The Job Guarantee and Economic Democracy
Pavlina R. TchernevaAssociate Professor of economics at Bard College
Twelve years after the Great Financial Crisis of 2008, the world faced another upheaval – a pandemic that had once again laid bare an inescapable reality: the global economy consistently fails to provide basic economic security for all. Whatever crisis a country faces – financial, public health, geo-political, or environmental – jobs are dependably the first casualty. The status quo argues that unemployment is normal and largely inescapable. Worse, the longstanding mainstream view in economics of the ‘natural rate’ of unemployment (and the related NAIRU concept) argues that unemployment is required for economic and price stability.
Yet in the postwar period, protracted and painful jobless recoveries have become the norm, growth has failed to deliver full employment, labor markets have weakened further, producing increasingly more precarious and more scarce employment opportunities. A jobless reality, where millions fail to secure stable and well-paid employment, is an unequal reality. For economic giants like the US, the labor market weakened significantly since the 70s, when wages stopped keeping pace with productivity, and when labor market ‘flexibilization’ under neoliberal reforms meant union busting, weakening of labor laws, and the gigification of work. It is during this period that stabilization policy turned its focus away from labor markets and toward financial markets, away from stabilizing the incomes of working families and toward tax cuts for the wealthy. It is no accident that during this time, economic growth systematically delivered the vast majority of income gains to the top 1% 1 . While globally, the middle class increased (as some developing countries – mainly China – lifted large swaths of their impoverished population from poverty), income inequality still worsened, as income gains continued to accrue to the global elite, while countries experiencing extreme poverty continued to be trapped in a vicious cycle of deprivation 2 . According to Oxfam, in 2014, the world’s richest 80 people owned as much as the world’s poorest half 3 , while in the following year, only 62 people owned as much wealth. The trend continued over the next few years, and by 2019, only 26 people owned as much wealth as the world’s poorest half. The pandemic worsened global inequalities, reducing incomes of 99 percent of the world’s population and pushing 160 million more people into forced poverty 4 .
The connection between unemployment and inequality is organic. So is the connection between stabilization efforts and unemployment and inequality. Labor markets and the conditions of work are key mechanisms (albeit not the only ones) of distributing the gains of production and income growth. Full employment, living wages, labor protections are preconditions for more equitable income distribution. Conversely, unemployment, poverty pay, and labor market deregulation are structural forces that help reproduce inequality. Mass unemployment in particular ensures that the global economy rations scarce jobs through race-to-the-bottom labor practices, a process that has eroded the postwar social contract in the Global North, and ensured that it never reached the Global South.
Long gone is the urgent international dialogue of the postwar era on how to secure global full employment—the unqualified precondition for reaping the benefits of free trade. Mass unemployment and precarious employment not only reproduced and fed inequality, but also chipped away at economic democracy and undermined social solidarity within national borders and beyond. None of this was inevitable. Far from being natural or unavoidable, mass unemployment and precarious employment are the product of specific policy commitments. And the global economy has borne the social, economic, and political costs.
In the face of the COVID19 pandemic and perennial economic crises, the world is reengaging in a conversation about reshaping the economy as a whole, and labor markets in particular. A recent call to democratize work has reverberated across the globe 5 , published in 45 papers in 26 languages, and supported by thousands of signatories. In it, guaranteeing the right to decent and remunerative employment was identified as a key demand and the modern Job Guarantee proposal was singled out as a cornerstone in the global environmental agenda. The Paris Accord had recognized that a green transition is not possible without ‘human rights [and] a just transition of the workforce, and the creation of decent work and quality jobs in accordance with nationally defined development priorities’ 6 . In the US, the Job Guarantee has been called the most crucial component of the Green New Deal resolution 7 . It is also a core recommendation by a landmark report by the International Labor Organization’s Global Commission on the Future of Work 8 , echoing an earlier recognition and recurrent demand that the right to employment is a fundamental human right.
Policy Paradigm Shift
The Job Guarantee policy aims to ensure that the internationally-recognized right to remunerative employment is legally enforceable, and that anyone seeking living-wage work can find it, whenever it is needed. But it is much more than a job creation policy. It is a structural reform that fundamentally reorients macroeconomic stabilization policy away from trickle-down economics and toward bottom-up stabilization that is based on a new social contract.
