MTM klase borrokarik gabe, kontabilitate hutsa da

Modern Monetary Theory Without Class Struggle is Just Accounting

(https://realprogressives.org/modern-monetary-theory-without-class-struggle-is-just-accounting/)

June 11, 2025

Steven D. Grumbine

The left’s economic education has long suffered from two fatal deficiencies: the austerity myths of mainstream economics and the commodity-money fetishism of orthodox Marxism. As Pavlina Tcherneva demonstrates in The Case for a Job Guarantee (2020), the ruling class deliberately maintains unemployment as a disciplinary tool to suppress wages and worker power – concrete evidence that “scarcity” is a political construct rather than economic necessity. Meanwhile, because Marx’s critique of political economy (Capital, Vol. 1, 1867) remains foundational, many socialists have misapplied his labor theory of value by conflating money with commodity exchange, ignoring the modern reality of state-created fiat currency. This theoretical confusion has paralyzed revolutionary potential. 

The capitalist state’s monetary sovereignty – thoroughly explained by Stephanie Kelton in The Deficit Myth (2020) – reveals austerity to be nothing more than class warfare. Currency-issuing governments face real physical resource constraints, not financial ones (Mitchell, Wray & Watts, Macroeconomics, 2019). When politicians claim we “can’t afford” universal healthcare while rubber-stamping trillion-dollar military budgets, they’re not making accounting errors but enforcing class priorities through what Wynne Godley’s sectoral balance approach (Seven Unsustainable Processes, 1999) proves mathematically: the government deficit equals the non-government surplus. The so-called “national debt” is simply the financial reflection of real resources transferred to the ruling class. 

Even among Marxists who correctly reject electoral illusions, dangerous economic misunderstandings persist. Inflation phobias on the left frequently ignore Godley’s fundamental insight that price stability depends on maintaining balance between real output and demand, not abstract money supply. When the Chilean oligarchy deliberately manufactured shortages to overthrow Allende, they confirmed Marx’s famous dictum that “the executive of the modern state is but a committee for managing the common affairs of the whole bourgeoisie” (Communist Manifesto, 1848). Randy Wray’s Modern Money Theory (2015, 2024) clarifies that fiat money derives its value from state authority to impose and collect taxes, not from any commodity backing – yet some socialists still advocate for gold-standard thinking or labor vouchers, retreating into utopianism rather than seizing the existing monetary system. 

The Job Guarantee (JG) proposals developed by Tcherneva and Mitchell & Muysken (Full Employment Abandoned, 2008) reveal the dialectical nature of reform under capitalism: implemented within the current system, a JG could simply become another tool for enforcing wage discipline; but under worker control, it could abolish the reserve army of labor entirely. This contradiction defines all MMT insights – they become revolutionary only when wielded by movements strong enough to break capital’s structural power. Gramsci’s theory of cultural hegemony (Prison Notebooks, 1935) explains how the bourgeoisie maintains control by making capitalist relations appear natural and inevitable.  

History’s lessons are unambiguous. As Wray documents, the 1930s sit-down strikes won concessions not through policy papers but by physically occupying factories until the National Labor Relations Act was signed. Mitchell’s research on postwar full employment proves it lasted only while militant unions maintained strike capacity. Today’s financialized oligarchy – armed with Gramscian cultural hegemony and Godley’s sectoral balance tools – deploys more sophisticated repression: algorithmic wage theft, financialized housing, and ubiquitous debt peonage. Kelton is correct that the money exists for all social needs; Tcherneva proves jobs could be created immediately; Marx was right that capital will never voluntarily surrender privilege. 

Our task therefore isn’t to “implement MMT policies” but to build working-class power capable of commanding the surplus we produce. Mitchell’s JG models become revolutionary when combined with wildcat strikes. Wray’s monetary analysis matters only when redirecting credit from speculation to social needs. As Gramsci taught, we must fight simultaneously in the “trenches” of immediate struggle (rent strikes, debt refusal) and the “cathedral” of ideology (exposing money as class weapon). Kelton’s deficit truths and Marx’s surplus value theory converge on one demand: expropriate the expropriators. Not through elections – through the organized force that made capital tremble in 1917, 1936, and 1968. 

Money is the bourgeoisie’s scorecard in a game rigged against workers. Tcherneva’s JG blueprints, Godley’s sectoral balances, and Wray’s tax-driven money all demonstrate another world’s technical possibility. But as Marx declared, “The philosophers have only interpreted the world; the point is to change it.” We’ll change it when our picket lines outnumber their police, our strikes outlast their reserves, and our solidarity becomes the new cultural hegemony. The factories stand idle, the workers stand ready; only the capitalists’ threat of violence stops us. Let’s make that violence obsolete. 

oooooo

Gehigarriak:

“Job guarantee” could address biggest employment challenges of our time: UN expert

https://www.ohchr.org/en/press-releases/2023/06/job-guarantee-could-address-biggest-employment-challenges-our-time-un-expert

GENEVA (30 JUNE 2023) – Job guarantee programmes – whereby the government guarantees a job to anyone willing and able to work – can protect workers from the biggest global employment challenges of our time, according to a new report by the UN Special Rapporteur on extreme poverty and human rights, Olivier De Schutter.

“With miserable working conditions and low pay affecting the majority of the world’s workers, and disruptions and job losses in labour markets we can expect to see from the rise of AI, it is clear that the world of work needs an urgent rethink,” De Schutter said ahead of his presentation of his report to the 53^rdSession of the UN Human Rights Council.

“It is no longer enough for governments to merely try to create the right conditions for job growth,” the UN expert said. “Instead, they should guarantee a secure and socially useful job at a living wage for anyone who wants one. Properly understood, this is what the right to work is truly about.”

The International Labour Organisation puts the global jobs gap at 473 million people: 205 million unemployed and 268 million who would like to work but are not actively looking due to circumstances beyond their control such as a lack of childcare. Around two billion people, 60% of the world’s workforce, work in the informal economy, often in extremely low-paid, insecure jobs with little access to employment rights.

