit criteria — the lack of a profit motive automatically leads to inefficiency. This contrasts to the private sector, which does base decisions on profits.
    This is related to the use of private sector employability as a measure of success for public sector job programs, even though that goal may be subsidiary or irrelevant to the aim of improving general welfare.
    In other words, efficiency is far broader than a concept that maximises private profits.
    And that is not to mention the obvious fact that the private sector is not the exemplar of efficiency anyway, even when defined in the narrow way mainstream economists might choose.
    The GFC confirms that if you ever doubted it.
    Further, the legacy of many of the Depression projects in the US and Australia (the Great Ocean Road, for example) demonstrate how productive this sort of work can be if designed and implemented properly.
    The importance of designing projects appropriately is emphasised in the study published in the October 2000 edition of the Monthly Labor Review by Melvin M. Brodsky from the US Bureau of Labor Statistics – Public-service employment programs in selected OECD countries.
    He provided a very detailed analysis of experiences with public service employment programs.
    He argues that notwithstanding the criticisms of such programs, public sector job creation:
    … may be the only effective way to aid those among the long-term unemployed who are less skilled and less well educated.
    Brodsky emphasises the following design features that improve the effectiveness of such programs:
    1. “flexibility” – this is why the Job Guarantee can be tailored to be inclusive to any form of disadvantage including mental and physical disabilities.
    2. “more targeted to local needs” – the Job Guarantee is funded nationally but implemented locally to ensure that the voice of local communities is instrumental in generating the types of jobs that address unmet community and environmental need.
    3. “better linked to other labor market services” – the Job Guarantee would incorporate assistance for disadvantage.
    For example, in a study we did for the NSW Mental Health Department we created designs that allowed for clinical support for youth with psychosis to be embedded in the job design. No private employer would allow this degree of flexibility – which means that cohort would be precluded from jobs where they might be very useful if they had the chance to access clinical support when needed (on an episodic basis).
    The Job Guarantee embeds training ladders into the guaranteed job such that if a person desires to develop their skills beyond the current level they can.
    The Job Guarantee would be accompanied by child care services, health care services to ensure needs beyond the narrow workplace issues can be addressed.
    In other words, the Job Guarantee would incorporate many of the features of ‘labour market programs’ that the Card meta-study felt were important, in addition to providing a stable job with a socially inclusive wage.
    In 2008, our research team published a comprehensive report after a 3-year study – Creating effective local labour markets: a new framework for regional employment policy – we built on those design features to produce a comprehensive operational plan for the implementing of a Job Guarantee.
    The problem with journalists like Dylan Matthews is that they are not experts yet they hold themselves out to be authorities on topics they write about.
    While David Card and his team do solid work, the particular research study that Matthews cited as criticism of the latest array of employment guarantee proposals in the US misses the mark significantly.
    By definition, a Job Guarantee would succeed in terms of its aims – to provide a stable job at a socially-inclusive wage to those who cannot find work elsewhere.
    That offer is unconditional and not time-limited or supply-constrained. Most past public service job creation initiatives are supply-constrained (a given fiscal allocation is made which limits scope and duration).
    The Job Guarantee is not of that type. It is demand-driven – as many workers as desire work will be hired. They can stay as long as they like. They can make it a career if they choose.
    Whether it enhances private sector employability is not the aim so studies that assess programs solely in terms of that aim are irrelevant.
    Matthews clearly does not get that and so spuriously quotes studies that have no application to the topic he is writing about.
    To close, I don’t normally agree with much that conservative politicians say but this statement during an Interview with Michael Rowland on ABC New Breakfast (April 20, 2018 7:05), by the Australian Federal Minister for the Environment and Energy is what everyone on the Left should learn to repeat when they start surrendering to ideas that the nation state is powerless (it is at the 1:42 minute mark):
    The Parliament is always sovereign so legislation can be changed.
    Got it! The state retains power and we just have to reclaim it for progressive outcomes.
    See my latest book with Thomas Fazi for more – Reclaiming the State: A Progressive Vision of Sovereignty for a Post-Neoliberal World (Pluto Books, 2017)

Utzi erantzuna

Zure e-posta helbidea ez da argitaratuko. Beharrezko eremuak * markatuta daude