Some of the components of this new social contract are the following. First, the public sector – by concrete policy action or by omission – underwrites labor market outcomes. It faces two policy options: to continue supporting the status quo of job scarcity or to shift to a policy regime that actively creates sufficient employment opportunities for all jobseekers.
Second, the Job Guarantee can center fiscal policy around countercyclical employment and macroeconomic stabilization without sacrificing price stability 9 . This would have the added benefit of stabilizing labor incomes at the bottom and improving the distribution of income.
Third, while private employers create the vast majority of employment opportunities in a market economy, they do not create enough opportunities for all job seekers. The state has a crucial role to play in making up the difference. This can be accomplished by creating additional employment opportunities in the public interest that concentrate on addressing acute social and environmental needs.
Fourth, by virtue of establishing a public option for a basic job, the Job Guarantee would also establish a labor standard, which ensures than no working person (in the public or private sectors) would go without a basic living wage and benefits. This labor standard is a precondition for strengthening social solidarity. Unemployment, and the threat of unemployment, are structural forces that affect the employment conditions of those who have secured paid work. But there is also strong interdependence between people within and people outside the labor force. Poor work and pay conditions, inadequate provisioning of public goods, neglect of environmental and community needs invariably affect the quality of life of all people, irrespective of whether they seek paid employment. To this end, the Job Guarantee aims to marry unmet needs with available resources and improve overall wellbeing through collective action.
Finally, designing an institutional infrastructure to secure the right to employment for all is possible (based both on concrete historical experiences and contemporary evidence discussed below) and urgent (given the existential threats posed by the climate crisis and economic insecurity).
Unemployment as a Special Problem
The centrality of human rights and international coordination to achieve them was revived in 20th century. In 1944, Franklin D. Roosevelt called for an Economic Bill of Rights. The same year, the International Labor Organization Declaration of Philadelphia was centered on the principle that labor is not a commodity, and in 1948, Article 23 of the Universal Declaration of Human Rights reaffirmed that everyone has the right to work. The right to employment has been a recurring demand since at least the French Constitution of 1793, and while early classical political economists did not frame the economic problem of labor in the language of ‘rights’, economists like Adam Smith premised their analysis on labor being the essential input of production. They also argued that the level of remuneration is distinct from other inputs and should be sufficient to allow labor to reproduce itself.
American Institutionalists have also long argued that labor is uniquely dissimilar from other factors of production in the following sense. Labor (work that could be offered for pay) cannot be separated from the provider (the worker), and thereby cannot be stored 10 . Other commodities which can be warehoused (grain, for example), can generate a future income stream for their producers (eg, for farmers during off season), but workers require on-the-spot remuneration. They are unable to store their work power in a similar way to resell it during recessions. For labor, work is produced in the act of working, thus it generally requires employment on an ongoing basis with some certainty (and, yes, with a guarantee that it will be available when needed), in order to plan for one’s personal or family needs.
As Harry Hopkins, Franklin Delano Roosevelt’s closest advisor and tireless champion for the right to employment, once famously noted ‘People don’t eat in the long run, they eat every day.’ The aspect of self-consciousness also means that living incomes and family-sustaining wages are essential for survival, both from a material and psychological perspective. Agricultural commodities do not ‘care’ about the conditions of their employment. They may be stockpiled, discarded, or left to spoil, but individuals and their families experience the mental and physical toll of joblessness and poorly paid employment. All of this means that labor more than any other commodity requires income and employment protections that are not inherently necessary for other inputs of production. And yet, grain, oil, and other commodities often enjoy price supports, subsidies, and purchase programs ensuring that the government buys them when private demand falls. In a certain sense, public policies support many commodities through various price supports and demand guarantee programs, in ways that they do not do so for labor. The Job Guarantee would be the missing wage and employment support for working people.
American Institutionalists had also argued that the right to employment is part of a bundle of economic rights 11 and is indeed a ‘logical extension of the right to life and liberty, all of which must be secured by government’ 12 . While minimum wages are part of the protections required by labor, people unable to secure even minimum-wage employment do not benefit from those protections. For the unemployed the minimum wage is zero. The right to employment must also be guaranteed in order to ensure that the right to a decent wage is firmly secured to all. The fear of deprivation is not just a fear of inadequate pay, but also the fear of losing one’s employment altogether. The modern proposal for a Job Guarantee answers this call.
