“Indeed, under a regime of permanent full employment, the ‘sack’ would cease to play its role as a disciplinary measure. The social position of the boss would be undermined, and the self-assurance and class-consciousness of the working class would grow. Strikes for wage increases and improvements in conditions of work would create political tension. It is true that profits would be higher under a regime of full employment than they are on the average under laissez-faire; and even the rise in wage rates resulting from the stronger bargaining power of the workers is less likely to reduce profits than to increase prices, and thus adversely affects only the rentier interests. But ‘discipline in the factories’ and ‘political stability’ are more appreciated than profits by business leaders.” – Michal Kalecki, “The Political Aspects of Full Employment”
Neoliberalism’s big lie
Neoliberalism, the big economic and social lie of the modern day, tells you that the central government can go broke, that the national debt is a very real problem, and that the proceeds from tax collections and issuing bonds are revenue streams that fund public spending. Through fear-mongering, Neoliberalism convinces you that austerity is desirable. It tells you that fiscal policy is the proper way to fund war, but monetary policy is the stable way to manage an economy. It insists that we cannot do, cannot have, and ultimately cannot afford anything that secures the public’s well-being.
The foul ideology encourages the public to view welfare benefits as something shameful and to label recipients as “scroungers”. It disregards the fact that benefits are an automatic stabiliser, without which an economic downturn grows worse. Instead, we are told benefits are unaffordable and must be slashed. The welfare-to-work scheme ensures that the poor are made to search for jobs that aren’t there, or to accept wholly insufficient and degrading low-paying part-time roles.
Unemployment is always a political choice
Involuntary unemployment is the establishment’s preferred price anchor for the Pound Sterling. In other words, unemployed humans are used to fight a never-ending war to prevent inflation. In truth, involuntary unemployment is always a political choice, not an economic choice. It is a whip that allows business to threaten workers with unemployment, privation, and the negative social stigma associated with joblessness if they refuse to accept low pay and substandard working conditions.
You are told that involuntary unemployment must be maintained to avoid inflation. In truth, the purpose of involuntary unemployment is nothing more than to act as an economic whip that capital can crack on the back of labour, threatening workers with unemployment lines if they refuse to accept low pay and other indignities.
Neoliberalism claims that an unfettered free-market can self-regulate. But, as you’ve discovered in this series, the market is actually nothing more than a mere user of the central government’s currency and the creation of the same. It is madness that transforms wealthy nations into sweatshops for the benefit of the few.
We intend to break the stranglehold of Neoliberalism, and we begin by introducing a Job Guarantee that pays a dignified fixed wage to anyone willing and able to work. The Job Guarantee is not a job creation scheme per se. It is, first and foremost, a powerful automatic stabiliser funded by the currency-issuing power of the central government that will anchor the Pound Sterling to labour, creating long-term price stability. Therefore, here in Part IX, I will provide a simple, basic overview of the Job Guarantee, and then in the final installment to the series, I will discuss the economics and explain why the Job Guarantee is far superior to a Universal Basic Income.
The problem with modern job creation
Modern job creation policies and programs always begin by ensuring employment for skilled and educated workers first. The hope is that demand for labour will then flow down to the least skilled roles. Not only is such a thing grossly inefficient, it also fails with stunning regularity. As economist, Pavlina Tcherneva would say, the low-skilled are always the last to be hired in an economic expansion, and they are the first to get the sack when things aren’t going well.
As we’ve discovered from this series, consumer spending is business income which then translates to more job additions and lower unemployment. When an economic downturn sets in, the least skilled lose their jobs first, and the effects of reduced consumer spending reverberate throughout the economy until skilled workers begin losing their jobs. Eventually, mass unemployment and a recession occur.
Therefore, since the lowest income end of the working-class represents a large swath of the consumer population we simply must do things differently. For the sake of long-term stability and prosperity, we must build an economy from the bottom-up, and we do that with a Job Guarantee.
An overview of the job guarantee
Basically, the Job Guarantee is a voluntary programme for all those who want a job, and who are willing and able to work. The central government will buy the labour of all unemployed persons that the market does not need or want, and it will then pay those workers a dignified fixed wage to perform useful, social production work in local communities. The central government will fund the Job Guarantee, but the programme itself will be administered on the local level and workers will be hired by councils, and/or non-profits. The Job Guarantee is strictly a public-sector initiative, so private-sector business is not involved.