“For too long exploitative employers have had the upper hand, knowing workers will choose poorly-paid and insecure work over destitution,” the Special Rapporteur said. “A job guarantee would turn the tables, with workers being able to fall back on government jobs that offer decent conditions and wages.”

While job guarantee programmes in the past have tended to create jobs in infrastructure projects such as building roads or dams, De Schutter’s report highlights the alarming workforce gaps in the care, education and health sectors they could fill.

“The global employment paradox is that while there are too few decent jobs, there is certainly no shortage of work to be done,” De Schutter said. “Spurred largely by our obsession with economic growth at all costs, jobs in the care, education and health sectors are woefully undersupplied by the market despite being of immense value to society – no doubt because they don’t churn out obscene profits.”

“A job guarantee could fill the roles we so desperately need, but that the private sector has no financial incentive to provide,” the expert said.

“A job guarantee scheme should be strictly voluntary and sit alongside, not replace, social protection, as a permanent feature of the labour market,” said De Schutter.

“If designed in this way, it would play a hugely important role in wiping out unemployment, ending the race to the bottom on working conditions, and providing the income security and social inclusion millions urgently need to break free from poverty,” he said.

Read the report.

The employment guarantee as a tool in the fight against poverty

https://docs.un.org/en/A/HRC/53/33

GE.23-06355 (E) 180423 180423
Human Rights Council
Fifty-third session
19 June–14 July 2023

The employment guarantee as a tool in the fight against poverty
Report of the Special Rapporteur on extreme poverty and human
rights, Olivier De Schutter

Summary

The Special Rapporteur on extreme poverty and human rights explains how the
introduction of a job guarantee, with the State acting as an employer of last resort, can
contribute to the full realization of the right to work, transforming it from a policy objective
into an enforceable legal right. The job guarantee tackles the paradox of structural
unemployment and underemployment coexisting with important unsatisfied societal needs,
as neither the State nor the market currently supplies the public goods that are needed for thegreening of the economy and for a thriving care economy. The Special Rapporteur highlightsthe benefits of the introduction of the job guarantee both to the individual and to thecommunity, and addresses a number of objections to the idea. He sees the introduction of ajob guarantee as an essential component of the “just transition” and of the new eco-socialcontract needed for the post-crisis recovery.

United Nations A/HRC/53/33
General Assembly Distr.: General
18 April 2023
Original: English

I. Introduction

1. The right to work is a human right. Article 6 of the International Covenant on
Economic, Social and Cultural Rights provides that, “to achieve the full realization of this right”, States parties should take steps to achieve “full and productive employment under conditions safeguarding fundamental political and economic freedoms to the individual”.
This replicates the language of the International Labour Organization (ILO) Employment Policy Convention, 1964 (No. 122), which imposes on States a duty to adopt an active policy designed to promote full, productive and freely chosen employment (art. 1). The Sustainable Development Goals also include a goal to ensure full and productive employment and decentwork for all (Goal 8).
2. These formulations suggest that States have an obligation of means: essentially, to do what they can to create jobs. This report explores whether this could become more than a policy objective: an enforceable right, imposing on Governments an obligation of result – to provide decent work to all individuals able and willing to work. This is the idea of a job guarantee.
3. The idea is not new. In the United States, the Works Progress Administration was part of the New Deal response to the depression of the 1930s. Public employment schemes have been a common response to structural unemployment in member countries of the Organisation for Economic Co-operation and Development (OECD), though with less use in recent decades.¹ They have also been a widely used strategy in low- and middle-income countries,² often as a short-term reaction to mass unemployment. Among the most famous examples are the Productive Safety Net Programme in Ethiopia, which covered about 10 per cent of the population in 2018;³ the Mahatma Gandhi National Rural Employment Guarantee Act in India, with 76 million beneficiary households in the financial year 2020/21;⁴ or the Expanded Public Works Programme in South Africa, which created a million job opportunities in 2021/22.⁵ (5) Although such schemes have often prioritized infrastructure creation, such as roads, dams or wells, public employment programmes in the sectors of care,
education and culture have now become more common: these are labour intensive and therefore allow maximum employment creation within limited budgets and dedicate a larger portion of the budget to wages. The coronavirus disease (COVID-19) pandemic revived interest in these schemes, as a means to buffer the employment impacts of the crisis: examples range from infrastructure in Kazakhstan to education and care in South Africa and tree planting in Nigeria.⁶