The Job Guarantee Proposal
The Job Guarantee is a proposal for the public sector to create employment opportunities on demand in public service projects at a living wage-benefit package for any person who needs such an opportunity. The program would serve as an employment safety net and a public option for jobs that would run parallel to traditional unemployment insurance or other anti-poverty programs. It is an added program, not a replacement for existing ones. One of the rationales for this approach is that it is a straightforward solution to the problem of unemployment. Consider this: it is well understood that the private sector does not provide adequate education, healthcare, or retirement security to all (to name just a few key components of basic economic security). The public sector typically supplies them as public goods instead and, in many cases, it guarantees them. While some countries struggle with securing the safety net, in many cases public policy commits to providing directly certain essentials for economic life. Public education in most countries is guaranteed by governments. Social retirement insurance is a core part of many modern safety nets, even when private retirement insurance exists as a supplement to an individual’s retirement income. In most advanced and many developing economies, public healthcare is also guaranteed. So are the access to a public library, public utilities, and public defense and safety. Securing direct access to basic employment opportunities, however, is missing from the traditional economic safety net. And even though decades of neoliberal reforms had privatized many of the public delivery mechanisms and prioritized incentives over direct provisioning for public good and services, the direct approach remains the most effective and efficient method for eradicating economic insecurity.
Housing, education, healthcare, and retirement security are all internationally recognized economic rights, and in the US, they were part of Franklin Delano Roosevelt’s 1944 Second Bill of Rights. But so is the right to a job, to the free choice of employment, and to just and favorable conditions of work. For this reason, the Job Guarantee is voluntary and provides a menu of employment options that fit the job to the worker’s needs (more below). When there is hunger, governments aim to provide food (however imperfectly). When there is homelessness, they aim to provide public housing. When there is inadequate access to healthcare, governments typically guarantee it, and when there are not enough educational opportunities, governments guarantee public education as well. But when there is a shortage of basic jobs, governments do not provide them directly as with other dimensions of social deprivation. Assistance for the unemployed may include unemployment insurance (often meager, temporary, and punitive) or training opportunities (for jobs which remain in short supply), but not guaranteed jobs. It is no exaggeration to say that the labor market (at a national and international level) is a game of musical chairs.
The public sector can respond to joblessness by implementing an employment safety net. The access to living wage jobs would also mean a reduction in food, housing, unemployment insurance, or other public assistance. Thus, while the expenditures on other anti-poverty programs would naturally shrink, the program would also prevent many of the non-monetary costs and scarring effects of unemployment that affect the unemployed themselves and their families 13 .
Additionally, the Job Guarantee also becomes a springboard for people to more effectively transition to other, better-paid employment opportunities than if they were still trapped in unemployment. This is especially important for youths who face some of the largest unemployment rates around the world. Globally, youth unemployment levels are in the double digits (13.1% worldwide in 2017) and have been on the rise since 2007 14 . But according to the International Youth Foundation, accounting for measurement limitations, youth unemployment may be six to seven times higher than the ILO estimates. The ILO reports that in 2017, working poverty among young adults was 37% globally and as high as 71% in developing countries. The pandemic has only exacerbated the job prospects for this generation, leading to a social crisis of global proportions.
Even in developed nations, the barriers to employment are very high for some groups, such as the long-term unemployed in prime-earning years, caregivers desiring to return to paid work, as well as for people with disabilities, who have some of the highest unemployment rates. In other words, the Job Guarantee would serve both as a safety net and an effective transitional program to paid employment. The public sector would provide the missing opportunities, weakening the private sector’s ability to use the threat of unemployment as a screening device in hiring and salary negotiations.
