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Government Jobs for All?

Daniel Sutter
November 9th, 2021
The American Institute for Economic Research
Comments (14)

This article was originally published by Daniel Sutter at The American Institute for Economic Research. 

“Production requires real work, not government make-work jobs. By diverting millions out of productive private-sector jobs, the MMT jobs guarantee seems guaranteed to impoverish America.” -Daniel Sutter

Modern Monetary Theory (MMT) offers some unconventional policy recommendations based on the United States’ monetary sovereignty. MMT proponents also advocate government-guaranteed jobs paying a living wage for all Americans. What would be the consequences of such a guarantee?

The Public Service Employment program detailed in a 2018 paper from the Levy Economics Institute would be funded by Washington and administered by states. It would offer full and part-time jobs paying $15 per hour plus benefits. The program’s spending would be mandatory, like other entitlement programs. The jobs would “provide public services in nonprofit community organizations, public schools, and state and local governments.”

The program could accomplish three distinct ends. The first is stabilizing aggregate demand during economic downturns. The second is instituting work relief in place of cash assistance. The third is implementing a “living wage” for all Americans.

When the economy slips into recession, businesses lay off some workers and cut others’ wages. Reductions in these workers’ spending produce second-round (and third-round) effects: landlords, for example, cut back their spending after not receiving rent. Many economists support macroeconomic stabilization.

Stabilization works much better when automatic. Discretionary stabilization spending, like 2009’s American Recovery and Reinvestment Act, can take months to enact. Laid-off workers can start a guaranteed government job immediately.

Today unemployed workers receive cash assistance. While I do not advocate government make-work jobs, work relief has two advantages over cash assistance. First, work requirements effectively control fraud, as revealed by the 1990s welfare reforms. People working while on the welfare rolls never showed up for mandatory job training.

Work relief also denies recipients the leisure of staying home. People will compare the full value of their options. Suppose a person values the freedom of not working at $30,000 a year. If they also receive $10,000, only a $20 per hour job matches the full value of the cash assistance.

The MMT jobs program also implements a living wage providing a “just” level of compensation. Economics shows how workers in a competitive labor market get paid the value they create for businesses. The “problem” of low wages is then inadequate job skills.

The living wage is redistribution disguised as work. Market wages and salaries are not charity; the prices customers willingly pay for goods and services cover workers’ pay. Market-based salaries come entirely from voluntary payment and workers earn their pay by helping produce goods and services.

Guaranteed jobs effectively set a minimum wage because few Americans will work for businesses offering worse compensation packages (wages and benefits). Government jobs would be far more effective in assisting low-wage workers because a minimum wage ends up pricing many out of the labor market altogether.

Government jobs paying $15 an hour plus benefits would likely cost $40,000 per job annually. MMT proponents project 15 million government jobs would be needed even when the economy is strong. MMT can advocate such a budget-busting program because in its view monetary sovereignty renders Federal spending costless under most circumstances.

The biggest potential problem with the jobs guarantee, even at a lower wage, is whether people will have to work. What exactly is a government “guaranteed job?” The term job suggests a person must work satisfactorily or be fired. The guarantee suggests anyone fired must then be given another position.

Government guaranteed no-show jobs would blow up the labor market. If you had a “job” paying $30,000 plus benefits not requiring work, how much would you need to be paid to take a real job? Guaranteed $15 per hour no-show jobs would effectively be a $30 or $40 per hour minimum wage.

The United States is prosperous because we produce goods and services people want in large quantities. Yet production requires real work, not government make-work jobs. By diverting millions out of productive private-sector jobs, the MMT jobs guarantee seems guaranteed to impoverish America.

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    Author: Daniel Sutter
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    Date: November 9th, 2021
    Website: https://www.aier.org/

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    14 Comments...

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    1. Shannon says:

      Not to mention the fact that to take one of these “jobs” one must comply and get the “vax-jab” and later on a chip- The Lord is coming to take His own home- then 7 years of unfathomable pain and anguish will be unleashed. Please call on Jesus to save you- Believe what He did for you on the cross of Calvary is shedding His blood and dying for you, and then Resurrecting Himself so that we also could be resurrected to live with Him Eternally!!
      From the book of Romans: 10:9 That if thou shalt confess with thy mouth the Lord Jesus, and shalt believe in thine heart that God hath raised him from the dead, thou shalt be saved.
      https://www.nowtheendbegins.com/eternal-life-through-the-blood-of-jesus-christ-is-a-free-gift/

    2. Genius says:

      That’s why Libtards hate Trump so much, he promised them all a job! The NWO poopets shut down my industry so I made a killing on unemployment then retired. Used that cash/time to finish off loose ends. Just need to figure out a way to store large quantities of gas. Good luck folks….

    3. Anonymous says:

      Sounds good, never been done before so let’s give it a try and see how well it works.

