Archive for the ‘Employment’ Category

Tcherneva and Wray on the Public Service Employment (PSE) Program

Michael Stephens | August 15, 2018

The job guarantee proposal fleshed out and analyzed by L. Randall Wray, Flavia Dantas, Scott Fullwiler, Pavlina Tcherneva, and Stephanie Kelton — dubbed the Public Service Employment (PSE) program — garnered a considerable amount of media attention as support for some version of a job guarantee began appearing on the agendas of various 2020 Democratic hopefuls. This panel discussion at the Levy Institute’s 27th Annual Hyman P. Minsky Conference, featuring Tcherneva and Wray along with critical engagement from John Henry, provides more background on the rationale behind the PSE proposal as well as its potential economic impact:

 

Video from all the panels at the Minsky Conference can be found here.

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The Job Guarantee and the Economics of Fear: A Response to Robert Samuelson

Pavlina Tcherneva | May 25, 2018

The Job Guarantee is finally getting the public debate it deserves and criticism is expected. Building on several decades of research, the Levy Institute’s latest proposal analyzes the program’s economic impact and advances a blueprint for its implementation. Critics have taken note and are (thus far) restating the usual concerns, but with a notably alarmist tone.

The latest, courtesy of the Washington Post’Robert Samuelson, warns that the Job Guarantee would be 1) an expensive big-government takeover, 2) unproductive and impossible to manage, 3) dangerously disruptive to the private sector, and 4) inflationary.

Samuelson wants us to be afraid—very afraid—of big government. But he forgets that we already have big government—one that devotes hundreds of billions of dollars, time, resources, and administrative effort to deal with all the economic and social costs of unemployment, underemployment, and poverty.

Unemployment is already paid for. In this context, the program does not increase the government’s costs—it reduces them—while also cutting costs to households and firms and creating real actual benefits by supporting families, communities, and the economy. As David Dayen points out, whether we can afford the Job Guarantee is not up for debate.

Will the Job Guarantee create impossible-to-manage make-work projects? This is a fear that James Galbraith—a self-proclaimed former skeptic of the Job Guarantee—calls “an admission of impotence and a call for preemptive surrender.” Kate Aronoff recalls that New Deal projects were often derided as boondoggles. Still, they rebuilt communities, the economy, and people’s lives, while leaving a lasting legacy.

The Job Guarantee is subjected to a unique double standard for managerial efficiency. We never hear objections to going to war, “nation building,” or bailing out the financial sector on the grounds that these efforts would be an “administrative nightmare.” And yet our proposal to put our underutilized labor force to productive use, by using much of the existing institutional infrastructure in the nonprofit and state and local government sectors is dismissed as an impossibly difficult task.

The claim that the Job Guarantee is unproductive misses another basic point: unemployment is inherently unproductive. What is the productivity of an unemployed person and her family struggling to make ends meet, compared to her productivity when she is employed in a public service job with decent pay? continue reading…

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On the Costs of Doing Without a Job Guarantee

Michael Stephens | May 1, 2018

Pavlina Tcherneva — who, along with L. Randall Wray, Flavia Dantas, Scott Fullwiler, and Stephanie Kelton, authored this report estimating the economic impact of a job guarantee proposal (the Public Service Employment program) — was interviewed by Bloomberg’s Joe Weisenthal and Julia Chatterley about the purposes and costs of the plan.

This recently released policy note by L. Randall Wray also takes on some of the criticisms raised by the interviewers, in addition to seeking a consensus among the job guarantee proposals emanating from progressive think-tanks.

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Watch Live: A New New Deal and the Job Guarantee

Michael Stephens | October 27, 2017

Today at the New School, L. Randall Wray and Stephanie Kelton take part in a public workshop organized by the National Jobs for All Coalition that is focused on developing a “A New ‘New Deal’ for NYC and the USA.”

Wray and Kelton will be sharing initial findings from an upcoming Levy Institute project that proposes a universal job guarantee for the United States. The program would create nearly 20 million jobs that pay $15 per hour plus benefits, raising national output by over $500 billion annually, stimulating the private sector to create more than 3 million additional jobs. Using standard simulation models, the study finds that impacts on inflation would be negligible, while state and local government budgets would improve by $60 billion annually and as many as 14 million children would be pulled out of poverty.

The entire event begins at 5pm today. You can follow it live here:

The schedule for the two-day event can be found here.

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Event: Strategizing a New New Deal

Michael Stephens | September 8, 2017

If you’re in the vicinity of New York City at the end of October, Levy scholars Randall Wray and Stephanie Kelton are taking part in a public meeting organized by the National Jobs for All Coalition. The meeting is part of a series of public events focused on the legacy of New Deal.

Wray and Kelton will be participating in a panel on the job guarantee — “Political and Economic Prospects for Achieving a Federal and a New York City Job Guarantee” — alongside Philip Harvey and Darrick Hamilton (who was recently recognized by Politico for his work on the job guarantee).

The event is hosted at the New School (Oct. 27) and Columbia Law School (Oct. 28). You can download the flyer and program here. For registration and other details, see here.

