The “Thing” with Job Guarantee Programs…

Martha Tepepa | February 21, 2021

In a February 18th front page article in the business section of the New York Times, Eduardo Porter surveys the potential for a job guarantee program. After starting with the caveat issued by Republican politicians—why trust your life choices to bureaucrats?—the piece goes on to present opinions of various experts on employment programs.

It is noteworthy that even among the specialists, not one has ever been involved in actual fieldwork or research in the various experiments with job guarantee programs. In an era in which we are asked to respond to facts, none of those consulted on the implementation of job programs has ever provided statistical analysis of results, nor studied the communities where the programs were actually successful in achieving their stated goals—which in general are much wider than the suggestions that the programs have not contributed significantly to lessen economic recessions, or that they are too expensive and that they might produce “useless make-work.” Indeed, there are no references to the many existing experiments.

Consider Argentina, where there is ample evidence that the Head of Households Program (HHP) played an important role in alleviating the recession and actually had a significant impact on the recovery of the economy after the 2001-2 economic, political, and social collapse. In situ fieldwork based on participant interviews conducted in urban irregular settlements shows[1] that the impact of program work experience was much greater than a simple impact on sustenance incomes. Indeed, program design produced significant impacts on gender equality and environmental preservation.

Women were able to join several activities that not only provided them with an income but also provided access to food, basic medical attention, regular health checks for families, child care, literacy, and training. Most importantly, participation in program activities created a community support network in areas of extreme poverty. The jobs that many consider “useless make-work” provide training for women that allows them to leave abusive domestic conditions.

Fieldwork undertaken in Lomas de Zamora shows that the programs provided relief for families experiencing food insecurity and improved women’s participation in training activities that allowed them to apply for jobs beyond housekeeping or as street vendors. The women also expressed their satisfaction at being able to help their children with school work and were proud to go to work and participate in educational activities.

Other employment opportunities that have been reported in on-site studies include that of a women’s cooperative (in the area of Lomas de Zamora in the provincia de Buenos Aires)—the “Agua mas trabajo” (Water plus Labor)—which installed sewage in underserved areas in the metropolitan area of Buenos Aires. The federal government provided the heavy machinery and the materials to several cooperatives; among them cooperativa Nueva Argentina, composed of 15 women and one man. The women learnt plumbing, welding, and basic construction skills and received technical, legal, and business training as well.

These aspects might not seem relevant in the discussion of countercyclical policy and labor market efficiency, but in communities with high unemployment, crime, and domestic violence rates and high percentages of immigrants and unemployed heads of households, the social contributions can be significant.

If we are to appropriately assess the viability and costs of these programs, it is incumbent on experts to analyze the more general benefits they provide. One reason that these aspects have been overlooked is that the programs Porter mentions, such as “work opportunity tax credits,” are simply subsidies to the private companies where the government covers a percentage of the workers’ wages. They are not successful because they only offer money and don’t include the most successful part of the programs—the activities that encourage people to improve their education and their training, having a long lasting impact on their lives and the lives of their families and communities. Further, the European research cited in the article that provides an “overview” of the labor market effectiveness does not represent micro statistical survey data from the programs they analyze. None of the work of the researchers cited provides statistics derived from actually visiting the community projects and interviewing participants. Instead, their conclusions are based on results from macro data. Their analysis is based on databases compiled by the United Nations and doesn’t include the details of each program—leaving an important blind spot not captured by the numbers and models they have selected.

Government programs always incite political debate and recrimination, usually based on the prejudice of the analyst rather than the hard work of actual on-site analysis. There are always examples of programs that do not produce the desired objectives, but it is important to learn from those that actually work and recognize the appropriate catalogue of costs and benefits. When the programs’ activities are designed with the participation of members of the communities where they are implemented, the gains are significant. But government officials must commit to improve the well-being of the participant communities, not the balance of the government’s budgets.

 

[1] TEPEPA, Martha 2013 El Programa Jefes y Jefes de Hogar: Experiencia en Ing. Budge, Lomas de Zamora, Argentina, Tesis de Doctorado, Colegio de Mexico.

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2 Responses to “The “Thing” with Job Guarantee Programs…”

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  1. Comment by Ralph MusgraveFebruary 21, 2021 at 1:49 pm   Reply

    It is nonsense to suggest that no specialists have “ever been involved in actual fieldwork or research in the various experiments with job guarantee programs”. Pavlina Tcherneva, one of the leading advocates of JG in the US did field work in Argentina. Plus plenty of “research” and “field work” has been done in Switzerland and Sweden. E.g. see respectively:

    https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1010145.
    http://legacy.iza.org/essle/essle2002/Gerfin.pdf

    Also the above article is clueless on the macro-economics of JG. For example it does not deal with the unfortunate fact that for a JG system to run, it has to nick skilled labour, capital equipment etc from REGULAR employers. Ergo while JG schemes can produce something of worth, they inevitably REDUCE the output of regular employers. Alternatively, if a JG scheme employes unskilled labour and almost no skilled labour, capital equipment, etc then output per head will be hopeless. And I’m not claiming that therefor the who JG idea is useless. I’m just saying the issue is far more complicated than most JG advocates think it is.

    However, I don’t want to blame Martha Tepepa too much for that omission: about 99% of the JG advocates are totally clueless on the macro-economics of JG as well.

  2. Comment by Martha Tepepa — February 22, 2021 at 8:08 am   Reply

    The blog post is commenting about an article published in the NYT. The author cites a handful of research on labor programs, that are really not JG. Have you read it?
    https://www.nytimes.com/2021/02/18/business/economy/job-guarantee.html
    Tcherneva’s research is not cited in the article, nor the extensive work done by Wray and others at the Levy Economics Institute, for example. I’m aware that she and Wray visited the programs (I was with them as an interpreter). However their visits were not fieldwork.
    I don’t blame you either, 99% of Economists don’t recognize Ethnography as a “valid” research method in Economics.

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