Skip to content

Why the Job Guarantee Works Best

Good, if a bit long and technical article by Pavlina R. Tcherneva in Naked Capitalism. Here is a snippet… 

In my research funded by the Institute for New Economic Thinking, I have argued that part of the JG needs to be done on the basis of a grants-based approach (especially in normal times, during normal business fluctuations), where the communities, nonprofits, and the unemployed themselves can participate in designing, proposing and executing the projects that would be performed in these communities. This is a model fully consistent with the entrepreneurial American spirit.

The grants will be allocated to non-profits that are on the ground and are already doing many of the jobs that the public sector (yes, the government) has failed to do. These are the same nonprofits which fulfill crucial social needs but lack adequate resources. Plus new nonprofits pop up in an entrepreneurial fashion all the time to fill new needs–e.g., environmental cleanup, sustainable agriculture, urban farming. They are better organized, more familiar with local needs and resources and can surely use more helping hands to do what they need to do. I’ve been suggesting this grants-based approach after observing how some projects in Argentina were done this way. You may think that those uneducated, poor, and ‘unemployable’ men and women have no good business ideas, no entrepreneurial spirit, or ability to figure out what needs to be done and you’d be dead wrong. We don’t need big government planning and authoritarian decision-making about placing certain people into specific jobs—the nonprofit market can figure this all out, so long as it has the resources. Government only needs to make the calls for proposals, assess the projects the way it would with any current private sector contract, perform the due diligence in reporting and quality control, and allocate the funding for worker wages and materials (and in many cases the funding need not be 100%). All the JG does is add the explicit objective to employ the unemployed at a base wage into these projects. Nonprofit work is highly countercyclical, which is why it is well suited to providing the automatic stabilizer we’ve been discussing. As the economy slumps, we can use the existing unemployment agencies to provide placement of the jobless into these nonprofit projects. As the economy recovers the same agencies will provide job placement into higher paying private sector work. We have the infrastructure to execute a JG.

Posted in Green Job Guarantee, News.