The jobs guarantee: a Post Keynesian analysis

Abstract

This paper analyzes the notion of a jobs guarantee (JG) that is bestowed on each individual as a right of citizenry. Central to a JG economy is the notion that full employment with inflation control is both possible and desirable. Unlike a liberal economy, which has used the deficiency of demand over the last two decades to manage price stability, a JG economy controls inflation by manipulating the ratio of employees that are in the private labor sector vis-à-vis the elastic public labor market. The JG labor sector, unlike the private labor market, is underwritten by the state acting as an employer of last resort. The paper makes a case illustrating that although a JG economy is superior to a liberal economy, political impediments would render the scheme inoperative, owing to organized labor's resistance to how a JG economy (1) controls inflation and (2) stabilizes balance of payments disequilibrium. The paper concludes with an alternative examination illustrating that full employment with inflation control is possible, though only if certain post-liberal institutions are established. Post-liberal institutions are a prerequisite, in other words, if full employment and price stability are to be achieved.

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