A job guarantee makes monetary policy more effective – allows the Fed to focus on combating inflation without creating unemployment

Improving workers livelihoods as the Federal Reserve manages its dual mandate. As noted above, the Federal Reserve has a dual mandate—maximum employment and price stability. Through its use of monetary policy, the Federal Reserve plays a vital role in promoting full employment; however, monetary policy has proven insufficient for eliminating involuntary unemployment. Historically, the Federal Reserve has had a significant role in increasing unemployment as a result of combating any inflationary pressures that may exist in the economy. With a job guarantee policy in place, the Federal Reserve can conduct monetary policy without promoting rising levels of unemployment. In this scenario, the job guarantee program can maintain employment and consumption expenditures while the Federal Reserve employs monetary policy to reduce private investment in order to cool the economy. Thus, U.S. workers would be less vulnerable to the Federal Reserve not adhering to their responsibility of a dual mandate appropriately due to their cultural over-emphasis—a function of their close ties to the financial sector—on price stability.