Right now there are millions of involuntary unemployed in the US--where many economists and policy makers are goose-pimply that we're in the 'best of all possible worlds.' This is not even counting the involuntary part-timers, discouraged workers, homeless, others not in the labor force, mothers without adequate or affordable child-care, persons residing in areas without public transportation that could get them to suburban industrial parks where companies have fled even if they could get a job there, etc., etc. (I leave so many other 'categories' that are comprised of real human beings in dire straights out, but let's get on with the conversation).
At the same time, the 'welfare state' has been 'downsized' with massive cuts in all manner of social spending and public programs, which, for all their faults, did provide at least some kind of safety net that didn't catch everyone, but maybe did make a bit of a difference for some. The move to the right and the 'best of all times' climate has made this politically possible. Meanwhile, while politicians (supported by media reports) are patting themselves on the back for decreasing the 'welfare' rolls, they can't account for where more than half of these people are! with others on draconian 'workfare' programs that pay $2 an hour.
(This is in the US, where the official unemployment rate is lower! Think about the double digit rate countries, e.g. in Europe, where they're signing on to a plan that makes coordinated fiscal and monetary policy tougher, puts limits on deficit spending, and where they have the mutually exclusive goals of running a trade surplus and turning the euro into a global reserve currency! Or countries of Africa under the boot of IMF/World Bank/USAID austerity policies, saddled with truly external debt (denominated in foreign currency), forced into SAPS that have proven not to work--asking the poor to 'tighten their belts'!--and being hoodwinked into the African Growth and Opportunity Act--look it up, it's an AfricaNafta that's going to hurt. Great--we'll have more people working in "19th century labor conditions with 21st century technology" (Jim O'Connor). Krugman and Sachs suggest sweatshops really would be the way to go in countries like Malawi. And Larry Summers says the air quality in Africa is really "vastly inefficiently low"--that means it's TOO CLEAN! But who has time to worry about the status quo and the people with real political power and economic policy influence when we can vent on a few people who support a guaranteed jobs for all program!
Back to the US, where we're basking in the 'new paradigm'. I say the situation at present is unacceptable. But just wait until the stock market bubble pops, there're no exports to prop up demand (Asian crisis), massive consumer debt like we've never seen before--NEVER, want the stats?--unsustainable inventory investment that has to decline, and declining government budget deficits. I know this is controversial for some pkers to get, but in an economy operating with excess capacity and unemployment, BUDGET DEFICITS ARE A SOURCE OF AGGREGATE DEMAND. I'm sure I sound like a crank for taking such a view. Well, when you cut those deficits, and exports can't grow (which is only 'beggar-thy-neighbor' anyway), and private investment can't grow. and consumption can't grow, well...Y = C + I + G + X - M. So when the bubble pops, or whatever sets it off, are we prepared to deal with the situation? Maybe we can all join militias, raiding each other for canned food, or we can blame some group (Blacks? Gays? Iraquis?) for the trouble and deal with a huge recession, debt-deflation, depression, that way.
But again, I'm not even satisfied with the present.
My question to you is: Which of the following do you think is better?
1) A society with no guaranteed employment program engages in a debate about raising the minimum wage (universal health care, shorter work week, etc.).
2) A society with a guaranteed job for all at the present or an initially determined minimum wage engages in a debate about raising the minimum wage (universal health care, shorter work week, etc.).
Agreeing with Bill Mitchell's comments, I have stated in print already--papers available on request--that I believe in a LIVING WAGE. I have also stated that I favor health care as part of the elr. I have no problem with a shorter work week, and have stated that it is in no way incompatible with elr--but I have stated that it is not a substitute for direct job creation.
I also agree with Bill M. about the additional beneficial potential for higher wages as a policy tool to discipline dirty and inefficient firms. The theoretical basis for such a plan, and the explicit proposal for such can be found in Edward J. Nell's PROSPERITY AND PUBLIC SPENDING, Unwin Hyman Publishers, as well as elsewhere. If you want, I'll explain to you, so I won't be accused of just citing literature. I'd really be happy to. It is based on an alternative conception of competition from neoclassical economics, the recognition that firms within an industry are not identical in terms of productivity, etc., and the idea of endogenous technical change. Let me know if you want elaboration.
How should the elr wage be determined? How should any *political* decision be determined? In my opinion by an informed democratic political process. For reasons of pragmatic political strategy, we have taken the position that the debates about other related reforms are better taken place in the context of a guaranteed job for all than to wait to institute a guaranteed job for all until we have solved every other issue. But yes, it could be instituted at a higher minimum, with health care, and these are also similar ways of pressuring the private sector to 'match' the public sector's offer. Am I repeating myself from other posts? Maybe I'm being filtered out by people's e-mail programs.