II. The paradox of too few jobs and unfulfilled societal needs

4. The job guarantee is an answer to a paradox. On the one hand, many people are jobless or can only work part-time. Globally, 473 million people are seeking employment.⁷ Official unemployment rates do not include all those who have abandoned the search for employment as a result of a lack of opportunities or because, for instance, due to insufficient provision of childcare or support for dependent persons, they cannot reconcile paid work outside the home with often unpaid work within the household. In the European Union and in the United States of America, for instance, only around half of those seeking employment are officially
unemployed.⁸ In low- and middle-income countries, moreover, assessments are especially difficult due to the importance of informal work and the prevalence of underemployment, in the form of involuntary part-time or seasonal work or low-paying jobs underutilizing skills.⁹
5. More jobs will have to be created in the future. An additional 470 million people will be looking for work in developing countries between 2019 and 2035,¹⁰ with a particularly fast growth in sub-Saharan Africa.¹¹ This is why the creation of 400 million decent jobs is such an important component of the Global Accelerator on Jobs and Social Protection for a Just Transition announced in September 2021 by the Secretary-General and the ILO Director General. Growth alone will not suffice. Not all growth is job rich:¹²automation may in fact result in strong growth (supported by productivity gains) going hand in hand with net job losses;¹³ and in situations in which growth is primarily explained by the exploitation of natural resources, as in Africa, there is only a weak association between gross domestic product (GDP) and employment¹⁴ – this is one reason behind calls for the introduction of a job guarantee in the African region.¹⁵
6. Unemployment or underemployment significantly increases the risk of poverty, since social protection against this life risk remains highly uneven. Globally, only one in five people who are unemployed receive cash benefits: the others are excluded because no scheme exists or because they are ineligible under existing schemes. Even in high-income countries, only 52.2 per cent of unemployed people receive cash benefits, with figures lower still in less developed regions – 17.5 per cent in upper middle-income countries; 5.5 per cent in lower-middle-income countries and just 0.8 per cent in low-income countries.¹⁶ And even where they exist, unemployment benefits are often inadequate.
7. As a tool of employment policy, public employment programmes can provide jobs to those who are jobless. They can bring back into the active labour force individuals who are considered to have become “inactive”: of those reached by the Argentinian Jefes y Jefas de Hogar Desocupados programme, set up to provide work for cash during the 2002 economic crisis, half were previously thought to be inactive.¹⁷ They can also provide employment to those who are involuntarily working part-time or who depend on seasonal work.
8. This is a powerful tool against poverty. Employment was the most important
contributor to poverty reduction in a set of 16 low- and middle-income countries in which substantial poverty reduction occurred in the period 2000–2010: in 14 out of 16 countries, labour income explained more than 40 per cent of the change in “poverty” (and 50 per cent in 10 countries).¹⁸ And job retention schemes played a crucial role during the COVID-19-induced economic crisis.¹⁹

9. Yet, although there is too little employment, many societal needs remain unfulfilled and much work needs to be performed to meet them. The greening of the economy and the growing recognition of the importance of the care economy – care to older or dependent persons, early childhood education and care, and health care – are opportunities in this regard.
The Special Rapporteur highlighted in an earlier report the employment creation potential of the ecological transformation;²⁰ and ILO simulations for a group of 45 countries representing 60 per cent of the global population show the health, education and care capacity needed to meet the Sustainable Development Goals requires 117 million additional jobs than anticipated under the status quo scenario.²¹
10. This is the paradox. There may be a shortage of decent jobs, but there is no shortage
of work: the problem is that markets undersupply the public goods that are needed for the greening of the economy and for a thriving care economy, and that Governments have too little public revenue to invest in creating the jobs needed for these transitions. It is against this background that the introduction of a job guarantee is proposed.

III. Benefits of the job guarantee

A. Supporting social inclusion

11. Access to decent work provides income, reducing poverty. ²² But it also allows
individuals to gain self-confidence and to gain a sense of purpose.²³ Female participants in the Jefes y Jefas de Hogar Desocupados programme mentioned participation in social life and the learning of useful skills, rather than just income earned, as the main benefits of participation.²⁴ Long-term unemployed people taking part in the Marienthal pilot in Austria reported improvements in subjective well-being, reduced stress levels and a range of other benefits, including improved social recognition. ²⁵ Similar results were achieved by the Kinofelis programme set up in Greece as part of the response to the debt crisis in 2011, which had offered eight months of employment to 45,000 participants by 2017, to create useful work and to improve skills to favour the reintegration of unemployed people in the labour market.²⁶ In very different circumstances, Rohingya refugees living in camps in Bangladesh showed very high demand for work, even in situations in which work did not actually offer greater income than other options. The comparison between the groups receiving pay for employment or cash only highlighted the improvement in mental health associated with being employed.²⁷

B. Raising the bar of labour standards

12. While employment creation has been a powerful tool to reduce poverty, it does not always provide a safeguard against poverty: while, globally, half of women (47 per cent) and three quarters of men (74 per cent) of working age do some form of income-generating work,²⁸not all wages are living wages and not all jobs are decent jobs.²⁹ For many, precarious working conditions and a lack of decent pay characterize the work experience. The “gig economy”, casualized labour contracted through digital platforms, has rapidly emerged as an important employment category, yet also one with less social protection and less scope for collective bargaining than more traditional employment forms: rich countries are now confronted with forms of precariousness that have long existed in low- and middle-income countries³⁰ and regulatory regimes are trying hard to catch up. Precarity is also particularly
widespread among the 2 billion informal workers, forming 60 per cent of the global
workforce.³¹
13. Precariousness and informality characterize the emergence of a global precariat.³² For these workers, a job guarantee may constitute a fall-back option, strengthening their bargaining position and allowing them to claim a right to decent work – and, if they are in informal work because of the unwillingness of the employer to declare them in order to circumvent protective legislation or to avoid paying social contributions, to seek formalization. Where the employment provided under the job guarantee includes paid leave, pension contributions, health insurance and childcare subsidies, or where it pays a wage above the minimum wage, it raises the bar across the whole economy.³³ In Andhra Pradesh, for instance, while the mean earnings of households registered under the provisions of the
Mahatma Gandhi National Rural Employment Guarantee Act rose by 13.9 per cent, the earnings from the programme itself only accounted for 14 per cent of the income gain – 80 per cent of the increase in income came from higher private labour-market earnings.³⁴

C. Building skills and training

14. While conventional active labour-market policies aim at integrating jobseekers into regular employment after programme participation, job guarantee schemes aim at employment through programme participation, thus improving the economic and social situation of participants. Job guarantee schemes provide an opportunity to equip participants with new skills, including informal skills derived from work experience, thus improving the prospects of the beneficiaries to find a job after leaving the programme³⁵ or to start successful businesses. Indeed, while a meta-analysis of 200 studies of different active labour-market policies (most of which were in OECD countries) found no impact on employment rates from public employment programmes, it did confirm the positive effects of training programmes, defined as classroom and on-the-job training: the probability of finding employment
increases by 6.7 per cent after two years.³⁶ Similarly, a study of active labour-market policies in Latin America and the Caribbean concluded that training encouraged formalization and improved employment prospects, although short duration training programmes (lasting four months or less) were less likely to show positive results than other programme designs.³⁷ In Argentina, the Potenciar Trabajo scheme aimed to create jobs equivalent to 2 per cent of the labour force, with elements that included supporting people to complete educational qualifications alongside work. ³⁸ To the extent that a job guarantee includes training opportunities for participants, it could therefore significantly enhance their future employment prospects – although this may be more difficult to achieve when participation is for short periods of time.³⁹
15. Job guarantee schemes should therefore favour a quality work experience, as well as training. Both the work experience and skills-building must be relevant: the engagement of employers in the design of the programme may help in this regard.⁴⁰

