Link turns assume wage coordination mechanisms that would never materialize under capitalism. If they can solve the economy and reduce inflation, that proves the link!

There is a fundamental contradiction at the heart of contemporary iterations of the JG proposal. The JG cannot accomplish price stabilization and wage restraint functions while also advancing working class power by removing the reserve army of labour and increasing worker bargaining power. As Wray points out, Minsky makes a distinction between moving towards full employment and maintaining full employment.38 Minsky contends that, for the most part, the former has produced inflationary pressures (particularly through incentives for private investment and generalized growth promotion) whereas little evidence suggests that maintaining low or full employment in his model would be inflationary.39 He and Wray both predict that the political shock of the program’s implementation will cause some price inflation, but they maintain that the dynamics of the JG program would be such that full employment could become a feature of the regulated capitalist labour market without driving inflation. This prediction is based on the assumption that a tight full employment labour market will also generate a dynamic wherein wages rise faster in the lagging sectors than in the leading sectors of the economy, which will help balance any inflationary pressures brought on by full employment.40 The problem with this, as Minsky himself recognizes, is that institutional mechanisms would be required to maintain wage restraint in higher wage and more productive sectors while wages were encouraged to outstrip growth in lower wage sectors.41 This lesser-noticed aspect of the proposal is markedly similar to the Swedish “wage solidarity” scheme, which had coordinated sectoral collective bargaining as its prerequisite.42 In the United States, with its decentralized bargaining system and much lower union density, no institutional mechanisms exist to play this wage-coordination role. Were a feasible JG to be implemented, it is likely that its base wage would have to be kept low and be coupled with some form of incomes policy. Even with sectoral bargaining or an incomes policy of some sort, it is questionable whether or not the conditions of a JG with rising wages in the lower rungs of the income distribution would hold, as the unravelling of centralized bargaining in the Swedish case partially indicates.43

Thus, the argument that a JG could be used to augment working class power seems to run aground on the idea’s conceptualization as a wage floor that does not encourage private sector wage demands. In other words, under present political conditions, it seems likely that it would simply be another way in which to pool the reserve army of the unemployed in a way that does not meaningfully change the composition of class forces. It seems that a job guarantee is no technocratic fix to the political problem of strengthening organized working class power.