"Another example of how we considered the buffer stock nature of the Job Guarantee is a Report my research group in Australia issued in 2008 following a detailed study that involved a large national survey of local governments in Australia. We sought to develop an inventory of jobs that satisfy several principles (see below).
These jobs would be accessible to the lowest skilled workers, generate benefits by way of meeting unmet demand for community development, personal care and/or environmental care services and more.
We sought detailed information from local governments on the type of jobs they could supervise that satisfied these criteria, including supervision and capital equipment costs and other relevant factors.
The Final Report (released December 1, 2008) – Creating effective local labour markets: a new framework for regional employment policy – developed a new framework for the design of regional employment policy.
It emphasises increased public sector infrastructure spending, the implementation of a National Skills Development framework and the introduction of a national Job Guarantee.
So similar aims to the Marshall Plan for America proposed by CAP. But our Report was not a blog post – it was, rather, 300 pages long and the result of 3-years of research.
It was funded by the Australian government and an industry partner Jobs Australia through one of the competitive funding schemes that operate in Australia (along the lines of the ESRC in the UK or the NSF in the US).
While some of the institutional detail is designed to talk to Australian readers, the general principles outlined in that Report (and also in many other academic papers by myself and my MMT colleagues) is applicable anywhere.
That Report specifically considered implementation issues that would arise with a Job Guarantee.
We noted that the design and implementation choices of any public policy can significantly determine its impact, the devil being in the detail. As such we sought to enunciate a clear implementation model that was intended to address concerns that people might raise in the context of a Job Guarantee.
Relevant here was the issue of ‘real jobs’.
We noted that some of the theoretically necessary design features of the Job Guarantee system are considered by some to undermine the likelihood that ‘quality work’ will be performed under the scheme.
The justification for creating a Job Guarantee job is to provide work which is accessible to the most disadvantaged unemployed workers.
But it is also intended that the work performed delivers a ‘net social benefit’ or enables ‘greater utilisation of an individual’s capacity’.
If these criteria were used to determine the existence of supposedly ‘real jobs’ in the private and public sector, many would be abandoned.
But the existence of socially harmful and degrading jobs in these sectors does not preclude the possibility of them also occurring under a Job Guarantee, so the question of how the value of these jobs will be determined is legitimate.
Whereas market-driven services are supplied according to how much people are prepared to pay for them, and public services generally respond to usage levels, Job Guarantee work is not intended to increase or decrease in response to changing demand for the Job Guarantee work itself, but to accommodate falling and rising private sector demand for labour.
This appears to disengage the work performed under the Job Guarantee from standard ways of estimating its value.
If it transpired that performing this work made little difference to the overall well-being of the community, not only would it seem a waste of public resources that could have been more beneficially expended elsewhere, but those engaged in performing the work could become demoralised because their skills and energy were not being better utilised.
Equally, while the value of the work to the community does not determine whether Job Guarantee jobs are created or destroyed, this does not preclude the possibility that the work could be of great public benefit, although five additional theoretical parameters for the scheme could potentially reduce the scope of the Job Guarantee to deliver valued services.
The five parameters we considered were:
1. Non-rival nature of the jobs:
To serve its countercyclical function efficiently, the Job Guarantee system must not displace employment in the private or public sectors, which precludes it from delivering services which either the market or the state currently deem worthy of delivery.
This means that Job Guarantee services will address needs that are currently not profitable for the private sector to meet (because they are public goods or because potential recipients of the services cannot afford them) and which the state currently considers of such low priority as to not warrant addressing.
This does not preclude Job Guarantee services from meeting considerable unmet need in relation to the natural and social environment and among the least powerful sections of society, particularly if the system is well-engaged at the local grass-roots level, where the market and the state generally are not.
The Job Guarantee model would recognise sensitivity to local need and local control is crucial to identifying worthwhile and under-performed work
2. The Buffer Stock principle:
The Job Guarantee’s countercyclical function also requires that it does not retain workers when the private sector requires them and can induce them with an appropriate job offer to accept employment.
