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The Moral Imperative and Social Rationality of Government-Guaranteed Employment and Reskilling

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  • Jon Wisman

Abstract

Unemployment exacts a high cost to its victims, not only in lost income, but also in terms of quality of life (insecurity, depression, abandoned families, divorce, suicide and poorer health). It also exacts a high cost to society in terms of lost output, foregone tax revenue, depreciating human capital, and increased costs of welfare, crime and health care. Yet modern wealthy societies have, principally for the sake of price stability and to avoid the budget costs of a full remedy, chosen to tolerate a substantial level of permanent unemployment. This article explores the moral conditions of this social choice and its rationality in terms of social welfare. It makes and develops support for two claims: society's tolerance of involuntary unemployment is morally wrong, and it is socially and economically irrational. It concludes that government should guarantee employment by serving as employer of last resort and where appropriate provide for retraining.

Suggested Citation

  • Jon Wisman, 2010. "The Moral Imperative and Social Rationality of Government-Guaranteed Employment and Reskilling," Review of Social Economy, Taylor & Francis Journals, vol. 68(1), pages 35-67.
    • Handle: RePEc:taf:rsocec:v:68:y:2010:i:1:p:35-67
    DOI: 10.1080/00346760902968405
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    References listed on IDEAS

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    1. Paul Davidson & Jan Kregel (ed.), 1999. "Full Employment and Price Stability in a Global Economy," Books, Edward Elgar Publishing, number 1670.
    2. L. Randall Wray, 1998. "Understanding Modern Money," Books, Edward Elgar Publishing, number 1668.
    3. L. Randall Wray, 1997. "Government as Employer of Last Resort: Full Employment without Inflation," Economics Working Paper Archive wp_213, Levy Economics Institute.
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    Cited by:

    1. Jon D. Wisman & Michael Cauvel, 2021. "Why Has Labor Not Demanded Guaranteed Employment?," Journal of Economic Issues, Taylor & Francis Journals, vol. 55(3), pages 677-696, July.
    2. Mohseni-Cheraghlou, Amin, 2013. "Labor markets and mental wellbeing: Labor market conditions and suicides in the United States (1979–2004)," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 45(C), pages 175-186.
    3. Jon D. Wisman & Aaron Pacitti, 2013. "Ending the Crisis With Guaranteed Employment and Retraining," Working Papers 2013-12, American University, Department of Economics.
    4. Jon Wisman, 2013. "The Growth Trap, Ecological Devastation, and the Promise of Guaranteed Employment," Challenge, Taylor & Francis Journals, vol. 56(2), pages 53-78.
    5. Godin, Antoine, 2014. "Job Guarantee: a Structuralist Perspective," Revue de la Régulation - Capitalisme, institutions, pouvoirs, Association Recherche et Régulation, vol. 16.
    6. Jon D. Wisman & Aaron Pacitti, 2017. "Guaranteed Employment and Universal Child Care For a New Social Contract," Working Papers 2017-05, American University, Department of Economics.

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