Monday, March 10, 2014

circuit — When the Fed supported a Job Guarantee policy (and the economist who made it happen)


Must read. I had completely missed this.

Congratulations on the birth.

Fictional Reserve Barking
When the Fed supported a Job Guarantee policy (and the economist who made it happen)
circuit

3 comments:

circuit said...

Thanks Tom.

Dan Lynch said...

Thanks for posting this, I like learning more about the evolution of economic ideas.

That said, these old school JG'ers share the same hangups as today's JG'ers -- they have no specific plans for creating meaningful jobs out of thin air, and instead their JG is motivated primarily by their conservative moral values.

Burns: "offering public employment -- for example, in hospitals, schools, public parks, or the like"

Uh.... EXACTLY what would JG workers do in hospitals, schools, and parks that is not already currently being done?

Is there a shortage of orderlies or nurses aids? No.

Is there a shortage of teachers or teacher's aids? No.

Is there a shortage of park maintenance workers? No.

However, there is often a shortage of FUNDING to hire nurses aids, teachers, park maintenance, etc.. We don't need another government program, we just need to fund existing programs.
workers. That would create jobs, no JG necessary.

Attempting to shoehorn JG temps into existing government programs like hospitals, schools, and parks would likely result in displacing existing permanent positions and driving down wages.

My counter proposal: make a list of public purpose things that need to be done, and hire people to do them. They need not be temp jobs or minimum wage jobs or even government jobs -- in some cases it may be fine to outsource the work to private contractors.

I.e, maintain hiking trails on public lands. You could either outsource to contractors (which is how it is currently done, but constrained by funding) or create summer jobs for young people to maintain trails.

I.e., formal studies on wolves in in Idaho. You could either contract with a wildlife biologist or else hire a wildlife biologist as a government employee. Instead of paying minimum wage, you pay the going rate for wildlife biologists.

What I'm trying to say is that it makes more sense to create jobs that fill a specific need, and pay the going rate for that type of work, instead of creating make-work jobs out of thin air and paying minimum wage.

Then there is the question of who determines what these public purpose needs are. JG advocates sweep this question under the rug but it's a huge, huge issue. According to our system of government, the proper way to determine the needs is to have Congress decide, not to delegate to bureaucrats or heaven forbid, to NGO's.

And if Congress has to decide, then it's not really a self-regulating job program, is it?



Tom Hickey said...

One way to handle UE with a buffer stock is have government hire the unemployed at their former compensation until they are hired back by the private sector. Problem solved. The government could use them in their job capacity if there was a need, or not if there was no need. They could be provided training to keep them up to speed.

That way firms could have a flexible wage bill without disrupting income-generated demand, and government would have a pool it could draw from, too.

Start there and innovate on it.