Labour’s compulsory job guarantee vs the real thing

Labour re-announced their proposals for a ‘compulsory job guarantee’ today, along with their plans for funding it. I’ll ignore the funding proposals because they are just playing the nonsense  ‘how will you pay for it’ game, but there were some extra details on how the programme will work in practice. It had previously been said that it would only be a one year programme, but now Labour say 5 years. Not all the details are in, but there are enough now to do a compare and contrast with Labour’s plans and what the real thing would look like. By real thing I of course mean the job guarantee as envisaged by MMTers. Apologies for the formatting of this table, but I’m crap at html!

Labour’s Compulsory Job Guarantee MMT Job Guarantee
Eligibility 18-24 year olds claiming JSA for over 1 year; Aged 25+ on JSA for over 2 years Anyone willing and able to work
Compulsory? Yes, possibility of having benefits sanctioned if refuse job No
Choice of which type of work? Unclear. Some element of choice likely Yes. People would be offered work suitable to their skills and interests
Jobs where? Private and non-profit sectors Non-profit only
Pay Current minimum wage Living wage
Hours 25 hours per week Flexible depending on circumstances. Full time and part time options
Duration 6 months Indefinite – until the individual finds a regular job
Training included Yes, but £500 cost cap Yes
What type of work? Unclear. If like Future Jobs Fund, could be a wide range Very broad range

To summarise then, I like the fact that Labour are acknowledging a need to create jobs, but dislike pretty much everything else about their plans. The pay’s too low, the hours too short, the private sector are involved (to what extent is still unclear), 6 months isn’t long enough, there are unnecessarily threatening undertones (sanctions!, compulsory!) and so on. It’s a start though I suppose.

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10 thoughts on “Labour’s compulsory job guarantee vs the real thing

  1. MMT’s JG *is* coercive. MMT’er Bill Mitchell advocates cutting off benefits if an individual declines to participate in the JG. His exact words: “I would not pay unemployment benefits if I was guaranteeing employment.” http://bilbo.economicoutlook.net/blog/?p=3737

    In any event, unless benefits exist to begin with — they don’t in the US where only 12% of the unemployed receive unemployment insurance — then any claim of a “voluntary” JG is misleading. The reality is you either accept the JG or else you starve.

    It is false to say that MMT’s JG offers a choice of work suitable to skills. MMT has no plans to create skilled jobs out of thin air. I have asked MMTer’s to explain what kind of job they would offer a machinist, a butcher, a logger, a mechanical engineer, a cowboy, etc., and their response (i.e. Pavlina Tcherneva) was that the JG was intended only for unskilled workers.

    MMT has no realistic plans to provide training, unless you define training as “picking up trash.”

    MMT’s JG wage *is* the minimum wage, which is currently not a living wage. MMT advocates raising the minimum wage slightly, but they have never drawn a line in the sand and said they would refuse to support a job program unless is pays “X” amount. To the contrary, MMT enthusiastically supported the non-living wage in Argentina’s Jefe program.

    There is no “broad range” of work in the MMT JG. MMTer’s generally advocate limiting funding to 80% wages, which rules out everything except services and menial labor.

    I have often asked MMT to draw a red line in the sand defining how their JG is different than “Workfare” and they have refused to do so. In both Workfare and the proposed JG, it’s either do menial labor or else starve.

    1. What Bill actually says is:

      “Clearly, there is a need to embrace a broader concept of work in the first phase of decoupling work and income. However, to impose this new culture of non-work on to society as it currently exists is unlikely to be a constructive approach. The patent resentment of the unemployed will only be transferred to the “surfers on Malibu” (using Van Parijs’ conception of life on the Basic Income)!

      The Job Guarantee in fact provides a vehicle to establish a new employment paradigm where community development jobs become valued. Over time and within this new Job Guarantee employment paradigm, public debate and education can help broaden the concept of valuable work until activities which we might construe today as being “leisure” would become considered to be “gainful” employment.

      So I would allow struggling musicians, artists, surfers, Thespians, etc to be working within the Job Guarantee. In return for the income security, the surfer might be required to conduct water safety awareness for school children; and musicians might be required to rehearse some days a week in school and thus impart knowledge about band dynamics and increase the appreciation of music etc.

      Further, relating to my earlier remarks – community activism could become a Job Guarantee job. For example, organising and managing a community garden to provide food for the poor could be a paid job.

      We would see more of that activity if it was rewarded in this way.

      Start to get the picture – we can re-define the concept of productive work well beyond the realms of “gainful work” which specifically related to activities that generated private profits for firms.

      My conception of productivity is social, shared, public … and only limited by one’s imagination.

      In this way, the Job Guarantee becomes an evolutionary force – providing income security to those who want it but also the platform for wider definitions of what we mean by work!”

