Job guarantee

A job guarantee (JG) is an economic policy proposal aimed at providing a sustainable solution to the dual problems of inflation and unemployment. Its aim is to create full employment and price stability, by having the state promise to hire unemployed workers as an employer of last resort (ELR).

The economic policy stance currently dominant around the world uses unemployment as a policy tool to control inflation; when cost pressures rise, the standard monetary policy carried out by the monetary authority (central bank) tightens interest rates, creating a buffer stock of unemployed people, which reduces wage demands, and ultimately inflation. When inflationary expectations subside, these people will get their jobs back. In Marxian terms, the unemployed serve as a reserve army of labor. By contrast, in a job guarantee program, a buffer stock of employed people (employed in the job guarantee program) provides the same protection against inflation without the social costs of unemployment, hence potentially fulfilling the dual mandate of full employment and price stability.

The job guarantee proposal is particularly associated with certain post-Keynesian economists, particularly at the Centre of Full Employment and Equity (University of Newcastle, Australia), at the Levy Economics Institute (Bard College) and at University of Missouri – Kansas City including the affiliated Center for Full Employment and Price Stability.

JG draws from a social justice tradition of right to work, such as the United Nations Universal Declaration of Human Rights and the US Employment Act of 1946, and an early form was proposed by Hyman Minsky.

...
Wikipedia