Mason, in your opinion was the WPA slavery? Was the TVA? Was the CCC? Is John Pierson's FULL EMPLOYMENT and later EPI proposal a support for slavery? Were Hyman Minsky, Wendell Gordon, Adolph Lowe, promoting slavery?
If an unemployed teacher or child counselor were offered a job at a living wage to work with kids in an after school program rather than remain jobless with no other means of support (not everyone is eligible for unemployment insurance, not everyone eligible is on it, it has time limits, etc.), would you consider that slavery? If people could get paid for volunteering for meals-on-wheels, habitat for humanity, neighborhood watch, building a playground, compiling local oral histories, going to school, getting trained in a skill, planting trees, testing water quality, refereeing midnight basketball, etc., would you consider that slavery?
If you have an alternative political economic institutional set-up to contemporary capitalism, I am very willing to discuss it. Bookchin's municipal confederalism, perhaps? Let's talk. Various brands of socialism--say Albert and Hahnel's ideas or other proposals on non-essentialist alternatives to rationalist planning? Some of my favorite topics.
I don't like the name calling, Mason. If you think persons insisting that short term improvements within the present institutional context that can possibly better the present daily lives of real human beings must take priority over or simultaneously accompany discussions of long term social change are 'smug,' then what do you call people who turn their backs on the present and only discuss long term transformation of the system?
Accepting the status quo of massive unemployment and poverty because offering policy improvements within the present institutional context would imply one isn't anti-capitalist enough or anti-state enough--what is that? Accepting the status quo *is* a choice; it is a policy option. Not doing anything is a definite conscious committment approving of the present circumstances. Don't fool yourself into thinking that if you don't take a position, you're free of responsibility. Not taking a position is taking a position--in support of the status quo: massive unemployment, poverty, discrimination, ill health, bulging prisons, etc.
*What is your solution to unemployment? I am convinced there is no solution other than government as employer of last resort to unemployment in modern capitalism.* (my emphasis--rb) The emphasis of my own work has been on the impossibility of maintaining full employment in the face of structural and technological change, changes in labor supply and the supply of natural resources, and changes in the composition of final demand. This is different than the place where Warren Mosler, and Bill Mitchell, and Randy Wray started (not that they started in the same place or offer identical analyses, as Bill M. has constantly had to remind). But I arrived at the same place in terms of the policy conclusion, and their analyses are complementary to my own.
(Personal rant, may want to skip to last paragraph:
And this analysis can be found in my dissertation before I met any of them or heard of the phrase "employer of last resort" or knew the names Warren Mosler or Bill Mitchell (of course I knew of Randy's work on endogenous money). Just as Bill Mitchell's BSE was conceived when he was an undergraduate student. And Randy was discussing these issues with his teacher Minsky, who used the term employer of last resort in his 1986 book, but Minsky himself was employed in the WPA. The utter pomposity and ignorance of people who imply that Paul Davidson and Edward Nell, both of whom have been racking their brains for ways to full employment and price stability and a more equitable distribution of income for decades--since when Warren Mosler was in diapers (or scrubbing swimming pools and doing motel laundary, they might not be that old!)--that they just became interested in these issues! Did anybody ever imagine that people with similar goals come together to discuss their mutual goals and work together for their attainment? That the common or complementary ideas came first? Unlike others who can't imagine giving a non-PhD the time of day, Paul Davidson has demonstrated by his partcipation on this list that he takes everyone's ideas seriously no matter who they are or what their credentials and, agree or disagree, treats everyone equally. Heaven forbid when UTK cuts the funding for the PK workshop that Paul can get funding so one damn non-neoclassical conference can take place! Heaven forbid that students who want to study Marx, Keynes, Kalecki or work on poliicy issues should get a little funding, only ratex or monetarists should get to go through graduate school without working full time! Heaven forbid someone successful in the private sector should care about social problems and put their money behind finding solutions instead of retiring or collecting more toys or worse.)
The only other valid alternative proposal to employer of last resort within the present sociopolitical economic institutional context is a guaranteed minimum income. If anyone wants to discuss the relative merits of elr and gmi, that is a worthy topic. Of course, like universal health care, higher minimum wages, better working conditions, shorter work weeks, etc., gmi is not mutually exclusive from an elr.
But maybe we can't handle discussing a pragmatic policy proposal for full employment that could be implemented tomorrow. Maybe we should have another seminar on how great the aggregate production function is.