D. Ensuring integration of those most disadvantaged in the labour market

16. A job guarantee scheme, paying at least a living wage and open to all who wish to
work, should be of the greatest benefit to those most at risk of underemployment or of having to accept poor quality jobs. It can therefore contribute to a “just transition” by providing options to the workers displaced by the decarbonization of the economy.⁴¹ In addition to these workers, three groups deserve particular attention.
17. The first are the youth. Globally, more than one in five of those aged 15–24 years are not engaged in education, employment or training, with women twice as likely to be so than men (31.5 per cent compared with 15.7 per cent). The pandemic increased the numbers of those not engaged in education, employment or training by close to 20 million, from 21.8 per cent (2015–2019) to 23.3 per cent in 2020. Youth unemployment rises faster in downturns.
In OECD countries, for every 1 per cent increase in adult rates, youth unemployment rises by 1.79 per cent. ⁴² The COVID-19 pandemic provided a powerful illustration of this vulnerability across the globe: before the pandemic struck, 13 per cent of all those employed were young persons, yet they made up a third (34.2 per cent) of the 2020 employment loss.⁴³
18. High rates of persons not engaged in education, employment or training led the
European Union to introduce the Youth Employment Guarantee in 2013,guaranteeing those under 30 either training or employment options within four months of leaving education or becoming unemployed. ⁴⁴ Evaluations of this initiative are mixed, however, and implementation is uneven.⁴⁵
19. The second group are women. Worldwide, in 2022, 43.8 per cent of women were in paid employment, compared with 67.9 per cent of men.⁴⁶ Women are also disproportionately represented in informal work and they earn on average 16 per cent less than men (and 35 per cent less in some countries).⁴⁷ Many public employment programmes therefore specifically seek to support women’s participation and since they provide equal wages to women and men, they can help to address wage discrimination.⁴⁸48 In India, because many women in rural areas have otherwise limited access to paid employment, 58 per cent of beneficiaries under the Mahatma Gandhi National Rural Employment Guarantee Act were women in 2022–2023.⁴⁹49 Moreover, a third of places are set aside for women and the Act requires equal wages and childcare facilities to be provided.⁵⁰In Nepal, where women’s work options are often constrained to informal agricultural work,⁵¹ a programme to improve transport infrastructure to challenge job segregation – the Strengthening the National Rural Transport programme – provides jobs, with quotas for women’s access and a guarantee of equal pay for equal work, linked with provision of free and safe transport. The programme also seeks to ensure women
are not only allocated to unskilled roles within the programme and to challenge gender roles:
70 per cent of those employed as part of road maintenance groups are women.⁵²In general, public employment schemes open to women, providing equal pay, with worksites close to home and safe transport, and with part-time work available and designed to fit around care responsibilities, can expand women’s options and challenge the patriarchal nature of many labour markets.⁵³
20. The third group are the long-term unemployed. The longer a person is without a job, the more difficult it becomes for that person to gain access to employment: the probability of finding work is 0.3 in the week after unemployment, 0.08 after eight weeks and down to just 0.02 in the year after unemployment.⁵⁴ Part of the problem is the discriminatory attitude of employers towards the long-term unemployed, an issue discussed elsewhere by the Special Rapporteur. ⁵⁵ Such attitudes can be challenged, however, once the employer sees the potential employee in a period of work.⁵⁶ Participation in a public employment scheme may
therefore help overcome the high barriers the long-term unemployed face. This is also a finding from the experiments of the Territoires zéro chômeurs longue durée scheme in France, launched in 2016 and now covering 53 municipalities, and of the Marienthal pilot inAustria

E. Providing an automatic stabilizer for the economy

21. By creating jobs in times of economic downturn, and supporting the transition to jobs
in times of growth, a job guarantee scheme can act countercyclically, maintaining income levels and demand during downturns and reducing the wider consequences ofunemployment.⁵⁷ In India, for instance, the workdays provided under the Mahatma Gandhi National Rural Employment Guarantee Scheme increased by 94 per cent in comparison to the previous year after the COVID-19 pandemic hit the economy, reaching a peak in June–July 2020. ⁵⁸ A 2021 survey assessing the performance of the scheme in a number of communities in Bihar, Karnataka, Maharashtra and Madhya Pradesh raised a number of concerns over unmet need and payment delays, but it also found important insurance effects from the scheme. For those households who lost income from sources other than the scheme during the pandemic, increased earnings under the scheme compensated for between 20 and 80 per cent of the income loss.⁵⁹ Other developing countries also sought to rely on public
employment programmes to face the employment impacts of the crisis, although the more limited fiscal space of these countries made it more difficult for them to act on a large scale.⁶⁰