The Job Guarantee is also a preventative program, thwarting the social and economic costs of unemployment. It reorients policy from the exclusive focus on income support for the unemployed to preventing unemployment from developing in the first place and directly solving it once it has emerged. Preparedness and prevention would be key guiding principles for such a policy. If the Job Guarantee becomes part of the permanent policy architecture, people who need paid work could avail themselves as needed and not suffer prolonged unemployment and the corresponding consequences. Notably, when unemployment is widespread and job prospects are uncertain, spending patterns are much more unstable, amplifying business cycles. If job seekers knew that a living wage job offer were around the corner, they would likely not curb consumption as drastically, as they do with temporary and small unemployment insurance assistance.
Preparedness and prevention are policy paradigm shifts, away from crisis alleviation and mitigation. This policy approach is broadly consistent with what Mazzucato has called mission-oriented public policy 15 . The mission, in this case, is preventing the worse social and economic outcomes of unemployment and underemployment that workers experience from multiple pandemics, inevitable crises, and recurring economic fluctuations.
The final and, arguably most transformative, aspect of the Job Guarantee is that it replaces the natural rate of unemployment and the NAIRU as economic stabilizers. Unemployment has been normalized by the economics profession’s insistence that it is a necessary bulwark against inflation. Because the Job Guarantee is a demand-driven policy, it would expand in downturns and decelerate in expansions, when the private sector resumes hiring above the base wage of the program. The employment safety-net would thus serve as a countercyclical policy that shrinks in inflationary/growth periods, mitigating price pressures. Changes in the program would largely depend on changes in hiring and firing practices in the private sector, providing a more robust floor to demand than unemployment provides today. A reserve army of the unemployed would no longer be necessary for the purposes of price stability.
A recent study 16 evaluates the macroeconomic effects of an ambitious Job Guarantee program for the US that would employ 15 million people at living wages (by comparison, official unemployment in December 2020 was 10.7 million people) and found that the program’s net budgetary impact would be between 0.98 and 1.33 percent of GDP, not accounting for all the reduced direct and indirect costs on unemployment and poverty alleviation. The study also found that the program would boost GDP by 2 percent, permanently increase private sector employment by 4 million new jobs and would improve state budgets due reductions in anti-poverty programs and increases in local tax revenue. Further, the impact of the program on inflation was a negligible 0.09 percent. An earlier study 17 also demonstrated that a similarly designed Employer of Last Resort program would have strong anti-cyclical effects. By all main macroeconomic measures, this is an effective economic policy.
The Job Guarantee could be a centerpiece of a paradigm shift in macroeconomic stabilization policy that replaces the unemployment stabilizer with a living-wage employment stabilizer. It would help complete the welfare safety net by adding a public employment option that is currently missing. And by doing so, it would establish the minimum labor standard for pay and benefits for the economy as a whole. It would exert important pressure on private employers who pay poverty wages and use the threat of unemployment to impose onerous working conditions. The public option would be an ‘out’ for the most vulnerable workers, while private sector employers would be incentivized to match the program’s pay and benefits in order to retain workers or attract new ones away from the Job Guarantee.
Toward a Green Job Guarantee
One expedient way of making the Job Guarantee a reality is to connect job creation to environmental conservation and other social care needs. As I have argued elsewhere 18 , the Job Guarantee is inherently a green policy, not only because of its organic connection with the climate conservation movement, but also because it remedies the neglect and squander that come with economic distress, unemployment, and precarious work. Arguably a green policy is one that aims to address all forms of waste and devastation, including both natural and human resources. The Job Guarantee is also part of the US Green New Deal Resolutions, which recognizes that environmental justice cannot be delivered without economic and social justice.
Although the Job Guarantee predates the Green New Deal movement, it has always been green in practical terms too – from the days of Roosevelt’s Tree Army to modern proposals like the one outlined here – prioritizing environmental conservation and community renewal. The Green New Deal is a comprehensive and ambitious policy strategy designed to transform the economy and deliver a habitable planet to future generations. The Job Guarantee is the bridge in that transition, the safety-net and preventative macroeconomic stabilization policy, which ensures that while we work to protect the environment and transform the economy, we have a policy that protects working people and transforms the work experience itself.