  2. Very much like Coalition IDS approach. British Senior Citizens Party would start a large Programme of Council HOUSE building that we need v/badly. This would spread all across the Economy generating millions of JOBs & training too. A few programmes like this would see Jobs for everyone who wants one. Then its a question of those who DON’T want a job. Bigger issue but smaller problem. Both are easily set up,

  3. Reblogged this on Vox Political and commented:
    I share a few of the reservations about Labour’s job guarantee that are voiced here; the number of working hours and amount of pay available are likely to be extremely unhelpful to people taking part, and of course any private sector involvement would have to be monitored strictly to ensure they weren’t bending the rules to get maximum profit from minimum investment – the £500 cap on training is a particularly strong warning sign.
    But it’s a step in the right direction. Tory work schemes are a disaster.

  4. What’s needed is to put a few choice banksters in jail or in the ground, pour encourager les autres. That’ll hopefully turn them off the idea of leeching SMEs into administration and cheap takeover by their (los banksteros) business partners and onto the idea of fostering SMEs by the allocaltion of interest-free credit as appropriate. As the SMEs floourish they’ll be able to offer people real jobs so there’ll be no need for any of this artificial nonsense about phony-baloney job guarantees. All that, like workfare, guarantees is a permanent underclass as the entry-level jobs are all being done by claimants for free. We face up the the banksters, something Labour are plainly far too scared to do, or we face a lifetime of penury.

  5. Hang on a minute, Labour`s Job Guarantee will have to coexist with that central pillar of neoliberalism – inflation targeting – and the “reserve army of labour” that goes with it in the form of the “Non-Accelerating Inflation Rate of Unemployment” or NAIRU for short. The vile Rachel Reeves is a former Bank of England (BoE) economist and therefore a NAIRU dogmatist. One obvious question that arises in response to the Labour party`s job guarantee for the long-term unemployed is: “Why not have the same guarantee for the short-term unemployed?”

    To find the answer it is necessary to look at those rare examples of neoliberal candour on unemployment. Here`s an example from Chris Huhne, writing in the Independent in 1993 (How to put the nation back to work – 21 February 1993) where he outlined the particular problem of long-term unemployment as he saw it:

    “A new initiative will be necessary now that long-term unemployment is rising again. Employers are more reluctant to hire people who have been out of work for a long time, and they in turn become demoralised. Like unsold flowers, they are moved further back in the florist’s shop, each time reducing their chances of sale. They fail to compete with those in work, so that there is a rise in the amount of unemployment needed to contain wages.”

    http://www.independent.co.uk/news/business/economics-how-to-put-the-nation-back-to-work-1474387.html

    In December 1997 the minutes of the Bank of England`s Monetary Policy Committee showed the same concern, namely, that the long-term unemployed were not “competing” and thereby, as it put it, not exerting as much “downward pressure on earnings” as the short-term unemployed. The following paragraphs taken from those minutes demonstrate the thinking (the letter “A” before each paragraph stands for Annex):

    A41 The relationship between unemployment and earnings was then considered: in particular, did short-term unemployment exert more downward pressure on earnings than long-term unemployment?

    A43 Whatever the reason, the implications for the effect of long-term unemployment on wage pressure were the same: when the proportion of long-term jobless was high, for a given level of total unemployment, workers would probably realise that they could not be replaced so easily, and hence that their bargaining strength was higher.

    A44 The empirical evidence in general supported a more powerful role for short-term unemployment in putting downward pressure on wages. Some studies suggested that only short-term unemployment mattered. But recent Bank research had suggested that, although short-term unemployment was more important, the potential downward effect of long-term unemployment on wages should not be disregarded.

    http://www.bankofengland.co.uk/archive/Documents/historicpubs/mpcminutes/1998/Mpc9712.pdf

    The BoE returned to that preoccupation yet again in August this year. Here`s an extract from the bank`s August 2013 Inflation Report (see page 28 under the heading “The equilibrium unemployment rate is affected by a range of factors that change over time”) where it says:

    “The longer that people are out of work, the more their skills will deteriorate and as a result, the probability of them finding a job decreases — those who have been unemployed for over a year are, on average, around a third as likely to find work as the short-term unemployed. That is likely to mean that they will exert less downward pressure on wages and so the equilibrium unemployment rate in the medium term will remain elevated.”

    http://www.bankofengland.co.uk/publications/Documents/inflationreport/2013/ir13aug.pdf

    The so-called “reforms” of the labour market in recent years have been designed to ensure that the unemployed are seen by those in work as more of a threat to their jobs. State subsidies to employers encourage them to take on the unemployed and sack existing workers. Labour`s aim (which they will never state publicly of course) is to reduce the amount of unemployment deemed necessary to control wage inflation by ensuring that periods of unemployment and employment are both (on average) shorter in term. The former will be achieved directly through the Job Guarantee while the latter will be achieved indirectly through the displacement of those in work by those newly-subsidised by the state.

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