More than five years after the fall of Lehman Brothers we are still dealing with the problem of high unemployment, the worst kind of “waste” in economic theory.
Is there a better approach? A number of scholars, notably Professor Randy Wray of the University of Missouri-Kansas City, have long proposed a Job Guarantee program or the government as an “employer of last resort,” or ELR.
As Wray notes in the interview below, the U.S. government can proceed directly to zero unemployment by hiring all of the labor that cannot find private sector employment. Furthermore, by fixing the wage paid under this ELR program at a level that does not disrupt existing labor markets, i.e., a wage level close to the existing minimum wage, substantive price stability can be expected. A sizable benefits package should be provided, including vacation and sick leave, contributions to Social Security, and, most importantly, health care benefits, providing scope for a bottom-up reform of the current patchwork health care system.
Using the government as an ELR would not be introducing another element of intrusive bureaucracy into our economy. It would simply offer a better utilization of the existing stock of unemployed who are now dependent on the public purse — especially the chronically long-term unemployed.
Chosen excerpts by Job Market Monitor. Read the whole story at
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