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View Diary: The Job Guarantee and the MMT Core: Part Four, John Carney on the Mismatch Problem (5 comments)

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  •  That's a nice point about outsourcing (2+ / 0-)
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    Ian S, Letsgetitdone

    Capital is far more mobile than labor, especially in today's world.  If there were simply a mismatch between the labor that capital wishes to purchase and the labor available in the place where capital happens to reside, then the capital will move itself to where the labor supply meets its needs.  The fact that there are still unemployed in an era of near infinite capital mobility shows that the core issue of employment is not a regional mismatch between the skill sets of employees and the needs of employers, but that there exists a group of potential workers whose labor is simply not demanded, regardless of their skills.  

    Still, rather than a Job Guarantee, I'd prefer something more like a livable income guarantee tied to enrollment in some sort of accredited degree program, vocational or otherwise.  It solves the problem of what work you'd have the Job Guarantee enrollees doing (educating themselves) and preserves the demand stimulus of maintaining a basic livable income for everyone.  And it preserves the flexibility of the labor force so that mismatches can't really occur even at the margins.

    From such crooked wood as that which man is made of, nothing straight can be fashioned. -Immanuel Kant

    by Nellebracht on Mon Jan 09, 2012 at 09:40:36 PM PST

    •  I like that proposal (1+ / 0-)
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      Nellebracht

      But I'd offer it in addition to the JG. The reason why is that some people just want work to do. Don't want what they consider 'charity," and alo don;t want education. Also the Government has many projects to do which need to be funded by deficit spending on a counter-cyclical basis. The counter-cyclical function of the JG as an automatic economic stabilizer is very important. A BIG does that to some degree, but a BIG would be very negative psychologically for some people in America who would rather have work they can point and that can transition them to private sector jobs.

      I'm all for BIGs for people who think they'rd entitled to that and have a perfect right to that. I think they a right to it myself. But may people don;t agree and don't want a BIG for themselves, so, again, I think they should have the alternative of work.

      Finally, I like your point about the mismatch fallacy a lot, too. It's very important in the context of Carney's obvious bias toward not disturbing international "free" trade.

      •  Well, that's part of why... (0+ / 0-)

        I would tie it to enrollment in some sort of accredited degree program.  It's not charity because you still have to do something to get it, or at least, it's no more charity than a JG is.  And, I would argue, a guaranteed income tied to ongoing self-improvement is socially better and psychologically more acceptable than a guaranteed "job" that's only created as an excuse to guarantee someone an income.

        As for the projects that need to be deficit funded on a counter-cyclical basis, I assume you mean things like infrastructure projects and the like.  These things can still be funded in the same way and on a counter-cyclical basis, but you won't have to worry about JG enrollees doing the work of existing government employees or taking work from potential private contractors.  This is important because if you have JG enrollees doing work that would otherwise be done by government employees or private contractors, you're going to have conflicts between the JG and public/private labor unions.  After all, it was conflicts with labor unions that ultimately killed the WPA.

        Basically, both a JG and a BIG like I envision are appropriately counter-cyclical, but my BIG is much more counter-cyclically stimulative because you'd still have to hire private contractors or more public employees to do the projects that the government and people would like to see done.  And a government might decide they just don't want to do those projects, but the JG enrollees are still getting their paychecks, essentially becoming enrolled in a BIG, but without keeping them trained or competitive for re-entry into the private workforce.  And then there's the question of whether even the government can find enough work for all the people who are currently unemployed.

        Now I'm rambling again, but as I see it, it comes down to which sort of program you think has the potential to be more productive, both in itself and in the downstream economic production that's stimulated in response to it.  I think a BIG tied to enrollment in ongoing re-training and education is far more valuable for a society, both in a political sense of having a well-educated citizenry and in an economic sense of having a highly trained and adaptable labor force.  A JG at best can only mitigate the drain on training and adaptability that occurs due to unemployment, and there's no guarantee that the skills required for the JG job will match up at all with the skills demanded by the private workforce.  In short, a JG is a program that is merely defensive against economic downturn and unemployment.  But an IGTTE (income-guarantee tied to enrollment) is proactive in not only protecting against economic downturn and unemployment but in setting up the conditions necessary for the next phase of growth.

        From such crooked wood as that which man is made of, nothing straight can be fashioned. -Immanuel Kant

        by Nellebracht on Tue Jan 10, 2012 at 10:38:33 AM PST

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