Solution to Unemployment

The current system:
>A pool of unemployed workers grows and shrinks with the business cycle, and this buffer of unemployed labour keeps the price level steady
>We are told that if unemployment drops below the NAIRU (which cannot be observed), inflation will occur
>We tolerate 5%+ unemployment and much higher "real" unemployment in the form of underemployed, and hidden unemployed (those not in labour force but would accept any reasonable job offer)
>Minimum wage is whatever the government sets, but the real minimum wage is still zero if you're unemployed
>Economy is constantly unstable and the poorest suffer from shocks to the system

A better system:
>A pool of employed workers grows and shrinks with the business cycle, and this buffer of employed labour keeps the price level steady
>NAIRU is replaced by NAIBER (Non-Accelerating Inflation Buffer-stock Employment Ratio), which is calculated differently to NAIRU but can provide a policy target in a similar manner
>We need not tolerate any more unemployment, and get an imperfect but much better system that ensures work and income for all
>Minimum wage is whatever fixed wage the job guarantee scheme pays - this is a matter for debate, but even a low amount is better than no job
>Stabilise the economy from the bottom up, taking care of everyone

Other urls found in this thread:

e1.newcastle.edu.au/coffee/pubs/wp/2006/06-15.pdf
twitter.com/SFWRedditVideos

So are you saying that instead of things like welfare and food stamps we pay the unemployed to do some magical makework job?
Unemployment comes in many forms and "hidden' or 'underemployed' exist because those people choose to take those jobs and employers are offering them.
I don't see the benefit in this.

>le full employment meme
say i am an underemployed / hidden whatever. i want x job. an employer can hire an x job like me for pennies on the dollar using the minimum wage the job guarantee scheme pays
i do a job as good as the guy currently employed.
that guy now costs too much money compared to me
kek

I want to read model legislation and literature about this "solution to unemployment." What do you recommend?

Structural unemployment is good for the economy (as it ensures efficient allocation of human capital), and any other unemployment will shrink if the free market gets a chance to shine, this is just a waste of taxpayer money that would hurt the economy.

The economy can't really afford to have everyone employed, it will become overloaded if we do that. You also cant create demand out of thin air, if a job needs doing someone will be hired to do that job a work program would be more costly and less beneficial than just straight welfare.

Das Kapital.

There's no shortage of work to be done. What work should be done? This is a good and important question, but any employment is better than none.
Hidden unemployment is a result of people being jobless for so long that they give up searching. Underemployment is a result of insufficient demand for someone's labour. We should see both for what they are: waste.

Not really clear on what you're saying but I think I kind of get the gist. Whatever wage the job guarantee pays, will be the minimum wage. This is because employers must offer decent/higher wages to outbid the minimum offered in the JG. Compare this to the current implementation of minimum wage.

e1.newcastle.edu.au/coffee/pubs/wp/2006/06-15.pdf

Neat thanks.

Let's make people dig holes and refill them or build ghost towns like China ! It works well to increase GDP ! Great idea guys !

>"The Conservative belief that there is some law of nature which prevents men from being employed, that it is “rash” to employ men, and that it is financially ‘sound’ to maintain a tenth of the population in idleness for an indefinite period, is crazily improbable – the sort of thing which no man could believe who had not had his head fuddled with nonsense for years and years…"

Isn't one of the cornerstones of any job guarantee policy the initial low wage. My understand is that a bidding system as you mention would work against the main objective of the policy

Currently high unemployment is caused by excessive regulation. The unemployment i'm talking about is the time spent between jobs, where people spend time finding a new one. This is around 3-5%. This program doesn't fix the problem of unemployment whatsoever. The goal of a job is to produce more in goods and services than the cost in terms of wages to the employee. I highly doubt the government can do a better job finding those kind of jobs than the free market, especially playing by their own regulatory rules including the minimum wage.

Thats literally ad hominem. I want a real argument that explains where the money is going to come from for a job guarantee. The soviet union had 100% employment until it went under. If you were even willing to show me even a single town with 100% employment I could easily point out the factors involved in why this is the case in that area.
Jobs are not guaranteed, and according to the data I've heard and the programs I listen to jobs are not only becoming less necessary due to automation but profits are becoming much higher as well as production.
You need demand. People without jobs cannot supply demand. This is why welfare programs exist to shuttle money to people who have ample demand and low resources to feed businesses.
If you're arguing jobs for people that pay nothing I can agree. But I can't see the economic sense in your argument at all, even thumbing through that .pdf I can't get any sort of answer.
>government can do a better job finding those kind of jobs than the free market
if anything the government is great at finding things to do when there is nothing, like the homeland security busting handjob palors.
If we're talking a jobs program, then use spoons to dig. If its jobs you want, destroy your factories and have it all be handmade.
That doesn't improve quality of life or the economy, but you'll get your full employment. I'd really like to hear how you can get to full employment without it just being an expansion of the public sector.
A job needs to make a profit. Without that, the whole economic system falls apart.

I'm not sure if you're illiterate or I'm very inarticulate, but I think if you re-read my post you'll see that's exactly what I was saying.

Not an "initial" low wage - a fixed low wage. The lowest wage we decide to tolerate in the economy. Suppose it's $5 or $8 or $10 or $12 or $15 or whatever.

Okay if you think the frictionally unemployed make up 3-5% of the workforce then I won't argue against that (although I believe it's more likely at or below 2%), but this scheme would even deal with the temporarily unemployed. You can transition into and out of the job guarantee scheme as needed.

>where the money is going to come from for a job guarantee
This is not a concern for a sovereign national government like the US or Australia. For a eurozone country it wouldn't work because they don't issue the currency. (Yes, I am saying "print money" but only in the same sense that every budget deficit of a currency issuer "prints money".)

what the fuck
devalue the currency?
still don't see your point, what exactly do you want? why post if you just want to say I'm wrong because I'm wrong?

Would paying minimum wage to the previously unemployed population really devalue the currency that much?

If so, is the exchange rate really worth leaving millions in poverty? (I would prefer a full employment economy over a good exchange rate any day of the week.)

Even if you think the exchange rate is so important, wouldn't you agree that investors are more likely to desire the currency of a prosperous, economically stable, full employment society?

Question. How is the JG wage set and why is it set there?

And functionally, what is the difference between having no minimum wage, and letting markets fill the unlimited "work to be done" to the limits of the labor market?

>Question. How is the JG wage set and why is it set there?
This is up to the implementation. It could be done using the same logic (or arbitrary selection) as the minimum wage is currently determined.
>And functionally, what is the difference between having no minimum wage, and letting markets fill the unlimited "work to be done" to the limits of the labor market?
Not all "work to be done" is profitable, but it still offers benefits to society. The unmet need of communities is perfect for a job guarantee. Consider for example all the work that is currently done on a voluntary basis.