The Job Guarantee matches unmet needs with available resources. Because it aims to address the social deprivations of people, communities, and the environment, it is not only a green policy, but can be viewed more broadly as a care policy. Large swaths of the population, even in developed countries, face shortages of vital goods and services. Food deserts, where millions of people lack access to healthy and affordable food, blanket the US. So do medical deserts – nearly a quarter of all residential areas lack acute-care hospitals and 80% of rural areas are designated as medically underserved 19 . This is typical for European nations as well, even though many provide nationalized healthcare. Sustainable agriculture, community health centers, and other basic services are needed even in the wealthiest regions of the world, while in the developing world, these problems are worsened multifold by the lack of basic infrastructure.
All the while, the planet is burning. Perennial fires, floods, hurricanes, droughts are intensifying. Air, soil and water pollution are preconditions for the accelerating and at an unprecedented rate of species extinction, according to a recent UN report 20 . Environmental work is endless and urgent. It includes investment and rehabilitation projects that are small and large. The Job Guarantee is one key mechanism for ensuring that the work is being done. A global tree army can repair the lungs of the planet, provide green infrastructure in dense urban areas, and help restore biodiversity. Rural areas can benefit from sustainable agriculture investments, drought prevention, and other public services. The examples are many.
Global recycling programs can help save the oceans from plastics and other polluters. The climate crisis is an existential threat to fishing communities that help feed the planet. Meanwhile, mangroves, wetlands, tidal marshes, seagrass, seaweeds sequester carbons effectively and up to five times more than tropical forests 21 . Restoring them is an urgent and labor-intensive task. The Job Guarantee can be a springboard for implementing sustainable fishing and regenerative ocean farming practices. Reef reconstruction and habitat restoration can reverse the impacts of coastal development on coastal marine ecosystems and vulnerable (and often indigenous) communities. Wetlands are natural embankments that often provide better protection than seawalls. Coastal communities often suffer mass unemployment and underemployment. The Job Guarantee would employ the unemployed and underemployed to do these critical tasks. And the program would be well targeted, as coastal communities often have some of the highest unemployment and underemployment rates nationwide.
A similar approach would help impoverished rural communities, who have born the ill effects of commercial agriculture. Firm concentration in agriculture (known as Big Ag) has led to some of the most abusive labor market practices of any industry (wage theft, dangerous working conditions, substandard housing for workers) and has consistently produced environmental hazards (methane emissions, water crises, soil erosion), public health concerns (antibiotic resistance, food born illnesses, dwindling nutritional content), and unfair competition wiping out small family farms (raising monopoly pries of patented seed and equipment, while lowering purchase prices for crops and cattle for sale). As noted above, despite the increased agricultural output, food deserts are ubiquitous around the globe. But corporate farms have been especially detrimental for working people. Agriculture has reliably produced some of the most precarious and poorly paid jobs. Big Ag often relies on cheap migrant labor that in many countries is exempt from basic labor protections like minimum wages, work contracts, or collective bargaining. Yet sustainable agriculture is critical from a strategic point of view (communities need to know where their food comes from), from an environmental point of view (sustainable agriculture relies on regenerative farming) and from the point of view of workers (community supported agriculture CSAs create more and better paid local jobs). The Job Guarantee can help multiply CSAs, farm cooperatives, and community garden initiatives. Because it is a program that creates jobs where they are most needed, by focusing on sustainable agriculture, it can be an effective method for wiping out food deserts while creating living wage employment opportunities.
The problems with agriculture are connected to the problems of water pollution. Agricultural runoff contaminates underground water tables as well as river, takes and beaches, poisoning marine life and destroying the habitat. Small infrastructure projects in every farming community can help reverse these effects. Fencing cattle appropriately, recycling wastewater, planting vegetation and fortifying wetlands can help with runoff. So can basic landscaping that diverts stormwater in communities where construction has built impervious surfaces (roads, parking lots, sidewalks) and overwhelmed the natural environment’s capacity to deal with flooding.
Commercial development in wildfire prone zone have meant loss of life and livelihoods. Building residential communities so close to wildlands has increased the incidents of human ignition and conflagrations (eg, virtually all fires in California – more than 90% – are caused by humans, often along roads or buildings from use of flammable invasive grasses). Meanwhile, fire prevention investments have not kept pace with the rate of construction. A program of massive retrofitting with the latest fire-resistant materials is needed, as well as the construction of effective evacuation routes, and implementing building restrictions in certain areas. In the meantime, while communities are regularly incinerated, the work of fighting the fires and cleanup is daunting. A 21st Century Fire Brigade and Firefighter Reserve can provide well paying jobs in many communities.