F. Building assets and providing goods and services

22. Job guarantee schemes can also serve to supply goods and services undersupplied by the markets either because they are public goods, such as infrastructure works, or because of the limited ability to pay of the potential beneficiaries, for instance those in need of care services.
23. In the past, public works schemes have focused on heavy (and relatively labour-
intensive) infrastructure works, such as building roads or improving water management. Such schemes have become more diversified in recent years, a trend that the COVID-19 pandemic accelerated. The South African Presidential Employment Stimulus, an additional scheme to the Extended Public Works Programme, created 795,151 jobs between October 2020 and December 2022, two thirds of which (596,109) were in the basic education sector, providing teaching assistants and support for schools. Through its Social Employment Fund, the Presidential Employment Stimulus also supports community-driven initiatives to create
“work for the common good”, supporting community-led initiatives (for instance,
placemaking, work to combat gender-based violence, food security, upgrading informal settlements and early child development), as well as employment in the cultural sector. In Pakistan, the 10 Billion Tree Tsunami project employs 65,000 workers a day to plant 10 billion trees to adapt to climate change.⁶¹
24. The assets created through public employment schemes can have major and lasting impacts. Irrigation channels constructed through the Program Nasional Pemberdayaan Mandiri (National Programme for Community Empowerment) in Indonesia extended the growing year into the dry season, increasing unhulled rice output by 50 per cent. The Karnali Employment Programme in Nepal served to improve roads, with important savings in travel time. ⁶² Wells have been built under the Mahatma Gandhi National Rural Employment Guarantee Scheme. Many such examples could be provided.⁶³

G. Strengthening local resilience

25. A job guarantee can improve resilience to shocks and contribute to social stability.
Public employment improves local resilience both by protecting income security at
household level and by maintaining economic demand, thus avoiding the cascading damage the spread of unemployment would otherwise produce. Moreover, where such schemes allow investment in better environmental management (such as of soil and water), these can also improve productivity and reduce the effect of climate disruptions and biodiversity loss on food security. In Ethiopia, for instance, the Productive Safety Net Programme generated improvements in irrigation, leading to a 12 per cent increase in vegetable yields.⁶⁴ And while the proportion of households reporting food insecurity increased by 11.7 percentage points in 2020 as a result of the COVID-19 pandemic, the increase was only 2.4 percentage points for households participating in the Productive Safety Net Programme; the households were
also less likely to reduce spending on health and education (7.7 percentage points) and agricultural inputs (13 percentage points) than other households.⁶⁵ Finally, by providing employment opportunities to young people, a job guarantee can help to avoid resentment and potential radicalization.

H. Promoting local democracy and civic participation

26. Provided that inclusive decision-making processes are put in place, ensuring that
women⁶⁶ and socially marginalized groups participate effectively, the establishment of a job guarantee can provide an opportunity for local engagement, where the projects to be supported by public employment are identified by the communities of users.⁶⁷ Effective participation also ensures that the projects supported contribute effectively to local development: in general, active labour market policies are only effective when designed with the involvement of social partners.⁶⁸ The French Territoires zéro chômeurs longue durée scheme, for instance, is structured to facilitate the involvement of multiple partners in local communities to help decide and co-produce work with jobseekers. This is the most adequate response to the critique often addressed to public works programmes, which is that these can
result in “make-work jobs”, rather than providing meaningful, valued work and useful
outputs.
27. Participation is also important because the design of the job guarantee should take into account that certain of its objectives may be at variance with one another. For instance, the countercyclical function of the job guarantee implies that some workers would be employed for short periods, as the economy contracts and then grows. Yet, the need to invest for the long-term acquisition of the skills required, for example, to retrofit buildings may be in tension with the need to be able to release workers back into the private sector as employment grows.⁶⁹ There may also be a tension between creating new forms of work in sectors the
market undersupplies and fostering skills and training that can lead the participants to graduate from the scheme. Such tensions, and the careful balance to be struck between conflicting objectives, are best dealt with by allowing priorities to be set at the local level, through participatory processes.

IV. Varieties of employment guarantee schemes

28. A large panoply of job guarantee schemes exist. There is no single best model: each scheme should take into account local conditions and be co-designed by social partners, civil society and public authorities. The Special Rapporteur identifies a number of questions that such co-construction processes should address.

A. Universal versus targeted approaches

The job guarantee scheme may be designed as open to all adults able and willing to
work, which is equivalent to saying that its participants will be chosen based on self-targeting.
This is the approach, for instance, of the Mahatma Gandhi National Rural Employment Guarantee Scheme in India, although the 100 days guarantee is addressed to households rather than individuals. While self-targeting may not reach all of the poorest people (particularly those in most need), it can minimize inclusion errors without a test of poverty.⁷⁰
A study from Bihar in India found that the “participation rate [in the Mahatma Gandhi National Rural Employment Guarantee Scheme] falls steadily from 35% of the population for the poorest few wealth percentiles to nearly zero for the richest”.⁷¹ The good fit between participants in the scheme and people in poverty, however, is largely attributable to the fact that the wages are set at a very low level, equivalent or close to the minimum wage: in schemes relying on self-targeting thus conceived, in contexts in which the funds allocated to the scheme are limited, there is therefore a trade-off between appropriate coverage (limiting overinclusion), on the one hand, and ensuring decent wages are paid, on the other hand.
30. Alternatively, the job guarantee scheme may focus on specific categories or areas.
Means testing looks attractive if the intention is to enlarge the opportunities for the poorest groups. Targeting is, however, very different from reaching people: exclusion and inclusion errors are widespread in means-tested schemes in all contexts. Means testing also requires accurate and up-to-date information on individual and household circumstances, which low-income countries rarely have the capacity to collect;⁷² and the proxy means tests used in the absence of more accurate data can only be weakly associated with poverty (especially in the short term).⁷³ In one of his previous reports, the Special Rapporteur noted the limits of such forms of targeting, not least since social registries may exclude the poorest people. ⁷⁴
Excessively narrow targeting in circumstances of widespread poverty will inevitably lead to the exclusion precisely of the poorest households who are the most difficult to reach, and who may experience the greatest difficulties in proving that they are below a certain level of income or who may be most fearful of the stigma attached to having to provide such evidence.
31. Geographic targeting has been widely used in public employment programmes. The Mahatma Gandhi National Rural Employment Guarantee Scheme is specifically targeted to rural areas. In Ethiopia, the Productive Safety Net Programme targets drought-prone (and so food insecure) communities.⁷⁵ In Mexico the Programa de Empleo Temporal is specifically targeted towards small communities (with less than 5,000 inhabitants).⁷⁶ Such approaches are easier to administer than targeting low-income households through means-testing. However, they will miss out many who are in need since not all poor people live in the poorest places.
Choices of areas may also exacerbate existing resentment between beneficiary and excluded communities.

