Re: Liberal-dominated committee calls on Ottawa to study guaranteed income, Mar. 11
While a guaranteed income program certainly deserves consideration, so should a Job Guarantee (JG) for all those able and willing to work. Most young people who have spent years in training would prefer a meaningful job after graduation, not a hand-out. They wish to demonstrate their abilities, and to make significant contributions to their communities.
Under the JG program funded by the federal government, jobs would be delivered locally through non-profits, social enterprise groups and municipalities, and might include provisions for care of the elderly and disabled, education and activity for young people, arts and cultural performances, and initiatives for environmental protection. This job pool would rise and fall counter-cyclically to the needs of the private business sector who would bid from a ready pool of active workers. The Job Guarantee provides macroeconomic stability, and has been successfully tried in other countries such as Argentina where 2 million new jobs were created for low-income heads of households.
A Job Guarantee is more likely to retain public support and less likely to degenerate into a scheme to downsize the social service net.
But in general, there cannot be inflationary pressures arising from a policy that sees the Government offering a fixed wage to any labour that is unwanted by other employers. The JG involves the Government “buying labour off the bottom” rather than competing in the market for labour. By definition, the unemployed have no market price because there is no market demand for their services. So the JG just offers a wage to anyone who wants it.
2. The JG / ELR and Real World Experience
In the aftermath of its economic crisis that came with the collapse of its currency board, Argentina created Plan Jefes y Jefas that guaranteed a job for poor heads of households. The program successfully created 2 million new jobs that not only provided employment and income for poor families, but also provided needed services and free goods to poor neighborhoods.
3. The Job Guarantee: Delivering the benefits that Basic Income only promises
"The BIG proposal is a compassionate but paternalistic policy that does not ultimately
deliver the jobs that those at the bottom of the economic ladder want. The JG proposal
by contrast is based on several core considerations
1) it acknowledges what people want and accommodates those needs;
2) it designs a program that delivers greater macroeconomic stability, and
3) it helps redefine the meaning and nature of work, helping transform the economy
to a more just and humane system.
Larry Kazdan CPA, CGA,
Modern Monetary Theory in Canada