The operation of the Job Guarantee requires that the Government offers a fixed wage job at the effective minimum wage and never seeks to compete with market wages for workers.
The Job Guarantee is a buffer stock at all times.
If the relative attraction of the Job Guarantee work was its greater security, a sufficiently streamlined entry/exit design (that enabled immediate re-entry to the Job Guarantee) will lower resistance to accepting offers of private sector employment by eliminating risk attached to the job not working out.
The successful transition from the Job Guarantee into private sector employment would be enhanced because the workers would maintain work-related physical and mental stamina, social skills, means of transportation, and the like, capacities which are often lost during long spells of unemployment.
This would further reduce the perceived risk of the scheme.
If the relative attraction of the Job Guarantee work was that it required less effort, this would be mitigated by the degree to which Job Guarantee work achieved the standards of effort and professionalism of the private and public sectors.
These standards are not solely achieved within these sectors by either punishing sub-standard performance (for example, demoting or sacking bad workers), or rewarding above-standard performance (for example, promoting good workers).
Although the Job Guarantee’s fixed-wage and the objective of eliminating unemployment limits recourse to these strategies, it does not totally preclude them, nor does it preclude recourse to other sources of motivation used in other spheres of collective human endeavour such as sport, education, families, and voluntary associations.
If the relative attraction of Job Guarantee work is that it is better managed, safer, more dignified or more satisfying than private sector employment, the solution may be that private sector employers raise their standards in these areas.
3. The expectation of continuance:
The provision of new services that meet significant needs may raise an expectation of continuance. If the withdrawal of a highly valued Job Guarantee service threatened a public backlash, governments would be under pressure to continue the service, perhaps as a mainstream public service, which would permanently reduce private sector access to those workers.
Some Job Guarantee jobs will always need to be undertaken to eliminate unemployment because the private sector cannot do it alone.
Those Job Guarantee services that have the greatest demand for continuity, such as new forms of support for the aged and disabled, would need to be prioritised for retention over services (such as public works) that can be discontinued without significant loss of amenity.
4. The lowest common denominator principle:
Since the scheme is intended to offer all persons of working age a job to eliminate their unemployment or underemployment, there is a presumption that Job Guarantee jobs would need to be kept simple to accommodate the ‘lowest common denominator’ of skill level.
Were this so, many workers would find Job Guarantee work unchallenging and many of their skills would remain underemployed.
This issue has been successfully addressed in the past by labour market program providers by assigning different roles and responsibilities to people within a given work group, according to need and ability.
This simply requires that jobs are designed with a range of options and that supervisors possess the skills to allocate work according to worker needs and capabilities.
Job Guarantee jobs have an advantage in this regard in that they are not dependent on achieving a given level of productivity, thus allowing them to be tailored to accommodate special needs, such as those of people recovering from mental illness.
This would best be undertaken through collaborative job design with the individual, their health professionals and family. New forms of workplace support work are also potential Job Guarantee jobs.
In many respects, the flexible potential for the Job Guarantee to offer diverse employment experiences has fewer limitations than existing sources of employment.
5. No substitutability with other public employment:
Some socially useful services which address important social and economic objectives may already be partially met through permanent public sector employment.
Expansion of these services through the Job Guarantee creates a tension between those employed under public sector conditions and those employed under Job Guarantee conditions.
Downgrading the wages and conditions of the public sector workers would be inequitable.
This issue can be addressed by quarantining this existing public sector employment and associated conditions while the incumbent workers continue their employment in these jobs.
Once these workers retire or take up other positions, these jobs will revert to Job Guarantee pay and conditions.
The general principle is that no person would be individually disadvantaged by the introduction of the Job Guarantee. This is not the same as saying a class of jobs might be restructured into Job Guarantee jobs over time.
We identified hundreds of thousands of suitable jobs across three broad labour intensity and wage to non-wage cost categories.
The scale of the jobs we identified was large relative to the size of Australia’s unemployment problem. A similar exercise in, say, the US, would identify millions of jobs."