32. Community-based targeting involves including community members in deciding who ought to be included in social programmes. It has been used in the Ethiopian Productive Safety Net Programme, alongside geographic targeting: community meetings are used to identify who is most at need. ⁷⁷ Such an approach capitalizes on local knowledge and strengthens legitimacy. ⁷⁸ Exclusion errors abound, however. The Ethiopian Productive Safety Net Programme is estimated to exclude 81 per cent of intended recipients. When the Vision 2020 Umurenge Programme of Rwanda used community targeting, it excluded 97 per cent of intended recipients (the targeting criteria have since been changed to a proxy means test).⁷⁹ The community-based targeting mechanism used in a World Food Programme project in Somalia was thus found to have paid too little attention to the role of clans, leading to the omission of many marginalized persons. ⁸⁰ Allowing community members to decide on beneficiaries may build some acceptability. Yet, it cannot be blindly assumed that communities assess need effectively and indeed will not discriminate. The risks of elite

capture, nepotism and fuelling social exclusion are real.⁸¹

33. Categorical targeting involves determining eligibility by clearly observable and

understood demographic or social criteria. The key benefit of categorical targeting is that it may be used without significant information requirements and may be used to prioritize those who are generally vulnerable in the labour market, such as women or young persons or the long-term unemployed. The Territoires zéro chômeurs longue durée scheme in France or the Marienthal scheme in Austria, for instance, focus on the long-term unemployed; the European Youth Guarantee focuses on youth. Of course, whether such an approach will ensure that the job guarantee will contribute to poverty eradication will depend on how closely poverty relates to the category used in targeting: if the association is weak, then the contribution will be rather minimal.

34. Whatever method is used to determine eligibility, it is essential to ensure that the job guarantee scheme will reach people in poverty: while they may benefit the most from such a scheme, they may also face the most hurdles in accessing it. ⁸² The Special Rapporteur reiterates in this regard the potential benefits of affirmative action and outreach measures to ensure low-income households are informed and can seize the opportunities of the scheme.⁸³

B. Setting the pay

35. In high-income countries, schemes typically provide cash benefits: where food stamps have been used, these have often been resented as a form of paternalism and as feedingstereotypes about the inability of people in poverty to make the right choices. Food and other in-kind support (such as agricultural inputs or other productive assets) has more often been used, alone or alongside cash, in low- and middle-income countries. Yet even in these countries, the consensus has shifted towards using cash (and sometimes vouchers) in preference to in-kind support.⁸⁴ Cash gives choice and power to individuals. It stimulates local markets with multiplier effects. It is cheaper to provide as there is no need to transportgoods.⁸⁵ It leads to better nutritional outcomes.⁸⁶

36. In-kind support may be advisable under certain circumstances, however. The

Ethiopian Productive Safety Net Programme, for example, provides a mix of cash and grain.

When high inflation hit in 2008, to receive food directly was a safer option than to receive cash to buy it on the market: the proportions opting for cash reduced from 74 per cent in 2005 to 48 per cent in 2008 (concurrent food price inflation in Ethiopia was 350 per cent).⁸⁷

37. Public employment schemes typically pay the statutory minimum wage, ensuring that this minimum wage is sustained across the whole economy. Only rarely do such schemes pay wages that are higher:⁸⁸ this ensures that the costs will remain limited and that participants will be encouraged to graduate from the programme. It also ensures a form of self-targeting, attracting mainly people in poverty, where the programme is designed as universal. For the same reason, some schemes rely on a flat rate.⁸⁹ A more graduated pay level, however, set in line with education and experience,⁹⁰ may reduce the risk of the scheme being used to undercut higher paid sectors of employment. It may also make the scheme more attractive to

more qualified workers, making it more popular within the precarious middle class.

C. Duration of scheme participation

38. Participation in public employment schemes is typically limited in time or, such as

the Mahatma Gandhi National Rural Employment Guarantee Scheme, constrain the days of work.⁹¹ In Côte d’Ivoire, for instance, the Travaux à haute intensité de main d’œuvre scheme allows for participation of six months at most; many schemes cap participation at one year.

Only with relatively long periods of participation can assets be accumulated, however; for instance, five years will generally be needed in the case of the Ethiopian Productive Safety Net Programme to observe livestock improvements.⁹² In high-income countries, the fear of lock-in effects has generally prevailed, perhaps motivating OECD advice for high-income countries to scale back public employment schemes implemented to buffer the COVID-19 pandemic.⁹³

V. Objections to the job guarantee

A. Affordability

39. It is sometimes argued that job guarantee schemes are costly. The nationwide

Mahatma Gandhi National Rural Employment Guarantee Scheme represented approximately 0.3 per cent of GDP in the financial year 2019/20, down from a high point of 0.6 per cent in2009/10.⁹⁴ Spending on the Argentinian Jefes y Jefas scheme during the 2001/02 financial crisis was 1 per cent of GDP.⁹⁵ The introduction of a job guarantee in the United States would represent 1.33 per cent of GDP.⁹⁶

40. Such investments should be assessed against the huge costs of unemployment, which go far beyond the loss of tax revenues and the social protection provided to jobseekers by the State in countries in which unemployment benefits exist.⁹⁷ In 2021, OECD countries spent an average of 0.58 per cent of GDP on unemployment assistance.⁹⁸ With joblessness comes poorer health, shorter lives, psychological distress and reduced future employability and earnings. Long-term unemployed persons lose social networks; they express lower levels of life satisfaction and social integration;⁹⁹ and they are stigmatized as not contributing to society.¹⁰⁰The health impacts of unemployment, particularly the mental health impacts (which are especially severe for men), occur after even short periods of unemployment.¹⁰¹

