Universal job guarantee is the bold new solution to bring all workers sheltered by the coronavirus back


  • Pavlina Tcherneva, a Bard professor and one of the pioneering economists in modern monetary theory research said that jobs guaranteed by the federal government could reduce poverty and help communities better than universal basic incomes.
  • The coronavirus pandemic has wiped out millions of jobs, and a report has estimated that 17.6 million unemployed Americans may not return to work before the pandemic.
  • Chercherva said securing a job in the public service could lead to improvements on community-wide issues like public health and access to food – while completely eliminating unemployment.
  • Visit the Business Insider home page for more stories.

After the coronavirus pandemic has wiped out millions of jobs and left many Americans unable to pay their bills, policymakers have argued for giving citizens a universal basic income that would reduce inequality.

But just giving money to the Americans may not solve all the problems. The real solution to the ubiquitous inequality could be to guarantee every citizen a job to do, says economist Pavlina Tcherneva, a leading monetary policy researcher and one of the many economists who have advocated variants of the ” modern monetary theory ”at the start of the 21st century.

This school of thought is linked to “post-Keynesianism” and advocates much larger government spending than even the great economist John Maynard Keynes proposed during the Great Depression.

Tcherneva, associate professor of economics at Bard College and researcher at the Levy Economic Institute, recently wrote a new book, “The Case for a Job Guarantee”. In it, she argued that the fight against poverty and destitution is a multifaceted problem, and that a job guarantee is closer to the solution than the UBI.

Although automation kills some jobs, a popular argument put forward by Silicon Valley elites when advocating for the UBI, giving citizens money does not necessarily solve all well-being issues if they still live in a polluted community or a food desert.

The jobs guaranteed by the federal government solve two problems at the same time: communities could hire for jobs that specifically meet their needs and unemployment would no longer exist.

“The vision I question is that we are helpless in the face of technological change,” said Chercherva in an interview with Business Insider. “There would be automation, and we can always create good job opportunities for the people who need it.” “

Cherneva says we must not just reduce unemployment – we must eradicate it completely

In his book, Chercherva said that economists should focus on how to eliminate unemployment completely, rather than assuming there will always be a “natural” unemployment rate. In the United States, the Federal Reserve accepts that the “natural unemployment rate”, representing workers changing jobs or leaving the job market, is around 4%.

But any amount of unemployment can devastate a family or a community, said Tcherneva. A 10% increase in the unemployment rate in a neighborhood results in a loss of a year and a half of life expectancy, according to the AP. The Urban Institute think tank finds that communities with a higher proportion of the long-term unemployed have higher rates of crime and violence. Various studies indicate that the children of the unemployed tend to deteriorate more at school.

“We are not talking about a natural rate of homelessness,” said Tcherneva. “We are not saying that there is some optimal level of homelessness at which the economy would thrive. What we are trying to do is eliminate homelessness. ”

Chercherva said that while there are many job creation programs, few communities have yet to experience federally guaranteed jobs. India launched small-scale job guarantee program for rural workers affected by the coronavirus pandemic, bringing unemployment down to 7.26%, actually lower than before closure from the country.

In the United States, Tcherneva said that funding for the job program guaranteed by the federal government could come from money allocated to county unemployment offices. Instead of spending money on skills upgrading programs or taking over construction, these offices could create and provide public service employment in the community.

Cherneva said his biggest concern after the pandemic would be “normalized” unemployment. CNBC reports that 17.6 million unemployed Americans may not return to work before the pandemic, citing a study from the Economic Policy Institute. Some recruiting experts predict that previously full-time workers could move to the concert economy.

As private sector jobs disappear, guaranteed public jobs could end a flawed system.

“Even experiences that show people do better with cash show that people keep looking for work,” said Chercher. But after the pandemic, many job seekers will not be able to find a job if they are not guaranteed it – which translates into a “cruel game of musical chairs”, as Chercher describes it, which occurs when people compete for less and less jobs.

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