Here’s a solution for the unemployment problem from the UK that will likely have your head spinning: If you are out of work for an extended period of time, the government gives you a job. It’s called “Universal Jobs Guarantee”.
Please consider Unions call for guaranteed jobs for long term unemployed.
A coalition of labour market experts including the TUC, the Work Foundation and James Purnell MP – the former work and pensions secretary – will today urge the government to guarantee anyone claiming Jobs Seekers Allowance (JSA) for 12 months or longer be given a job.
The coalition argues that if the government fails to implement the so-called “universal jobs guarantee”, unemployment will continue to rise for years after the recession ends.
Making The Program Work
Believe it or not, with a few reasonable modifications, the “Universal Jobs Guarantee” program would be much better than the current cumbersome unemployment insurance scheme.
To make the program pay for itself, all we need to do is cut the minimum wage for guaranteed jobs to $2.00 per hour ($80 per week) for someone over the age of 18 and under the age of 65, not in school, hired to do nothing for which there was no genuine government job available. This would replace our current, cumbersome unemployment insurance system.
Benefits would not start until someone applied for the “Universal Job Guarantee”. Moreover, as soon as someone did apply, they would have to perform an actual government job if jobs were available.
For example: If someone was willing to do genuine work such as state park maintenance, parking meter enforcement, garbage pickup, etc. (and openings were available) they would receive a much higher minimum wage, say $5.00-$6.00 per hour depending on the job. To encourage participation in the program, any able-bodied person turning down a genuine job offer would be hired at $0.10 per hour to do nothing.
If no jobs were available, a person applying under the “Universal Jobs Guarantee” program would receive $2.00 per hour and placed on call for jobs, should jobs become available. Those receiving $2.00 per hour benefits the longest would be called first (alternating at random to a lotto basis to prevent gaming the system). Once called and offered a job, an able-bodied person would have to take the job or their benefits would immediately and permanently be reduced to $0.10 per hour.
Unemployment insurance programs would only be needed to fund the amounts described above. Small businesses would be more willing to hire, freed from the high costs of the current unemployment insurance system.
Moreover, unemployment would immediately drop to zero as a direct result of people being hired to do nothing. Best of all, genuine jobs would be filled at taxpayer friendly wages to qualified workers.
Finally, everyone would have a job and the administration would be the first in history to have full employment.
Yes, I realized this is not the ideal Austrian economic solution of outsourcing everything and doing nothing. However, by toying with what sounds at first glance to be a ridiculously bad idea, the above proposal would be a vast improvement over the existing system while maintaining some social safety nets that many would insist upon. It would also encourage able-bodied people to work or all they would receive would be $0.10 per hour for their non-work.
Mike “Mish” Shedlock
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