Unemployed persons are around twice as likely to report psychological problems as those who are in work.¹⁰²In the United States, male workers who were laid off in the early to mid-1980s were more likely to die in the years immediately after unemployment.¹⁰³In New Zealand, unemployment was found to increase by a factor of two to three the chances of dying by suicide.¹⁰⁴ Unemployment is also correlated with higher delinquency¹⁰⁵ and youth unemployment, in particular, may increase the risk of conflict.¹⁰⁶

41. Unemployment is also corrosive within families. It increases domestic violence.¹⁰⁷ It reduces children’s chances of entering tertiary education: ¹⁰⁸ in Germany, long-term unemployment of fathers reduces the chance of children staying on in tertiary education by 17 percentage points.¹⁰⁹ Youth unemployment also reduces later employment chances and pay: in the United Kingdom of Great Britain and Northern Ireland, early experience of youth unemployment results in a 12–15 per cent penalty on wages at age 42;¹¹⁰ in the United States, a six-month spell of unemployment when young equates, on average, to a loss of $22,000 of later earnings over the following 10-year period.¹¹¹

42. Conversely, ensuring full employment results in reduced health costs for the working-age population, higher tax returns from full employment and from increased formalization of the workforce, and multiplier effects from spending in local economies and the value of public works. Any assessment of the benefits of a job guarantee should also capture the productivity returns of a more skilled and healthy workforce, which would be expected togrow over time. A “marginal value of public funds” approach,¹¹² or comparable methodologies, could be used to assess the full range of benefits of the job guarantee scheme, not only for the participants, but also for public welfare more broadly.

43. Considering the important benefits to society of tackling unemployment and of providing goods and services undersupplied by the market, financing from general taxation would be fully justified. Some schemes may, moreover, pay for themselves, where they are financed from ringfenced unemployment insurance funds.¹¹³ Official development assistance has occasionally funded public employment schemes, as was the case with the Productive Safety Net Programme in Ethiopia. ¹¹⁴ Other, more innovative, financing options exist. Trinidad and Tobago finance their public employment programme with oil revenues; and Colombia is considering using assets seized from drug traffickers to finance public employment schemes.¹¹⁵

B. Impacts on the labour market

44. The impacts of the introduction of a job guarantee scheme on the labour market need to be carefully considered. Two separate yet symmetrical concerns have been raised. On the one hand, a job guarantee may result in a form of unfair competition with existing economic actors if it pays wages below the market rate. It could also lead public administrations to downsize certain services and outsource them to the job guarantee scheme. This could threaten incumbents and lead to job losses, running counter to the very objectives underlying the job guarantee.¹¹⁶ Job guarantee schemes can be designed to prevent such impacts: in the Territoires zéro chômeurs longue durée scheme, the enterprises created to employ the long-term unemployed are set up to exclude any competition with the private sector.

45. On the other hand, however, competition with existing economic actors may be a virtue, where the job guarantee scheme provides better wages and working conditions, thus raising the bar across the employment market and strengthening the bargaining power of workers across the economy.¹¹⁷ This effect has been seen, in India, with the Mahatma Gandhi National Rural Employment Guarantee Scheme¹¹⁸ and, in Ethiopia, with the Productive Safety Net Programme.¹¹⁹

C. From welfare to workfare

46. The fear has been expressed that current social protection policies may be endangered by the introduction of a job guarantee scheme. Might a job guarantee scheme not be used as a convenient pretext for making social protection conditional upon accepting a job, provided such a job is considered “suitable”? This is a legitimate concern. There exists a strong political pressure to increase work requirements within existing social protection support, a trend sometimes described as the “activation” of social protection.¹²⁰ In countries in which social protection is weak and fiscal space limited, it may also be politically easier to provide income security by establishing or expanding public employment programmes, rather than by expanding other forms of (unconditional) social protection.

47. Such an instrumentalization of job guarantee schemes would be particularly troublesome since the success rate of workfare programmes is limited at best. Such programmes are based on paternalist assumptions of human motivation and moral failings:¹²¹121 they create a welfare “ordeal” to ensure that only the most desperate will apply for social protection, since only people facing destitution will accept strong work requirements as the price to be paid for support.¹²² While workfare programmes may reduce numbers claiming welfare support, ¹²³ there is little evidence that they actually increase employment rates (indeed, lock-in effects may harm the chances of getting work elsewhere), and they work the least well for those facing the highest barriers to work.¹²⁴

48. The shift from welfare to workfare is not inevitable, however. Participation in the

scheme should be on a strictly voluntary basis, not as a condition for receiving other kinds of support. The introduction of a job guarantee scheme could be paired with a requirement of non-retrogression in the provision of unconditional social protection, to avoid a slide towards workfare. It could also be combined with initiatives to better value care work, performed within households or communities, often without remuneration or even formal recognition.

D. Inflation

49. It is sometimes argued that unemployment (at some rate) holds down wage demands and so inflation. It follows that, instead of full employment as the policy objective, Governments should aim for an unemployment rate that, while low, is high enough to manage inflation. The Phillips curve specifying a correlation between (low) unemployment and (high) inflation is invoked in support of this position.¹²⁵ More recently, scholars have put forward the non-accelerating inflation rate of unemployment, to refer to the lowest point that unemployment could be without triggering inflation.

