IDEAS home Printed from https://ideas.repec.org/p/amu/wpaper/2013-12.html
   My bibliography  Save this paper

Ending the Crisis With Guaranteed Employment and Retraining

Author

Listed:
  • Jon D. Wisman
  • Aaron Pacitti

Abstract

Since 2008, the U.S. economy has been mired in the second worst economic crisis in its history. Conceivably, massive government spending could bring the economy out of this slump as massive war spending ultimately ended the Great Depression of the 1930s. However, a far superior strategy exists: Guaranteeing employment accompanied by retraining to enable all unemployed workers to become absorbed into the regular work force. Beyond ending the crisis, the superiority of this strategy is that it would institutionalize a procedure for insuring that, in an increasingly technologically dynamic and open economy, workers would possess the necessary skills for available jobs. Guaranteeing employment would also eliminate the ecological costs associated with the need to seek growth to generate employment at practically any cost. Finally, it would establish a new moral social contract whereby everyone is granted the dignity that accompanies being a productive member of society. Welfare for those able to work could disappear, along with the degradation and humiliation that accompanies it.

Suggested Citation

  • Jon D. Wisman & Aaron Pacitti, 2013. "Ending the Crisis With Guaranteed Employment and Retraining," Working Papers 2013-12, American University, Department of Economics.
  • Handle: RePEc:amu:wpaper:2013-12
    DOI: 10.17606/dpet-hs49
    as

    Download full text from publisher

    File URL: https://doi.org/10.17606/dpet-hs49
    File Function: First version, 2013
    Download Restriction: no