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“Stimulus” Isn’t the Best Reason to Support (or Oppose) Infrastructure Spending

Michael Stephens | December 15, 2016

A little while back, Pavlina Tcherneva appeared with Bloomberg’s Joe Weisenthal to talk about the potential infrastructure policy of president-elect Donald Trump. She noted that, contrary to initial assumptions, the upcoming administration may not end up pushing public-debt-financed infrastructure spending, and that if the program simply amounts to tax incentives and public-private partnerships, it won’t be nearly as effective. But Tcherneva added another important dimension to this debate. (You can watch the interview here):

Tcherneva’s point is that infrastructure investment should be determined primarily by the state of dilapidation or obsolescence of our roads, bridges, etc., and not so much by the moment we occupy in the business cycle.

There are some who would argue that the time for a large fiscal stimulus has passed, with unemployment at 4.6 percent and growth continuing apace. There’s a good argument to be made that we’re not at “full employment” even at this moment, and that there’s no need to back off on stimulus (though there’s still the question as to whether the Federal Reserve would attempt to depress economic activity by raising interest rates in response to any substantial fiscal expansion — and, additionally, whether the Fed would succeed in those circumstances). But the point is, where you stand on this debate regarding the business cycle and the meaning of full employment shouldn’t be the driving factor behind infrastructure policy — we shouldn’t necessarily pursue or avoid infrastructure repairs and improvements for those reasons.

Moreover, if you’re looking for a job creation program, which Tcherneva would argue ought to be the point of “stimulus,” there are more effective options. In particular, she advocates a job guarantee that would provide paid employment at a minimally decent wage to all who are willing and able to work. Among other reasons, Tcherneva notes that such a program, which automatically expands during economic downturns and contracts in better times, is more effective as a countercyclical stabilizer, as compared to spending on infrastructure projects (read the tweet-storm version of the argument here).

And given that infrastructure seems to have become the go-to spending-side stimulus policy, we might also want to think about the distributive implications. continue reading…

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Tcherneva: Time for a US Job Guarantee (Part 2)

Michael Stephens | August 22, 2016

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Tcherneva: Time for a US Job Guarantee

Michael Stephens | August 15, 2016

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Basic Income and the Job Guarantee

Michael Stephens | June 8, 2016

Pavlina Tcherneva was interviewed by Joe Weisenthal yesterday to present the case against a universal basic income policy (a proposed version of which was just voted down in Switzerland). Watch:

Thcerneva Weisenthal_Basic Income v Job Guarantee

Tcherneva has written about the UBI versus Job Guarantee debate, including this contribution (pdf) to a special issue of the journal Basic Income Studies (paywall).

She also spoke about this last November at a roundtable convened by Dissent magazine:
continue reading…

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A Global Marshall Plan for Joblessness?

Pavlina Tcherneva | May 12, 2016

The corrosive social and economic effects of what have now become ‘normal’ unemployment levels require new solutions, and trade without full employment exacerbates the problem.

Global unemployment is expected to surpass 200 million people for the first time on record by the end of 2017, according a recent ILO study, and limitations of official statistics suggest that the problem is much larger. As conventional measures increasingly fail to produce tight labor markets and jobless recoveries become the norm, economists grapple with this new reality by calling it secular stagnation and by adjusting upwards the rates of unemployment deemed ‘natural’ — but the human, social and economic costs of this growing problem are rarely considered in economic modeling.

The Problem: A Global Unemployment Epidemic

Mainstream economic theory considers some level of unemployment to be ‘natural’ (i.e., unresponsive to policy remedies without creating some other problem like inflation), but it largely ignores the harsh human, environmental, and economic costs of unemployment. In fact, some of the best work on this question comes from disciplines outside of economics.

It’s not hyperbole to note, for example, that unemployment kills. Literally. Research shows that one in five suicides is related to unemployment, and joblessness causes 32–37 percent excess mortality for men. And while for women the impact is less clear, we know that there are robust and lasting negative effects from unemployment on social participation and social capital – all prerequisites for a fulfilling and productive life at home and in the workplace. The deep negative impact of unemployment on individuals’ mental and physical health is well-established. And joblessness has been found to have strong scarring effects on life satisfaction.

The link between crime and unemployment is also well-established. Certain criminal activities vary with the business cycle, and studies have found significant and sizable impact of unemployment on the rates of specific violent and property crimes. The connection between youth unemployment and crime is particularly troubling in the context of the ILO’s findings that 74 million young people are unemployed globally (one third of their overall global unemployment estimate). Other studies suggest that the actual number of jobless youth around the world may be six or seven times the ILO estimates.

Unemployment doesn’t just harm the unemployed. It also harms their children and families. It exacerbates infant mortality, depression, alcohol consumption, and the spread of infectious disease. And joblessness is a root cause of human/child trafficking and global sexual and labor exploitation.

This list only scratches the surface of the insidious effects of unemployment. While the ‘natural’ unemployment rate is embedded in virtually every forecasting model used by government and industry, none of them account for the extraordinary social and economic costs of the epidemic that this ‘natural rate’ actually represents.

The Solution: A Global Marshall Plan for the Unemployed continue reading…

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