    4. Bill says:

      The Dem.s see the writing in the wall. Virginia turned back to Republican in their recent elections, CRT is now disapproved by well more than half the people in the US, prez JB is unpopular and gets worse with each new survey, the majority of Americans are now fed up with the catastrophe on the border, the Repub.s will take Congress next year and probably the Senate too, and the list goes on. The Dem.s will speed up the agenda they had planned under this prez to get as much in place as possible while they can.
      They will flood as many illegal immigrants in this country as they can between now and the next election. They will push the vaccine hard (they need as many people “vaccinated” as possible before it becomes obvious to most people the “vaccine” is the problem – at least 75% of covid illnesses, hospitalizations, and deaths are those who are vaccinated). And of course shutdown/dismantle more pipelines in a way to make it difficult to restart them. Everything they wanted to do is going to be pushed in 2022, it is going to be an interesting year.
      What they don’t succeed in accomplishing they will try to poison the well so as to make any Repub. goals and policies impossible to implement.
      All this only proves Dem.s place party above the people and the country. If we could only rid of those RINOS too.

      • Anonymous says:

        The Left has the power to ram everything they want through before the next elections, and plenty of support from Republicans to make sure it succeeds.

        Bt the next elections, regardless of the results, those changes will be mostly irreversible and future opposition to them is of little importance since it will be mostly ineffective.

        The Left knows how to fight and win, the Right knows how to compromise itself and lose.

    5. This has little to do with R vs D. Rs expand the .gov as much as Ds do. Both sides are spendthrifts albeit on different programs. There are no fiscal conservatives. Nowadays the word trillion causes no more surprise than a billion did twenty years ago.

      The US produces few exportable goods other than weapons of war and financial fraud. Government jobs produce nothing…they are so-called Service Jobs. An economy cannot survive forever when the balance of trade is so far underwater and continuing to sink. Collapse is imminent.

      Agrarian economy =======>
      Industrial economy =======>
      Service economy ========> ===>You are here <===
      Collapse

      • Bill says:

        Even as late as the 1970’s the US had a manufacturing and industrial base more productive than the rest of the world combined, an was the largest creditor nation in the world. Since then, we have lost 80% of our industrial capacity and are the largest debtor nation in the world, while much of the planet has surpassed us in manufacturing and industry.
        We are constantly told we are the richest nation on the planet in every metric. This is simply not true. The nation as a whole is living on, and being maintained with debt. We may be enjoying a high standard of living, but instead of being sustained by our productivity like previous generations, the fed. prints up trillions of paper bills called dollars, those dollars flood the economy and sustains the economy like heroin sustains an addict. Those same dollars which cost almost zero to make are also traded to foreigners for manufactured goods, and in reality we are getting something for basically nothing, for now. The US is really producing little more than massive debt and inflation. When we can no longer can kick the can down the road there will be real hell to pay, and in many ways we cannot foresee at this time.

    6. Darth Skippy says:

      “The United States is prosperous because we produce goods and services people want in large quantities.”

      In terms of indebtedness, we are not prosperous, and have de-industrialized our manufacturing sector.

      “The ‘problem’ of low wages is then inadequate job skills.”

      Notice, how you were not taught any marketable job skills, in 13yrs of mandatory schooling, or even educated to the level of hand-to-mouth survivalism. You learned helplessness and rote repetition. Do the Bellamy.
      .
      “What exactly is a government ‘guaranteed job?’”

      When Lincoln “emancipated” slaves, to work in the Caribbean.

      There has to be downline in the great Ponzi scheme known as civilization. The ones who failed the Mark Dice gag interviews used to be considered foundational, according to Hammond’s Mudsill theory.

      youtube.com/watch?v=wqiMASk5MIU&ab_channel=anarchi.st

    7. cranerigger says:

      “Government Jobs For All”, like the old Soviet Blok nations that had a standing joke among themselves. “We pretend to work and they (govt. apparatchiks) pretend to pay us.” As we devolve to third-world status (Let’s go Brandon), my wife told me a story about a light fixture not functioning in a hotel she resided in within a far-Eastern country. The repair technician came into the room with 2 wires attached to a small light bulb. He attached the wires to the business end of the light fixture and proclaimed “IT NO IS WORKING”. No repair or replacement was forthcoming during the ensuing days. Kind of like the USA today.

    8. Spider-defiant says:

      Why can’t we send all leftard commies to Cuba to see how much fun the commie way truly is. 100 million were murdered under communist rule in the 20th century from around the world. Don’t ever give up your inalienable rights of 2A ever!
      Always in every commie take over the firearms are confiscated and then the butchering begins!

    9. Spider says:

      Why can’t we send all leftard commies to Cuba to see how much fun the commie way truly is. 100 million were murdered under communist rule in the 20th century from around the world. Don’t ever give up your inalienable rights of 2A ever!
      Always in every commie take over the firearms are confiscated and then the butchering begins!

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