50. The argument fails on a number of grounds. First, it places considerable blame for

price inflation on worker pay demands, whereas other causes, such as the supply side shock of rising commodity prices (the first cause of the inflation leading to the current global cost-of-living crisis) can be an equally or more significant explanatory factor.¹²⁶ Second, the Phillips curve is outdated, based on a very different labour market to that of today. It accounts neither for periods of stagflation when high inflation and unemployment coexist, nor for periods when high employment did not trigger substantial wage growth.¹²⁷ Between 2000 and 2019, for example, inflation and unemployment were “largely disconnected” in higherincome countries. ¹²⁸ Similarly, the assumptions underlying the calculation of the non-accelerating inflation rate of unemployment do not take account of the role of underemployment (involuntary part-time employment) in explaining low wage growth.¹²⁹Where public employment schemes have been introduced in low- and middle-income countries, this has not led to increased inflation.¹³⁰ Third, whatever additional inflation mightresult from the introduction of a job guarantee scheme, this would be modest and a one-off adjustment as unemployment is replaced by minimum wage employment and the price of labour increases.¹³¹ The purchasing power of low-income groups within society can and indeed should be protected by indexing the levels of benefits and wages to the cost of living.¹³² And where the economy takes off, driven by increased demand, the job guarantee operates as a stabilizer, as workers will move away from the scheme to better-paying jobs.

Finally, to the extent that job guarantee schemes can help address labour-market bottlenecks, by training workers for employment in occupations for which there are shortages of skilled workers, they can actually reduce the risks of inflation rather than increasing them.

E. Household impacts

51. Some studies suggest that, as adults join a job guarantee scheme, children may take their place in performing work within the household or the family business.¹³³ To prevent any such risk, Governments should combine the roll-out of job guarantee schemes with investments in education and care services (especially in rural areas), and ensure that participation in such schemes can be balanced with the care responsibilities of participants.¹³⁴

52. Indeed, the response may be provided by the job guarantee schemes themselves.

Across societies, the provision of care – for the old, the young and the ill – is systematically undervalued. It is undersupplied by the market and, when provided voluntarily (predominantly by women), it often goes unrecognized. Against this background, the fear has been expressed that a job guarantee might undermine self-provisioning by communities of these care needs, prioritizing paid work above the recognition and support for unpaid work done in support of communities.¹³⁵

53. However, the job guarantee may serve precisely to support the decommodification of labour and the recognition that even the work that is most vital to the health of communities may not be rewarded by the market, due either to its nature as a public good or to the limited purchasing power of those who benefit from it the most.¹³⁶ Job guarantee schemes, alongside other forms of social protection, can actually support the care economy, often with particular benefits for women. They can provide a way to remunerate care: the South African Expanded Public Works Programme and the Presidential Employment Stimulus have care as a coreelement (for example, in the early child development and basic education sectors). They can also reduce the burden of household responsibilities – a burden that is shouldered mostly by women, worsening their time poverty – for instance, by allowing investments in water management or in the provision of clean energy (reducing the time required to fetch water or fuelwood).¹³⁷

54. A job guarantee scheme can contribute to addressing the crisis in care and its lack of recognition, by rewarding some forms of care and reducing other unpaid work. This does not supplant the need for societies to support the reproductive economy, including through basic income schemes or other cash transfers.

F. Corruption and maladministration

55. The implementation of job guarantee schemes faces a number of challenges. There may be a mismatch between the supply of jobs and demand, especially when the need is greatest: while the Mahatma Gandhi National Rural Employment Guarantee Scheme creates an enforceable entitlement to work, at times 44 per cent of those who wanted work under the scheme were not able to do so.¹³⁸ Payment delays are also frequent under public employment schemes:¹³⁹ a survey of a number of communities in several Indian states showed only 36 per cent had been paid within the stipulated 15 days, with wide variations by location.¹⁴⁰ The Special Rapporteur also heard testimonies about patronage corruption, especially in situations in which demand exceeded supply: certain applicants were excluded (or others favoured) for the benefit of allies, friends and relations. One study concerning the Productive Safety Net Programme highlighted concerns about corruption, clan politics and scheme quotas, resulting in some better-off people being included and some of those worst affected by food insecurity being excluded. ¹⁴¹ Ghost workers (listed on the payroll but not participating in practice, with pay stolen by a third party) have been a concern in the South African Expanded Public Works Programme, with municipality officials prosecuted for filling posts with ghost workers for personal gain.¹⁴²

56. Adopting a rights-based approach is a first step towards reducing the risks of corruption and discrimination. This means defining access to the scheme as a legal

entitlement, allowing for access to recourse mechanisms in cases of exclusion. Community-level social audits can also help to identify fraud: under the Mahatma Gandhi National Rural Employment Guarantee Scheme, such audits allow local communities to review information about who is recorded as working on the scheme, wage slips and the works carried out.¹⁴³

Technology can also help. Biometric systems using facial recognition or fingerprints to

authenticate identity at worksites reduce the risk of ghost workers: this is increasingly used in South Africa to avoid the identity documents of dead people being used. Electronic payment systems giving money directly to workers minimize the risks of intermediaries corrupting the system or stealing pay. Yet, there are also significant challenges linked to the introduction of immature technologies in certain contexts

VI. Conclusion and recommendations

57. Conceived of as a permanent feature of employment policy that contributes to social protection, a job guarantee scheme can contribute to income security, work

experience and skills development for the participants, at the same time strengthening the bargaining position of workers across the economy.

58. It can also support a just transition to a green economy and provide services to the population that are currently undersupplied. It can make the right to work an

enforceable human right and a pathway to escape poverty. And it is affordable, taking into account not only the direct and indirect costs of unemployment, but also the

positive contributions the works performed can deliver.

59. A job guarantee scheme will only fulfil its promises, however, if it provides decent

work, as a legal entitlement for those willing to join the scheme, and is not subverted

into becoming a conditionality attached to other, existing social protection schemes. Theworks to be performed should ideally be identified at the local level, in accordance with local priorities, giving priority to ecological transformation and unmet social needs. The scheme should be designed to minimize the risks of corruption and discrimination.

Under these conditions, the introduction of a job guarantee scheme can be an important tool for a new eco-social contract, for societies to be more resilient and more sustainable, with improved social cohesion.

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