What about offering every Australian a government funded job?

Professor Stephanie Kelton
Contributed by Joe Montero

American economist Professor Stephanie Kelton has been visiting Australia, and while here, suggested that the Australian government should fund large scale job creation program to overcome the problem of unemployment. She was invited by activist organisation GetUp and is consequently here speaking as part of its Future to Fight For campaign.

Calling for a major job creation program is not new. Many have advocated this. Often via the building of new infrastructure. The Kelton proposal is different in that it is a much broader approach and incorporates the concept of a “jobs guarantee” for everyone.

This means that getting work is not only on the back of those without. Society has a responsibility to provide work for its members. This is a major transformation in how unemployment is regarded,  carrying into a government obligation to apply this ethos.

The proposed plan involves offering everyone a government paid job, which is then managed by local communities. Local community management is important, because local communities are in the best position to determine what their needs are and what kind of work is most appropriate to meet these needs. Kelton says, they are the “ones to imagine the kind of work that is going to provide the most value.”

Professor kelton is an adherent of the relatively new and growing  school of modern monetary economic theory, which holds that that the government has an unlimited capacity to spend, if the money entered into circulation in the economy is offset by taxation and other obligations to balance the books.

The proposal fits in with other schools of thought as well, including  Keynesian, traditional classical and even Marxian economics, which suggest that the only real limit is not government debt, but the constraints of the real world, imposed by limits to what nature can provide and human capacity.

Critics argue that approach would boost inflation. The answer from those who support job creation and job guarantee approach, is that this will not be the case, as long as new economic growth is created to soak up the increased spending.

Furthermore, continuing unemployment involves the cost of economic opportunity foregone, when those affected are not contributing to the economy’s output, and there is a significant cost in providing a means of subsistence, even if minimally, through the Centrelink system.

In contrast to the failure of the punitive blame the unemployed and low government spending approach to create jobs, job creation with a guaranteed for all, offers a pro-active answer to one of the most pressing social problems of our time. This is a very good reason to consider it.

 

2 Comments on "What about offering every Australian a government funded job?"

  1. Whilst I prefer UBI, that job offer has plenty of merit too, and possibly would be less costly to the government than UBI, and would be miles better than doing nothing and leaving the status quo as it is. Possibly a problem with this is this – will there be enough jobs available that will qualify as being productive for the economy or jobs manufactured just to appease the full job quota. Still that may not matter if the MMET policy is enabled for the JG.

    • David Jobs under the Job Guarantee program has a much broader definition than the for profit sector… Pamela M Krause: 10 Essentials of the Job Guarantee you could stick on a postcard.

      (based directly on Randall Wray’s policy note, and indirectly on many pieces of writing by Bill Mitchell, Pavlina Tcherneva and many others):

      1) Fair wages.

      A decent and normally uniform JG wage, with decent working conditions.

      2) Sovereign funded.

      Paid for by the monetary sovereign government, with no requirement for increases in taxation or cuts in public spending to ‘pay for’ it.

      3) Universal.

      It should be available to all who want to participate.

      4) Voluntary.

      Not compulsory – systems of welfare payments should be left in place, and may even be made less conditional than before.

      5) Permanent.

      The JG must eliminate involuntary unemployment, underemployment and insecure employment for good.

      6) Local.

      Local administration, as far as possible, reflecting local needs.

      7) Mutual.

      No involvement for private, for-profit businesses. A commitment we make to each other to provide secure employment of social value in the interests of the whole community.

      8) Non-competitive.

      No direct competition with private, for-profit businesses, except in so far as they would need to provide at least the same wage and working conditions as the JG to attract workers. No replacement of existing public sector jobs or services.

      9) Nurturing participants.

      Optional training and further education, and optional job seeking service within the JG – which should never be forced onto participants, but should be available to them.

      10) Nurturing the community.

      JG activities should be aimed at caring for the environment, caring for people and caring for the community.

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