Interp – Job Guarantee means creating an infinitely elastic demand for labor via a legally enforceable right to employment.

Harry Hopkins, the administrator of the New Deal work programs, proposed making permanent job assurance part of the American welfare-state, as a counterpart to unemployment insurance, though this did not eventuate due to political opposition (Hopkins, 1999). Public debate during the Lyndon Johnson administration included discussion of the government as “employer of last resort” as an anti-poverty program (Time, 1967) and Martin Luther King, Jr. endorsed an “Economic Bill of Rights” that would “guarantee a job to all people who want to work and are able to work” (King, 2003: 103). This led to legislation like the Equal Opportunity and Full Employment Bill (1974), which, if enacted, would have created a legally enforceable right to a job, and used the term “Job Guarantee” to describe the program on offer (Hawkins, 1975: 15). Another program described as a “job guarantee” was extended to teenage high school dropouts in a demonstration project in the late 1970s, which Gueron (1984: 5) described as working by “eliminat[ing] any shortage of minimum wage jobs” through direct public jobs and subsidised private employment. By this time, political opinion was turning against the prioritisation of full employment over price stability, but as late as 1978, the US Congress debated and passed the Full Employment and Balanced Growth Act, which directs the US Government to achieve full employment (defined as below 3%) via “reservoirs” of public employment (Ginsburg, 2012). However, one of the bill’s authors, Hawkins (1979), lamented that its directions were being violated within a year of enactment.

Two clear theoretical antecedents of the JG are Pierson (1979) and Minsky (1986). Pierson’s Economic Performance Insurance (EPI) proposed “guaranteeing” specific levels of employment and consumer spending by creating jobs through a permanent “reserve shelf” of public services and works and more traditional pump-priming policies (Pierson, 1979: 86; 89). The “reserve shelf” would comprise public works and services of “intrinsic value”, which could be started and suspended quickly. As with later JG proposals, Pierson (ibid.: 93-94) argued that the EPI would allow full employment (minus “necessary frictional” unemployment of workers moving between jobs) with price stability, as the target levels for jobs and spending would have upper bands as well as lower, encouraging swift government action to curb excess demand and creating expectations of the foregoing. Minsky (1986: 308) proposed “an infinitely elastic demand for labour […] that does not depend upon long- and short-run profit expectations”, and was included in an economic plan to stabilise the fluctuations of the labour market. Minsky (ibid.: 310-312) recommended the resurrection of large government employment programs from the New Deal to employ a total of 9 million workers, but Minsky explicitly did not envisage employing all jobless workers. Nevertheless, so great is the obvious debt the JG owes these proposals, Pierson (1979) and Minsky (1986) should be recognised as the creators of the JG.

The Job Guarantee

The development of the JG can be dated to the late 1990s with the publication of Gordon (1997), Mitchell (1998), Mosler (1997-1998), Forstater (1998) and Wray (1998), regarded by JG advocates as seminal contributions (Juniper, Sharpe and Watts, 2014-2015: 298). All envisaged a state-guaranteed “employer of last resort” as the only effective solution to unemployment, and describe it in similar ways. The government should “offer[…] a public-service job to anyone who wants one” (Mosler, 1997-1998: 167), to “continuously absorb[…] workers displaced from the private sector” (Mitchell, 1998: 549). Such a program would not be discretionary, but would be “bound to hire the […] workers that no other employer is willing to hire” (Gordon, 1997: 828). As with Pierson (1979) and Minsky (1986), these authors see the JG as a force for both full employment and price stability. Mitchell (1998: 548) calls it “the only rational strategy for a government that [issues] a fiat currency and wishes to maximise macroeconomic benefits and price stability”.