A growth-oriented job guarantee bolsters the economy with countercyclical employment, increases demand, and creates sustainable economic growth.

Matt Bruenig criticizes the idea for its lack of clarity.8 He claims that “the flowering of dozens of mutually incompatible proposals that all go under the name ‘job guarantee’ ” suggests that the proposal is more of a rhetorical move than a policy proposal.9 Bruenig is of course right to notice that there have been multiple policies floating around that go by the name of “job guarantee,” but this only indicates interest and affection for the slogan, not some weakness inherent in the motivating ideas. My own feeling is that the interpretation of any policy by the press, the public, and political leaders is more important than the myriad micropolicy mechanisms of any given white paper. A good demonstration of this is how the press has intentionally distorted the meaning of “Medicare for All.” They have done this against both the text of the bills themselves and the myriad and detailed explanations of the utility and cost-effectiveness of the proposal by policy experts. This is to say that distortions of any idea by its opponents remains an intractable political problem, not a policy one. It follows, then, that defining the phrase job guarantee is the business of political campaigners, leaders, and advocates—not policy writers alone. Nevertheless, a survey of contemporary proposals suggests that a job guarantee refers to a set of policies that, when combined, are meant to remedy both structural and cyclical unemployment through direct, state-led employment. Good proposals do this by combining massive public infrastructure projects—thus creating expanded permanent or semipermanent public sector employment—with a more flexible solution for cyclical downturns. In other words, a robust job guarantee combines the “employer of last resort” principle (where the state swells to absorb unemployed workers in periods of recession and contracts during periods of recovery and stability) with an old-fashioned public works program. Good proposals also set a wage floor that is well above the current minimum wage and stem the possibility of downward pressure on wages through prevailing-wage clauses and limitations on redundant jobs. Such a policy also requires the establishment of employment offices and complementary active labor market policies (to fit job-seekers to jobs).

The combination of the employer of last resort model with a public works program is important if a job guarantee is going to both succeed politically and be effective once implemented. The major political weakness of CETA was the liability introduced by so-called make-work jobs, which came to be seen as a symbol of liberal government profligacy. But when we combine countercyclical job creation with a major public works program, the political implications could be positive. The program could demonstrate that jobs generated by the government are not just meant to absorb surplus labor but also perform an independent function valuable to the whole society—like building infrastructure, telecommunications, and public transit. If implemented, the ramifications of a program like this would be massive. Without exaggeration, a job guarantee of the type described here would partially socialize the labor market. And there is still no surer way to move us closer to the achievement of a social right to employment.

Economically, the job guarantee would—by providing income to those who currently have none—greatly raise purchasing power and aggregate demand. This would itself be an engine of economic growth. Yet its economic effects could be even greater if planners use the program as a means of reorganizing the industrial structure of the United States. Massive public investments in manufacturing and heavy industry in particular would not only provide permanent or semipermanent sites of employment; they would also help considerably raise wages across the labor market. Indeed, there is something special about the “secondary sector” as it relates to wages. It’s not a coincidence that maintaining high levels of wage growth depends on significant investments in manufacturing.10 This is largely because, unlike the agricultural and service sectors, manufacturers create durable forward and backward linkages in the economy and, in advanced economies, produce high-value-added goods in firms with large profit margins.11 And while the private sector is unwilling to invest in manufacturing, there is no reason the public sector cannot do so—and do so to great effect.