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The Cost of Job Guarantee in the United States

Author

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  • Eric Tymoigne

    (Lewis and Clark College, Portland, OR, USA)

Abstract

From the 1960s, Minsky argued that implementing a decentralized job-guarantee policy funded by the federal government was a relevant way to promote full employment and price stability, and to alleviate poverty. This policy aims at providing a job to anybody willing to work and to pay a living wage. Over the past fifteen years, this idea has been subject to greater scrutiny and this paper contributes to that literature by estimating the gross cost of implementing a job-guarantee policy (JG). In order to calculate this cost, the paper uses the data available from the 1930s work programs. These work programs provide some interesting insights because enough data are available to determine the cost of JG under widely different rates of unemployment. The paper shows that JG would have been quite expensive during the early part of the 1930s when the unemployment rate was at 20 percent or more. Once unemployment receded to a usual level, the gross cost of JG would have been low.

Suggested Citation

  • Eric Tymoigne, 2014. "The Cost of Job Guarantee in the United States," Review of Radical Political Economics, Union for Radical Political Economics, vol. 46(4), pages 517-535, December.
  • Handle: RePEc:sae:reorpe:v:46:y:2014:i:4:p:517-535
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    More about this item

    Keywords

    job guarantee; employment policy; Great Depression;

    JEL classification:

    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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