FJG stabilizes the business cycle -macroeconomic effects positive

(Mark Paul is an assistant professor of economics at New College of Florida and a fellow at the Roosevelt Institute. William Darity Jr is the Samuel DuBois Cook professor of public policy, African and African-American Studies, and economics; and the director of the Samuel DuBois Cook Center on Social Equity at Duke University. Darrick Hamilton is associate professor of economics and urban policy at the Milano School of International Affairs, Management and Urban Policy and the Department of Economics, New School for Social Research.https://www.jacobinmag.com/2017/02/federal-job-guarantee-universal-basic-income-investment-jobs-unemployment/)

A FJG would bring us much closer to actual full employment, not the neoclassical full employment that subjectively allows for some optimal frictional unemployment. Most contemporary economists rely on the non-accelerating inflation rate of unemployment (NAIRU) to calculate this less-than-full full employment artificial statistic which functions as a disciplinary tool of the bourgeoisie, but this, according to Roger Farmer is “an idea past its sell-by date.” By full employment, we mean simply that everyone seeking a job gets one. We’d wager that if you asked the average American what full employment means to them, they’d give you a similar answer — a job for all. Indeed, a plurality of Americans will also tell you they support a FJG. The UBI would likely still leave a substantial segment of the population in poverty. As Belgian philosopher Philippe Van Parijs, one of the most prominent UBI advocates, acknowledged, even a large payment through the UBI won’t necessarily secure a comfortable living for all citizens. How about those without jobs, or those who earn below subsistence wages? Of course, a UBI coupled with a non-poverty wage option and strong unionization could seriously combat poverty. The UBI would eliminate the effective minimum wage of $0 currently offered in the United States, though it would fail to provide adequate employment for all that demanded it — a crucial shortfall of such a program. A FJG is a sounder mechanism to combat structural inequalities, for instance through closing the persistent unemployment gap experienced by stigmatized groups who face continued discrimination. (Note, since 1972 unemployment has average double digits for black workers and has never fallen below 7 percent — a level that is only reached during times of economic crisis — for white workers). Further, the FJG will have a strong macroeconomic stabilization effect. During economic downturns, it would expand and hire more people; it would then shrink during economic boom periods as people move from public to better-paying private employment. Pavlina R. Tcherneva, a leading voice on the FJG’s macroeconomic effects, argues that policies like the UBI have no counter-cyclical features. Thus, when the economy takes a downturn — say as it did in 2007 — basic incomes provide no automatic stabilizers to right the sinking ship. This is good for the economy as a whole. Rather than expanding the unemployment insurance rolls during economic busts, the FJG would put folks to work and moderate the business cycle. Federal workers’ paychecks will increase demand, which will increase economic growth. Many economists agree that today’s secular stagnation — insufficient demand — is contributing to continued “lackluster” growth after the Great Recession. Only modest upticks in growth for the foreseeable future will come if we continue the status quo.