Victor Hugo once remarked: “You can resist an invading army; you cannot resist an idea whose time has come.” Today, in the United States, a job guarantee seems just such an idea. Progressives of all shades – from Cory Booker to Bernie Sanders – have embraced policies that to varying degrees say the state should seek to do away with involuntary unemployment. This is a welcome return to a politics of work, which has been missing for too long from advanced economies. It is also heartening that polls suggest the job guarantee is popular, with half of voters backing it. This seems starkly at odds with America’s apparently low unemployment figures. The reality is that the unemployment rate only counts those who are actively seeking employment, missing out the millions not seeking work altogether. When those people are included too, it turns out that about one in seven working-age men in the US are actually jobless. The cumulative effect on communities is a layering of despair. A job guarantee offers hope in what for many are desolate times.
Ministers in Britain might dismiss such a policy here, claiming the UK is a jobs factory where more people are employed than ever before. But this disguises a widespread reality of low-paid, insecure work. Job insecurity is also likely placing downward pressure on pay growth. For the first time in British history, rising GDP no longer assures better pay in the economy. Despite ministerial rhetoric, the government is a long way from delivering the jobs people want and need. That is why Britain too could benefit from a “job guarantee” policy – one that could offer a secure job at a living wage to anyone who wants to work but cannot find employment. This policy would secure a basic human right to engage in productive employment. It also tackles three key sources of economic injustice – unemployment, precarious work and poverty wages. There are significant economic, personal and social costs to the current economic model. These include social exclusion, the wanton undermining of human relations, and the loss of output.
Last month one of the US academics in the thick of Democratic debates, Fadhel Kaboub, outlined persuasively a UK job guarantee scheme at London’s City University. The speech was a welcome departure from the current damaging orthodoxy that sees inflation controlled using restrictive monetary and fiscal policies coupled with a cushion of high levels of unemployment and underemployment. Instead, Professor Kaboub called for deficit spending – along with private demand – to ensure that all workers who want to work could find jobs. He made the case, which has the virtue of being true, that since the UK could issue its own currency to purchase idle resources there is no real constraint to its spending. While the financing would be national, jobs can be offered by locally viable projects selected on the basis of community needs. Work in environmental clean-up or social care would not displace private sector jobs – they would only offer employment under-supplied by the private sector. The complaint that such spending would be inflationary should be discounted because any restructuring of relative wages would be a one-off event.
The idea that in the jobs market supply creates its own demand is demonstrably faulty; instead we have ended up in a nightmare scenario where part-time, casualised work grows while secure public sector jobs shrink. The government ought to reassert itself as an employer of last resort to absorb economic shocks. This is an urgent need as an industrial wave of automation and artificial intelligence crashes on our shores. The World Bank has foolishly put forward the idea that further eroding workers’ rights is the right way to cope with the impact of technological change. This race to the bottom ought to be avoided. The shift will indeed create unemployment. But how many are affected, how long they stay unemployed, and how hard it is to find jobs is determined by demand in the economy. The government must take social and economic responsibility to deal with such issues with human-centred, not profit-focused, policies such as a job guarantee.
