Photo by: Dylan Gillis on Unsplash
The neoclassical economic dogma of unemployment being the only reliable way of dealing with inflation is coming apart, and it’s time to start considering a fiscally oriented return to economic policy and a good place to start is with a federal jobs guarantee (FJG).
There is an extensive list of reasons why a FJG is a winning program. For starters, there is the basic point that it would eradicate involuntary unemployment in Canada, an issue which disproportionately affects racialized women the most, followed by racialized men. A FJG would have its baseline annual salary set just above the poverty line and would guarantee no one is unemployed against their will, meaning homelessness and poverty would be greatly reduced. Not to mention federal workers could get the same employment benefits that civil servants and government officials get.
A FJG program’s usual comparative program option is a universal basic income (UBI), but there’s a few reasons to believe that a FJG is superior to UBI. The first being that people tend to want to work. When I took an introduction to macroeconomics course, I was taught that work and leisure should be contrasted as total opposites, but it needn’t be that way. Many people take enjoyment from their work which UBI discounts. Arguments for a universal income often accept other problematic assumptions like that automation necessarily leads to unemployment when it doesn’t need to. Dr. Martin Luther King Jr. was an advocate for a FJG because he thought every American deserves the fulfillment of gainful employment to take care of their needs and develop their skills.
The dimension of productivity a FJG that UBI doesn’t have has other huge benefits as well. Namely, jobs can be created around key areas of deficiency in the market or in areas that the market doesn’t have any interest in, such as cleaning up and preserving national parks. In fact, during the Great Depression lots of federal jobs were created in America and Canada around national park management.
Additionally, a FJG would also act as a guaranteed bargaining chip in favour of workers when in the private labour market. A FJG program’s base wage would function as a wage floor, meaning that employers would have to compete with the insurances and wage benchmark of the federal program. This would have immensely positive ramifications for all workers. Employers would think twice before cutting wages, firing employees and might opt for additional beneficiary measures to attract employees.
But it’s not all bad news for the comparative power of employers when it comes to the effects of a FJG. The structurally unemployed aren’t usually the first choices for employers but if newly hired labour is coming in with an employment safety net, that means that if individuals haven’t been employed for a while they’re likely in a stable enough financial position to do so.
A FJG is frankly a no-brainer when all these aspects are considered in concert.