The Job Guarantee — More Money, Less Tax

What is a Job Guarantee?

A Job Guarantee is a very simple concept. It is the offer of a job, to anybody that wants it, at the living wage, paid by the government, working for the public good.

And how would that work?

If you are short of work you would go to the Job Centre and ask for a job. The Job Centre would then match you with voluntary, community and public services who have work on offer, and that are offering the sort of work you want to do. Job Centres become places that provide ‘Jobs for the People’ — a genuine Labour Exchange.

What would I get paid?

You would be paid the current living wage. For example, if the living wage was set at £10 per hour and you worked 37.5 hours a week you would get a gross wage of £375 per week. That’s five times the current rate of Job Seekers Allowance of £73.10 per week. Or six and a half times the £57.90 per week you get if you are under 25.

What type of job would it be?

It’s really down to what you want. If you want a full time job, then you would get a 37.5 hour a week, 9 to 5:30 Mon-Fri job with the usual four weeks paid holiday plus bank holidays. Full maternity cover and sick pay. The sort of job you would expect in a civilised society.

If you are working part-time elsewhere, then you can ask for a top up to full time from the Job Guarantee. You’ll never be short of work, or a living wage.

If you want to work outside, you can have an outside job. If you want to work inside, you can work inside. The choice is yours.

I’d like a job drinking beer and watching Sky Sports

Perhaps, but what would others think of you then? As the late, great Muhammad Ali said: “service to others is the rent you pay for your room here on earth”. And he was right about that. The Job Guarantee is there to help you make that rent.

I’ve got this great idea for a business.

Great. Take your business plan down to the Job Centre and pitch it to them. They’ll even help you write that business plan. If the business support people there like the sound of it, then you’ll get to join the Enterprise Allowance Scheme — three years of Job Guarantee support while you get your business off the ground.

How does the Job Guarantee help my local area?

The Job Guarantee provides a job in the local area for every person that wants one. So if there is currently high unemployment in your local area, the Job Guarantee provides a massive injection of spending. Job Guarantee people earn wages, which they spend in the shops. Local businesses sell stuff, expand and hire people on the back of that. Commercial life returns.

Job Guarantee work improves the look, feel and life quality of deprived areas, making them vibrant and desirable places to live and run businesses. Stuff that is run down, suddenly gets a fresh lick of paint and a polish. All that makes people feel good and smile again.

So how will the government pay for it

The same way it pays for anything — by spending the money. A government of a country like the UK, Japan or USA that uses its own currency can never run out of money, something even intellectual giants like Donald Trump understand.

Once you learn the secrets of the government’s credit card — secrets the establishment want to hide — you quickly realise the government can buy anything unused that is priced in its own currency. The unemployed are unused, and will work for money if you ask them nicely.

So the government can, and should, offer a job and a wage.

But prices will go up!

The Job Guarantee is a job. It is a job created in the same way as any other new job in the economy. If creating new jobs and reducing unemployment caused prices to go up immediately, then we’d see that with every increase in business and trade. And we don’t.

So the government can, and should, offer a job and a wage.

Less Tax?

The Job Guarantee wage is only paid to people working in Job Guarantee jobs. The more people on the scheme the more government spending. When they move to private sector jobs that payment stops — which automatically reduces government spending.

It is an ‘auto-stabiliser’. Spending goes up when the economy is down, and spending goes down when the economy is up.

So because it is carefully targeted at only the people that need it, and it automatically self-adjusts based upon need, there is no requirement to correct any over spend via taxation on the other side.

The result of that is straightforward. The current low tax rates can stay.

Why is the private sector excluded?

Simple really. Why should the state subsidise private profit? If the state pays, then that is the same as all the citizens paying. Since the citizens paid, they should receive the output produced by Job Guarantee employees — tidy parks and gardens, more charitable services for older and younger people, free art and entertainment.

But perhaps more importantly the job of the private sector is actually to put everybody in the private sector out of work — by automating away jobs and replacing them with machines and advanced methods. The Job Guarantee helps that happen by making labour relatively scarce and forcing the private sector to compete to get it.

Strapping people to the back of a primitive planting machine only happens if labour is cheap and plentiful. Make it scarce and suddenly that new automated robotic planting machine looks like it is worth the investment.

Labour competition forces more investment by business, better training and better methods, and that improves the productivity of the country. And that is how our standard of living improves. Easy access to labour slows down productivity improvement, and reduces business investment, and we’ve seen too much of that in recent years.

Why is the public sector excluded?

It is and it isn’t. The public sector can use as much of the Job Guarantee labour as it wants to — at the living wage. But because the people on the Job Guarantee may be moving in and out of the programme rapidly (as they get other jobs elsewhere in the economy with their newly acquired skills and experience), then Job Guarantee labour may not be the best for public sector provision that absolutely has to get done.

Once the Job Guarantee is in place, then everybody has a job. And that means that required public sector services come about by moving people to the public sector from existing jobs. The tool you use to free up resources from the economy is taxation. So you are back to traditional tax and spend and the political debate around that process.

Paying people higher salaries in the public sector is a transfer of resources away from other people. But if you can show that they put more back, then people will happily pay the taxation from their higher incomes. You’ll get little argument with doctors, nurses and teachers for example. It’s very clear how much they put back.

Overall the required public services will be matched with taxation, whereas the ‘nice to have’ public services will be done by Job Guarantee people.


If you liked this article, please click the ‘heart’ below to recommend it to others, and use the share buttons to spread the word. Remember Modern Money Matters.