The discussion above barely scratches the surface of the kinds of work that could be done with a Job Guarantee. In the US, lack of universal healthcare has been compounded by lack of accessible healthcare. Public health deserts can be remedied by building a network of community health clinics which can provide basic preventative care on ongoing basis for free. These can be important sites for on-the-job training opportunities for Job Guarantee workers and internships for young people, who wish to transition into better-paid employment opportunities in healthcare. Coupled with other educational and certification programs, the Job Guarantee can be a springboard for anyone facing obstacles to paid employment. While there are many easily identifiable areas of critical need, addressing the climate crisis alone, requires an all-hands-on-deck approach. And while the Job Guarantee is a key piece to a comprehensive climate strategy, environmental and community care needs are ongoing, thereby necessitating ongoing public service employment.
Within Reach: Real World Experiences
The examples above are not simply a wish list. They point to critical areas of concern. Experience shows that such initiatives can be launched on short order to yield overwhelmingly positive results. Of the notable large-scale employment programs that have provided direct employment to the unemployed in public service, three stand out.
The first two — the New Deal of the 1930s in the US and Plan Jefes in Argentina in the early 2000s — responded to economic crises that produced depression-level unemployment rates. In both cases, the projects were launched within six months. In the US, they were mostly federal projects that built critical infrastructure that still lives on. In Argentina, they were federally-funded but organized from the ground-up, with direct input by community groups and the unemployed themselves, who designed, proposed, and ran the projects 22 .
The third and largest in the world employment guarantee program is in India which, unlike the previous two, was implemented as a permanent program to deal with the ongoing problem of rural poverty. In 2005, India’s Mahatma Gandhi National Rural Employment Guarantee Act (NREGA, later renamed MGNREGA) established the legally-enforceable right to 100 days of guaranteed employment to any rural household whose members volunteered to work in a community project 23 . It is the most significant program of this kind in the world, not only due to its sheer size, but also due to its scalability, architecture, implementation, and impact. In 2019-2020, over 55 million households (or nearly 40% of all rural households in India) obtained work through the program. During the pandemic, in the 2020-21 fiscal year, a whopping 75.5 million households had worked in the program and another 71.7 million in 2021-22, prompting widespread demands for extending the guarantee to 200 days 24 . As some newly unemployed workers from urban areas returned to their rural homes, they were able to access employment though the program, while calls for extending the program to urban areas (and unemployed youth, in particular) also grew.
MGNREGA is a bottom up, people-centered, and demand-driven program, where the offer of employment must be provided within 15 days whenever someone seeks it. Payment of wages is also due within 15 days of work. Due to its self-selecting and rights-based design, the program has fostered social inclusion, gender parity, social security, equitable growth, participatory planning, and environmental protection.
It has been a critical lifeline for the unemployed and the underemployed during the pandemic. Note that unemployment is not a condition for eligibility, and one could perform other work and still participate in the rural employment guarantee. In other words, communities have found safe and effective ways to continue to provide meaningful community work, even as the economy experienced many COVID-19-related work stoppages. A notable implementation innovation is the administration of program payments through the National Electronic Fund Management System (NeFMS), allowing for the direct deposit of beneficiaries’ wages into their bank accounts. Nearly 96 percent of all wages are being paid directly through the NeFMS. Note that the government’s chronic and willful 25 underfunding of the program has produced unreliable payments of wages within the mandated 15 days – a problem of artificially constrained budgeting rather than payments system design.
The program has both benefited from and strengthened local democratic structures and grassroots governance. For example, any plans for job creation and decisions about rural projects are made in open assemblies in Gram Sabha (a public forum used by the primary administrative bodies of rural villages called Gram Panchayats). People use the forum of the Gram Sabha to discuss local governance and development and make needs-based plans for the village. This system of local self-government of villages in rural India (as opposed to urban and suburban municipalities) is used to propose, plan, ratify, and approve (or deny) projects. Once a project has been accepted by the local assemblies, the decisions cannot be overturned by higher administrative authorities (such as the Ministry of Rural Development), except in cases when the project violates the very basic operational guidelines outlined by the Act, e.g., if it undertakes work that is not in the 261 permissible activities under the scheme (these are revised periodically depending on local needs). The central authorities provide general guidelines on what would constitute ‘shelf of projects,’ but do not undermine the local authority in creating, designing and implementing them.
