Matt Bruenig Debates Job Guarantee with Mark Paul

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Tony Abbott

Last week, Philly DSA hosted a debate between myself and Mark Paul about job guarantee (JG) proposals. Paul was for JG. I was against JG. The full debate can be seen in the YouTube video below.

Despite the title of the video, there was actually no discussion of UBI in the debate, only the job guarantee and other approaches to unemployment benefits. Those who have read my work on the subject will find nothing new in the debate.

I start my argument by explaining that one the primary functions of the welfare state is to provide income to nonworkers, specifically children, elderly people, disabled people, students, caregivers, and the unemployed. Insofar as both Paul and I agree that unemployed people should receive cash from the government, the debate really turns upon how unemployment benefits should be structured and what kind of conditions we should attach to the receipt of those benefits.

The job guarantee favored by Paul is a basic unemployment benefit that has very strict work requirements, also known as “workfare.” In opposing this kind of program, I offer the alternative of an unemployment benefit with generous income replacement and a decent minimum benefit that has very few conditions attached to it.

The problem with attaching strict conditions to benefit receipt is that many people will fail to meet those conditions and thereby lose their benefits, causing poverty, hunger, and homelessness. Even those who manage to jump through the hoops and perform their required hours of community service have to suffer through hassle and time wastes to do so. Our experience with workfare in the US, most famously with the NYC Work Experience Program, has also been very negative.

After my initial point, the remainder of my contributions took the form of rebutting points Paul raised. Below are some of the back and forth, summarized briefly.

Paul brought up the issue of poverty. But you solve poverty through the welfare state not through workfare per se. We can see this clearly in the comparison between the US and Finland. In 2016, Finland’s poverty rate was about one-third of the US poverty rate even as their overall employment rate was 1 percentage point lower than the employment rate in the US. Also, to the extent that the “job guarantee” lowers poverty, it is because of the cash unemployment benefit it provides recipients not the community service it requires the recipients to do.

Paul brought up the issue of full employment and empowering workers. But in so doing, Paul mangles the traditional meaning of “full employment.” As told by Kalecki, the purpose of full employment is to create tight labor markets that make it difficult for employers to find replacement employees. But, as Randy Wray and Bill Mitchell have consistently pointed out over the years, the JG intentionally generates loose labor markets because the JG’s minimum wage benefit means that non-minimum-wage workers cannot use the program to make a credible quit threat and because the JG workforce acts as a “reserve army” that private employers can draw from to undercut the wage demands of their “obstinate” workers. A better approach is to use fiscal and monetary policy to run a hot economy while also providing normal unemployment benefits with high income-replacement rates that are available to job-losers and job-quitters alike.

Paul brings up the issue of mental health problems among the unemployed, such as those recently highlighted by Case Deaton. But mental health and other similar problems among the unemployed are not found everywhere. I pointed to a study from Denmark that showed that, in a society with generous unemployment benefits and universal health care, the effect of unemployment on mental health was negligible. More fundamentally, as I argue in the debate, there is no reason to believe that making unemployed people do community service to receive their income support will actually resolve any of the anxieties, uncertainties, and loss of status that drive negative mental health outcomes. Put differently, if you take someone who is suffering on unemployment benefits and then make them rake leaves to keep receiving their check, that will not make them feel better. If anything, they will feel worse.

Finally, Paul brought up the issue of our derelict public sector and the need to transition away from our carbon-based energy system. But the public sector is best built up through ordinary hiring of the sort we already do for teachers, bus drivers, librarians, and firefighters, among others. The same goes for hiring people for new jobs in the green economy. Furthermore, offering a $30,000 workfare job to a fossil fuel worker currently making $80,000 is neither just nor effective at overcoming the opposition we currently face. To make sure fossil fuel workers are taken care of, we need to provide an unemployment benefit that replaces a large percentage of their prior income, perhaps even 100 percent of it for some time, which is precisely the alternative I propose.

All in all, it was a fun debate. I think this is an important topic that the left should get more thoughtful about and I am thankful to the Philly DSA for giving Paul and I an opportunity to hash it out.