By purchasing all unwanted labour, the Job Guarantee’s bottom-up approach abolishes involuntary unemployment, and the new, enhanced spending power of the working-class will then create a demand for highly skilled/educated jobs. In simple terms, we start by guaranteeing the jobs of the low-skilled working-class, and as a result, it will create a vibrant job demand for skilled, highly skilled, and highly educated people.
The Job Guarantee will not provide private, for-profit companies with employees whose wages are paid by the central government. It is not a wage subsidy scheme, nor is it a temporary programme that would only operate during economic downturns and then close during economic expansions.
The Job Guarantee is a permanent, public sector initiative and it will operate indefinitely without limit 24/7/365 regardless of the state of the economy.
How hiring works
Each community has needs to address, and there are things communities would like to to do to enhance the quality of life for their citizens. Some will be the same across multiple communities, and some needs will be particular to one community alone. The Job Guarantee, by design, gives communities the ability and the flexibility to achieve these goals.
There will be Job Guarantee centres in every local community. There are no tests, no screenings, nor any other obstructive requirements used in standard recruitment and employment practices to secure a role. All who want to work and are able to work will receive a job, guaranteed. There will be jobs to suit the wide range of people seeking roles.
The hiring process is relatively straight-forward. A person walks into the local Job Guarantee office and signs up. Communities will have various job vacancies ready to fill, and they will also create jobs on the spot. That’s right, on the spot. Instead of the typical approach where a job is created first and then workers are found to fit the job, the Job Guarantee office will consider a person’s likes, dislikes, talents, and abilities, and then create a job around the person if need be.
Should a worker not enjoy the job they’ve been given, he or she need only to request a different one from the office. In some instances, workers might wish to move between several different roles until one is found that they enjoy.
Unlike private-sector employment and current public-sector jobs where a person’s work schedule is usually dictated to them, Job Guarantee workers decide on their schedule and can change it whenever they wish without questions or penalty. Workers can choose to work from one hour, one day per week to a full-time eight hour day, five days per week schedule. The Job Guarantee is highly flexible because the jobs that workers perform are non-essential.
Types of jobs created
By “non-essential jobs”, we do not mean so-called “make-work” jobs, or jobs that are utterly pointless. We mean jobs that must be able to tolerate slight, moderate, or even drastic fluctuations of increased and reduced activity. You simply cannot slow down road work or bridge construction to a crawl for years on end, or leave a road or bridge half finished for several years.
Non-essential jobs are a necessity because the Job Guarantee is not just a job creation programme. It is designed to be an automatic stabiliser for the economy, and, therefore, workers must be able to seamlessly flow in and out of it based on the state of the economy (I will fully explain the concept in the next installment). It is important that Job Guarantee jobs involve work that can be made to speed up, slow down, or even pause for long periods without causing problems for the economy.
So, in order for the Job Guarantee to function properly, it will involve important, but non-essential activities such as road clean-up, protecting wild habitats, community beautification, clerical roles, website and social media administration, IT and networking roles, project management, and befriending services for older persons to name just a few.
For disabled persons who are willing and able to work, the Job Guarantee will provide not only a secure income, but also the social inclusiveness which is vitally important to a person’s well-being. Roles will be tailored to accommodate their disability and specific needs, as well as their talents and desires.
Certain jobs that I wish to touch on separately are befriending roles for severely disabled adults and children. It is an issue close to my heart. The Job Guarantee is a unique and vital opportunity for communities to provide daily well-being visits and activities for severely disabled adults and children, giving them a means to socialise and to make friends with workers who’ve chosen to take on these roles.
Animal shelters are not left out. The Job Guarantee will ensure that there are more than enough workers to provide high quality, compassionate care for stray and abandoned animals, and to assist with adoption services.
I opened this installment with a quote from Polish economist, Michal Kalecki, to prepare you for the next and final installment in the series. To help you better understand the political reasons behind why the establishment fights to protect NAIRU and wants to prevent a return to a full employment economy at all costs, I would highly recommend that you read Michal Kalecki’s “The Political Aspects of Full Employment”. Originally published in The Political Quarterly in 1943, and written in a simple, straightforward language that anyone can understand, Kalecki’s insightful work is still very much relevant today.
Next up is the final installment to the series: Part X: How The Job Guarantee Stabilises A Modern Economy.
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