MGNREGA is an important break from traditional income relief programs. It also prioritizes guaranteed employment in projects that improve the natural resources of rural communities. It is an integrated program for resource management and economic development. The World Bank has called the program a significant engine of rural development. The rural and so-called ‘unskilled’ labor (as per government designation) has been productive, generating needed environmental assets and benefits. The government has created maps and databases of green investment initiatives. The program has prioritized natural resource management (NRM) and has become the primary program leading water conservation efforts in the country. Additional activities include investment in water security, road connectivity, tree planting, soil renewal, and irrigation to name just a few high impact investments in rural assets. Notably because the program is demand driven, it fluctuates with economic cycles and throughout the year and with the monsoon season. The experience demonstrates that ‘important work’ and ‘cyclical work’ is not an either-or policy dilemma. A Job Guarantee can fulfill needed tasks on ongoing basis and provide jobs on demand.
MGNREGA is the largest (albeit not universal) Job Guarantee program with significant success. It no doubt has its own challenges, including underfunding, irregular payments, and corruption in some communities. Nevertheless, given the program’s scale, the large size of households it serves, and the community benefits it has produced, all things considered, it is the largest and arguably most important and effective full-fledged precedent of a Job Guarantee in the world.
There are other programs in other countries that can form the basis for a national Job Guarantee program. For example, the Zero Long-Term Unemployment Areas project in France has been inspired by the goals of social inclusion through guaranteed employment, though it is much smaller in scope than MGNREGA. Nevertheless, in its short life since its launch in 2017, it has yielded positive results, prompting the French government in 2020 to unanimously vote for its extension and expansion. In the first phase, only 10 territories and about 100 communities benefitted from the program. Now 40 more major territories would be able to embark on this program.
The basic principles behind the French pilot rest on the understanding that: 1) no one is unemployable (even people who have been outside the labor force for a long time can contribute with human capabilities and know-how); 2) there is no shortage of tasks (communities have many unmet needs); and 3) there is no shortage of funding (long-term unemployment assistance is a large line-item in local budgets which does not produce needed employment opportunities). Public funds on long-term assistance are re-directed to employ the long-term unemployed with permanent contracts at the minimum wage in social enterprises that address specific community needs. The program is voluntary. In some cases, the long-term unemployed persons are recruited, but they alone must decide to participate and are not deprived of benefits if they choose not to. The public sector creates public employment and social enterprise companies, which provide permanent contracts to the unemployed and employ them ‘as they are’, irrespective of personal circumstance or disability. The program’s projects and activities are in addition to existing activities, and do not compete with ongoing private or public sector work in the community. Another significant aspect of the Zero Unemployment Territories is the co-creation process, which expresses the Job Guarantee’s participatory democratic goals. The unemployed participants have the opportunity to create their own jobs on the basis of their own know-how, skills and desires, as well as the needs of the territory 26 . And while one of the initial challenges during program launch was securing consent from the territories where the projects would take place, having seen the positive effects of the program, many more municipalities are signing up.
The government has found that the direct expenditures on the program more than offset spending on anti-poverty and unemployment programs, while producing needed social and economic value. Participants report anecdotally that the job opportunity has improved their own personal wellbeing, including their chances for employment opportunities above the minimum wage offered by the program 27 . Meanwhile, city mayors in the pilot regions report that the program is breathing a new life into their communities.
The projects range from community gardens to nursing homes, recycling initiatives, administrative help for city councils or small local businesses, apprenticeships in small manufacturing operations, elderly assistance, helping schoolchildren cross busy intersections, rehabilitation of abandoned structures and lots for use by local enterprises, and many others.
