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Politics

How to deal with unemployment - Seems pertinent to MT

Posted: Oct 29th, 2017 - 8:34 am

"The employer of last resort (ELR) policy proposal, also referred to as the job guarantee or public sector employment, is promoted by its supporters as an alternative to unemployment as the primary means of currency stability. The core of the ELR proposal is that a job would be provided to all who wanted one at a decent, fixed wage; the quantity of workers employed in the program would be allowed to rise and fall counter to the economy’s cycles as some of the workers moved from public to private sector work or vice versa depending upon the state of the economy. Supporters have played an important advisory role in Argentina’s Jefes de Hogar jobs program that has provided jobs to over two million citizens – or five percent of the population; though there are some important differences, the Jefes program has many similarities with the ELR proposal (Tcherneva and Wray 2005).

While ELR proponents argue the program would not necessarily generate budget deficits (Mitchell and Wray 2004), the program is based upon Abba Lerner’s (1943) concept of functional finance in which it is the results of the government’s spending and taxing policies in terms of their effects upon employment, inflation, and macroeconomic stability that matter (Nell and Forstater 2003). This is in contrast to the more widely promoted concept of “sound” finance, in which the presence of a fiscal deficit is itself considered undesirable. Rather than not being able to “afford” an ELR program, ELR proponents argue that societies would do better to consider whether they can “afford” involuntary unemployment. The proposed ELR’s approach of hiring “off the bottom” is argued to be a more direct means for eliminating excess, unused labor capacity than traditional “military Keynesianism” or primarily “pump-priming” fiscal policies, particularly given how the U.S. economy struggles to create jobs for the poor even during economic expansions (Pigeon and Wray 1998, 1999; Bell and Wray 2004). As Wray (2000) notes, “How many missiles would the government have to order before a job trickles down to Harlem?”. More traditional forms of fiscal stimulus or stabilization are still useful and complementary to an ELR program, though proponents argue that only the latter could ensure that enough jobs would be available at all times such that every person desiring a job would be offered one while also potentially adding to the national output."Steve Grumbine

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