EconoMonitor

Great Leap Forward

How to Eliminate the Scourge of Unemployment: Jobs Now at a Living Wage

It is amazing no one has thought of this before. Seven years after the GFC began, we’ve still got up to 25 million people who want jobs but cannot find them. Of course that’s far more than the official unemployment numbers—which don’t count anyone who worked just an hour or so, or who gave up looking altogether.

Gee, I wonder how on earth we can find a solution to joblessness, or to low pay? It is all so complicated. How can we stroke the business class in just the right way to get them to create a job or two? How can we prevent our corporations from taking jobs abroad?

Should we slash “guv’ment” regulations to raise the spirits of our business undertakers? Maybe we should just eliminate minimum wages so that they can afford “expensive” American labor? Then we could compete with Viet Nam.

Or slash taxes to boost the supply side?

Or maybe we should just throw-in the towel and admit that we’ll never solve the problem of unemployment? Just throw more welfare hand-outs at the jobless? Expand the dependent classes to include more of the able-bodied. Admit that our Captains of Industry as well as our Public Stewards have failed us. We have created a dysfunctional social system that cannot provide jobs to those who want to work.

As Hyman Minsky put it a half-century ago, providing welfare rather than jobs is “a conservative rebuttal to an ancient challenge of the radicals, that capitalism necessarily generates ‘poverty in the midst of plenty’”.

Rather than paying people not to work, Minsky proclaimed we must pursue an alternative: ““We have to reverse the thrust of policy of the past 40 years and move towards a system in which labor force attachment is encouraged. But to do that we must make jobs available; any policy strategy which does not take job creation as its first and primary objective is but a continuation of the impoverishing strategy of the past decade.”

Here’s an idea: why not create jobs with decent pay? Now, why didn’t anyone ever think of that before?

Put people to work doing socially useful things. Take workers as they are, design jobs that they are able to do. Offer a high enough wage with good, supportive working conditions so that no one would take the demeaning and low paying jobs that the private sector creates. If the private sector wants to compete, it will have to pay more and provide more interesting and fulfilling work.

Here are three links to recent posts. First, a nice article by Bryan Williams, who seems to be familiar with the Job Guarantee/Employer of Last Resort proposals we’ve been pushing since the mid 1990s (note the link to a CFEPS article on the Jefes program in Argentina):

http://www.salon.com/2014/09/01/the_rights_jobs_debacle_heres_how_to_bring_unemployment_down_to_zero/

Here’s a valiant effort by Lambert Strether to promote the Job Guarantee:

http://www.nakedcapitalism.com/2014/09/labor-day-human-labor-human-rental-human-gift.html#comment-2300448

Note the typical accusations raised: “make work”! (as if burger-pushing jobs are not “make work”); “low pay” (as if burger-pushers—and those without jobs–are well-paid); as well as the ridiculous claim that “everyone hates to work” and the even sillier “let’s just pay everyone to stay home and be creative”.

I think the commentary says a lot more about the personal issues of the commentators. Some still seem to have a lot of “mommy issues” forty years after potty-training experiences.

And, finally, the following is a brilliant proposal: Just a $3 raise makes a living wage!

http://www.etonline.com/news/148831_kristen_bell_plays_mary_poppins_funny_or_die_parody/

In truth, $3 is probably not enough. Let’s double that and start talking about a Job Guarantee that starts next month at $14 per hour, available to anyone who wants to work, doing work to benefit their communities. Decentralize administration. Create good working conditions. Promote creativity. Let a thousand flowers bloom.

See if Burger King and Walmart can compete with that.

2 Responses to “How to Eliminate the Scourge of Unemployment: Jobs Now at a Living Wage”

Steve ClaySeptember 13th, 2014 at 9:35 am

You might check out this wage subsidy scheme where anyone could create a living wage job (not just the govt). The author’s preferred wage was 280/wk but almost any reasonable wage should work.

http://www.mrclay.org/2013/12/19/we-should-probably-replace-the-minimum-wage-with-a-wage-subsidy/

I found your blog through your post on BIG and agree fully that prices would very soon eat up any universal grant. What I think could work would be a grant that increases with age starting at 40 or so, like SS but always increasing.

L. Randall Wray L. Randall WraySeptember 15th, 2014 at 8:41 pm

wage subsidies become employer give-aways and do not lead to job creation–just worker subsitution. They still might be desired, but don’t count on them to reduce unemployment or raise wages.