A Tree Planting Alternative for the Jobless
by John Lawrence
Modern Monetary Theory (MMT) proposes a Job Guarantee (JG) program that would employ the unemployed instead of just paying them unemployment insurance. This would be an automatic program whose numbers would very according to those employed in the private sector. When the private sector is supplying lots of jobs, the number in the JG would diminish and vice versa. So why not employ all those in the JG planting trees? This in no way competes with the private sector and doesn't require training or any skills whatsoever. The homeless could do it; the prison population could do it. The unemployed could do it. The pay would provide an automatic minimum wage, and the economy would be fully employed. There would be no wage inflation because people in the JG would not be competing for jobs with people employed in the private sector. When the private sector needed more workers, they could hire them out of the JG. Because these workers are employed, their work skills will not diminish like those sitting idle doing nothing but collecting unemployment insurance.
Conventional economic theory is based on the Philips curve which predicts that there must be a certain number of unemployed people in order to tamp down inflation. The inflation rate is contained based on the misery of the necessary number of unemployed people who are historically from minority communities. MMT replaces the Philips curve with an analysis that predicts that inflation can be contained and a full employment economy can be achieved because JG workers are not competing with those employed in the private sector, and, therefore, there is no wage inflation. Those workers are available for hiring out of the JG by offering them slightly more than the minimum wage which is set automatically by the government by the pay offered to those in the JG which would be a living wage, in other words enough so that they are above the poverty level. Therefore, a number of birds are killed with one stone. 1) The minimum wage is automatically set at the Federal level. 2) The unemployment compensation program and the money budgeted for it can be eliminated. 3) A full employment economy is achieved. 4) Climate change is addressed. 5) People's job related skills are not diminished as they would be if they were sitting idle.
This is from the Modern Monetary Network:
"A government job guarantee is a proposed program where the government would provide a job with a basic wage and benefits package to anyone willing and ready to work. The job guarantee is one component of an overall program to stabilize an economy. The job guarantee is financially feasible when a sovereign government’s currency uses a floating exchange rate.
"The job guarantee provides a floor for wages and benefits, creating a buffer stock of labor. The program is intended to “hire off the bottom,” i.e. those with less qualifications or skills. A job guarantee program hires people who otherwise cannot find employment. Once implemented, a job guarantee would be a permanent program, operating during good times and recessions alike.
"In times of recession, private sector employers typically lay off workers. This swells the ranks of the unemployed. Laid off workers cannot spend money, and this hurts the economy. With a job guarantee in place, laid off workers could take a job guarantee job. This would increase the size of the job guarantee workforce during recessions, and at the same time inject more money into the economy, helping to take the edge off of the recession. As the economy recovered, people would leave their job guarantee jobs and go to better-paying private sector jobs. As the number of people in the job guarantee workforce diminished, government spending would also fall.
"The job guarantee would also serve as a mechanism to ensure price stability within the economy by fixing the price of employed labor.
"The concept of a job guarantee dates back to at least the New Deal of the Roosevelt Administration. There were several programs that had job guarantee attributes, such as the Civilian Conservation Corps (CCC), and the Works Progress Administration (WPA). After the Second World War, many industrialized economies embraced full employment. For example, Australia had an implicit buffer stock of jobs that were always available, both in the private and public sectors. Hyman Minsky also conceptualized an Employer of Last Resort (ELR) program during the 1960s. Most recently, L. Randall Wray, William Mitchell, and Warren Mosler have proposed a job guarantee program in conjunction with their work in Modern Monetary Theory (MMT)."
So why not address climate change this way? There are never enough trees on planet earth, Workers in the Civilian Climate Corps (CCC) will never run out of work. The state governments will never have to pay unemployment compensation again, and the private sector will have a buffer stock of already employed working people to choose from when their needs arise for an increased work force. In effect the Federal government will take over the responsibility for unemployment insurance relieving the states of this burden.
