Job Assurance - the Job Guarantee Revisited

By Gordon, Wendell | Journal of Economic Issues, September 1997 | Go to article overview
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Job Assurance - the Job Guarantee Revisited

Gordon, Wendell, Journal of Economic Issues

The employment problem needs to be divided into two parts: the problem as it applies to those ready, willing, and able to work, and the problem as it applies to the handicapped. This article concerns itself with those able to work, rather than with the handicapped, who remain a serious problem in their own right. The job guarantee does not solve all problems. It does not solve the problems of the handicapped. But it does give major relief in a major problem area without, I believe, having adverse effects in other major problem areas such as those involving the handicapped.

It is worth noting that the job guarantee is not the same thing as requiring an unemployed person, who appears at the welfare office hoping for assistance, to go somewhere to perform some assigned menial work before he/she can obtain the needed assistance. There is a difference between a dignified solution to a problem and a degrading temporary quick fix. We should beware of what the politicians call "work-based welfare reform."

John Dewey once wrote: "The first great demand of a better social order, I should say, then, is the guarantee of the right, to every individual who is capable of it, to work - not the mere legal right, but a right which is enforceable so that the individual will always have an opportunity to engage in some form of useful activity, and if the ordinary economic machinery breaks down through a crisis of some sort, then it is the duty of the state to come to the rescue and see that individuals have something to do that is worthwhile - not breaking stone in a stoneyard, or something else to get a soup ticket with, but some kind of productive work which a self-respecting person may engage in with interest and with more than mere pecuniary profit" [Dewey 1939, 420-421].

Philip Harvey in his Securing the Right to Employment [1989] has identified several past efforts to establish a job guarantee program, or a respectably close approximation thereto. Early in fall 1933, Harry Hopkins's Civil Works Administration (CWA) provided for a massive public works program sponsored by leaders who talked of offering the unemployed real jobs paying good daily wages and doing useful work that suited their individual skills. But the CWA was temporary [Harvey 1989, 101-2].

Similar effort was made in the Emergency Relief Appropriation Act of 1935. In addition to the stimulation of private employment, there was provision for public employment for those able-bodied workers whom industry could not employ at a given time. But this program, the Works Progress Administration (WPA), was dropped during World War II when there was no general unemployment problem to worry about [Harvey 1989, 18].

Since World War II, serious effort to deal with the unemployment problem has been based upon the Keynesian tool of fiscal stimulation and trusting in the multiplier process. The unemployment problem has seldom been addressed via a job guarantee or job assurance program. This represents a change in emphasis by economists that has not led to fruitful results.

Philip Harvey described the change of approach in writing about the circumstances involved in the adoption of the Employment Act of 1945:

A bill designed to secure the fight to employment was drafted, however, at the initiative of Senator James Murray (D-Montana). Significantly, it did not adopt the NRPB [National Resources Planning Board] strategy for the achievement of full employment, but instead called for the adoption of a sufficiently expansive fiscal policy to ensure the availability of private sector jobs for everyone seeking work.

This shift in strategy is significant. It reflected the growing ascendancy of Keynesian economists over their institutionalist counterparts in the formation of liberal social welfare policy in the late New Deal period. The NRPB's report, with its emphasis on economic planning and structural economic reforms, was the last hurrah of the New Deal Institutionalists.

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