Workplace Democracy, not Workfare
The Job Guarantee is based on democratic principles and should not be confused with punitive workfare programs. FDR’s New Deal, Plan Jefes, MGNREGA and Zero Long Term Unemployment Areas, are just a few notable examples that are based on democratic and participatory principles. There are many other programs, such as UK’s Future Jobs Fund and Brussel’s Actiris Youth Guarantee project or Mierenthal’s Job Guarantee Experiment in Austria.
But it is important to note that the direct employment solution is not only available to democracies. Authoritarian and illiberal forms of governments too can avail themselves of direct employment for the unemployment. For example, Victor Orbán has implemented a program in Hungary for hiring the unemployed in rural areas as well. Orbán’s program is not a Job Guarantee; it is a Job Obligation because it removes the benefits of the unemployed unless they submit to work on a government-determined project. Program wages are very low and, in some cases, they are lower than the forgone unemployment benefits. The jobs are created top down in projects delegated by the town’s mayor or the federal government. The program often provides occasional work (a few hours even) that fails to support workers. The program has spruced up some villages, but that has often come at the real human cost of forced work in poverty conditions. Indeed, the program has solidified support for Orbán by increasing social polarization between the ‘haves’ and ‘have nots’—those who have good jobs and those who have been asked to ‘prove’ that there are deserving of the government assistance.
It must be strongly emphasized that these are not Job Guarantees, ie bottom up, voluntary employment arrangements that nurture solidarity, self-governance and self-determination. This should be no surprise. Unemployment is a scourge on society and there are two paths to eradicating it. One path is via democratic means and a voluntary Job Guarantee, organized from the ground up with participatory input from the community and the unemployed themselves. The second path is through forced, punitive, and poorly paid mandatory employment. The Job Guarantee is an alternative to existing workfare polices that are based on the falsehood that unemployment is an individual failure rather than a macroeconomic structural problem that is beyond the control of the unemployed.
The Job Guarantee does not ask the unemployed to ‘reform’ themselves or demonstrate that they are deserving of the state support. It takes people as they are, fits jobs to their needs, and empowers people and communities to co-create their own projects, shape their own destinies, and transform their own communities on collaborative and cooperative principles that empower, rather than punish.
In the midst of multiple pandemics, a climate crisis of existential proportions, and an increasing precarity of all workers, the threat of unemployment remains the most serious affliction in labor markets and the greatest obstacle to social solidarity. At the same time participatory models for employing the unemployed, recognizing the right to employment as a core human right, offer the greatest promise to solving these challenges before us.
The global engine of job creation does not promise stable or well-paid employment. Protracted and painful jobless recoveries from economic crises have become the norm. The COVID-related crisis was an opportunity to democratize work and come out on the other side of the pandemic with better working conditions and access to decent employment to all. While the global pandemic is still rolling through the globe, it is also urgent to address the crises of economic insecurity and climate change. As we are witnessing at present, running the global economy ‘hot’ does not guarantee either an inclusive economy or environmental sustainability. The last half a century has demonstrated that the structure of the global economy is such that growth-at-all-cost policies damage the environment, create precarious jobs, and increase income inequality. Further, the all-too-popular economic incentives and nudges have failed to address dire social and environmental challenges. This state of affairs had been sustained by a bankrupt conventional view that there is a tradeoff between unemployment and inflation, between good jobs and technological innovation, and between saving jobs and protecting the environment. None of these claims stand up to scrutiny once we consider the implications of reorienting public policy around the Job Guarantee proposal.
These are false choices: jobs need not be sacrificed in the name of inflation control (an anticyclical employment program is a superior inflation anchor), technology is not the villain that threatens jobs (with the guarantee of decent employment, we can enjoy the productivity enhancements technology brings), and creating good jobs for all and environmental sustainability are entirely compatible (environmental stewardship and conservation would be needed even after we have solved the most dire climate threats).
Far from being ‘just another jobs program’, the Job Guarantee is a structural reform, a better macroeconomic stabilizer, and a labor standard for other jobs as well. It can be the cornerstone of a policy paradigm founded on the principles of economic democracy and global solidarity. It can also ensure that the internationally-recognized right to decent and remunerative employment for all is not just an aspirational statement, but a workable, accessible, and legally-enforceable right.
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To cite the article
Pavlina R. Tcherneva, The Job Guarantee and Economic Democracy, Aug 2022,
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