A FJG would accelerate inflation by stimulating demand

Further agreement between our recommendations and the job guarantee is that the ambition of job creation strategies should go beyond hitting the target of macroeconomic full employment at the national level—even if people committed to pushing the lower bounds of unemployment are defining this target. That is, there is almost surely some national unemployment rate (4 percent? 3 percent? lower?) at which further stimulus to aggregate demand could lead to accelerating inflation. Should we just stop there (what I’m calling macroeconomic full employment) and declare concern about jobs addressed? Definitely not. Instead, by deploying public investments strategically, we should be able to lean harder on (targeted) fiscal stimulus and less hard on (across-the-board) monetary stimulus to make sure that national full employment is spread more evenly across communities. If, for example, it turns out that macroeconomic full employment nationally is 3 percent (don’t laugh, —and making sure we know how low it can sustainably go is a key part of our job creation recommendations), then it’s possible to hit this 3 percent rate nationally, but in a way where some communities are at more-than-full employment while other communities face substantially higher joblessness. To put it too simply, when we’ve hit the target national unemployment rate of (say) 3 percent, we’d like it to be 3 percent in both (say) Seattle and Detroit, rather than 2 percent in the Seattle and 4 percent in Detroit.