    File URL: https://libkey.io/10.17606/dpet-hs49?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Menzie Chinn & Laurent Ferrara & Valérie Mignon, 2013. "Post-Recession US Employment through the Lens of a Non-Linear Okun's Law," Working Papers 2013-13, CEPII research center.
    2. repec:pri:cepsud:215krueger is not listed on IDEAS
    3. Henry S. Farber, 2011. "Job Loss in the Great Recession: Historial Perspective from the Displaced Workers Survey, 1984-2010," Working Papers 1309, Princeton University, Department of Economics, Industrial Relations Section..
    4. Claudia Goldin & Robert A. Margo, 1992. "The Great Compression: The Wage Structure in the United States at Mid-Century," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(1), pages 1-34.
    5. Jon Wisman, 2013. "Government Is Whose Problem?," Journal of Economic Issues, Taylor & Francis Journals, vol. 47(4), pages 911-938.
    6. repec:pri:indrel:dsp01kw52j8087 is not listed on IDEAS
    7. Michael Perelman, 2007. "The Confiscation of American Prosperity," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-60706-4, December.
    8. Edward N. Wolff, 2007. "Recent Trends in Household Wealth in the United States: Rising Debt and the Middle-Class Squeeze," Economics Working Paper Archive wp_502, Levy Economics Institute.
    9. Jon D. Wisman, 2013. "Labor Busted, Rising Inequality and the Financial Crisis of 1929: An Unlearned Lesson," Working Papers 2013-07, American University, Department of Economics.
    10. Alan B. Krueger & Andreas Mueller, 2011. "Job Search, Emotional Well-Being and Job Finding in a Period of Mass Unemployment: Evidence from High-Frequency Longitudinal Data," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 42(1 (Spring), pages 1-81.
    11. Jon Wisman, 2011. "Inequality, Social Respectability, Political Power, and Environmental Devastation," Journal of Economic Issues, Taylor & Francis Journals, vol. 45(4), pages 877-900.
    12. 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.
    13. repec:pri:indrel:dsp014j03cz656 is not listed on IDEAS
    14. Edward P. Lazear & James R. Spletzer, 2012. "The United States labor market: status quo or a new normal?," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 405-451.
    15. Henry S. Farber, 2008. "Employment Insecurity: The Decline in Worker-Firm Attachment in the United States," Working Papers 1068, Princeton University, Department of Economics, Industrial Relations Section..
    16. Henry S. Farber, 2008. "Employment Insecurity: The Decline in Worker-Firm Attachment in the United States," Working Papers 1068, Princeton University, Department of Economics, Industrial Relations Section..
    17. Krueger, Alan B. & Mueller, Andreas I., 2011. "Job Search and Job Finding in a Period of Mass Unemployment: Evidence from High-Frequency Longitudinal Data," IZA Discussion Papers 5450, Institute of Labor Economics (IZA).
    18. Facundo Alvaredo & Anthony B. Atkinson & Thomas Piketty & Emmanuel Saez, 2013. "The Top 1 Percent in International and Historical Perspective," Journal of Economic Perspectives, American Economic Association, vol. 27(3), pages 3-20, Summer.
    19. Nancy E. Rose, 2013. "Bring Back the WPA: Lessons from the Job Creation Programs of the 1930s," Palgrave Macmillan Books, in: Michael J. Murray & Mathew Forstater (ed.), Employment Guarantee Schemes, chapter 0, pages 155-179, Palgrave Macmillan.
    20. Mathew Forstater, 2006. "Green Jobs: Public Service Employment and Environmental Sustainability," Challenge, Taylor & Francis Journals, vol. 49(4), pages 58-72.
    21. Jon D. Wisman & Barton Baker, 2011. "Rising Inequality and the Financial Crises of 1929 and 2008," Perspectives from Social Economics, in: Martha A. Starr (ed.), Consequences of Economic Downturn, chapter 0, pages 63-82, Palgrave Macmillan.
    22. Henry S. Farber, 2008. "Employment Insecurity: The Decline in Worker-Firm Attachment in the United States," Working Papers 1056, Princeton University, Department of Economics, Center for Economic Policy Studies..
    23. Peter Temin, 2008. "Real Business Cycle Views of the Great Depression and Recent Events: A Review of Timothy J. Kehoe and Edward C. Prescott's Great Depressions of the Twentieth Century," Journal of Economic Literature, American Economic Association, vol. 46(3), pages 669-684, September.
    24. Mathew Forstater, 1998. "Flexible Full Employment: Structural Implications of Discretionary Public Sector Employment," Journal of Economic Issues, Taylor & Francis Journals, vol. 32(2), pages 557-563, June.
    25. Jon D. Wisman, 2013. "Wage stagnation, rising inequality and the financial crisis of 2008," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 37(4), pages 921-945.
    26. L. Randall Wray, 1999. "Public Service Employment-Assured Jobs Program: Further Considerations," Journal of Economic Issues, Taylor & Francis Journals, vol. 33(2), pages 483-490, June.
    27. William Mitchell & L. Randall Wray, 2005. "In Defense of Employer of Last Resort: A Response to Malcolm Sawyer," Journal of Economic Issues, Taylor & Francis Journals, vol. 39(1), pages 235-244, March.
    28. Galbraith, James K., 2012. "Inequality and Instability: A Study of the World Economy Just Before the Great Crisis," OUP Catalogue, Oxford University Press, number 9780199855650.
    29. Kroft, Kory & Lange, Fabian & Notowidigdo, Matthew J., 2012. "Duration Dependence and Labor Market Conditions: Theory and Evidence from a Field Experiment," CLSSRN working papers clsrn_admin-2012-21, Vancouver School of Economics, revised 28 Sep 2012.
    30. Henry S. Farber, 2011. "Job Loss in the Great Recession: Historical Perspective from the Displaced Workers Survey, 1984-2010," NBER Working Papers 17040, National Bureau of Economic Research, Inc.
    31. Edward N. Wolff, 2010. "Recent Trends in Household Wealth in the United States-- Rising Debt and the Middle-Class Squeeze--An Update to 2007," Economics Working Paper Archive wp_589, Levy Economics Institute.
    32. Eric D. Gould & Bruce A. Weinberg & David B. Mustard, 2002. "Crime Rates And Local Labor Market Opportunities In The United States: 1979-1997," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 45-61, February.
    33. Rohit, 2011. "Income Distribution, Irrational Exuberance, and Growth," Review of Radical Political Economics, Union for Radical Political Economics, vol. 43(4), pages 449-466, December.
    34. Daniel Sullivan & Till von Wachter, 2009. "Job Displacement and Mortality: An Analysis Using Administrative Data," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(3), pages 1265-1306.
    35. Stevens, Ann Huff, 1997. "Persistent Effects of Job Displacement: The Importance of Multiple Job Losses," Journal of Labor Economics, University of Chicago Press, vol. 15(1), pages 165-188, January.
    36. Krueger, Alan B. & Mueller, Andreas I., 2011. "Job Search and Job Finding in a Period of Mass Unemployment: Evidence from High-Frequency Longitudinal Data," IZA Discussion Papers 5450, Institute of Labor Economics (IZA).
    37. Farber, Henry S, 2011. "Job Loss in the Great Recession: Historical Perspective from the Displaced Workers Survey, 1984-2010," IZA Discussion Papers 5696, Institute of Labor Economics (IZA).
    38. Liliana Winkelmann & Rainer Winkelmann, 1998. "Why Are the Unemployed So Unhappy?Evidence from Panel Data," Economica, London School of Economics and Political Science, vol. 65(257), pages 1-15, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. 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.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 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.
    2. Jon Wisman, 2013. "The Growth Trap, Ecological Devastation, and the Promise of Guaranteed Employment," Challenge, Taylor & Francis Journals, vol. 56(2), pages 53-78.
    3. Jon Wisman, 2013. "Government Is Whose Problem?," Journal of Economic Issues, Taylor & Francis Journals, vol. 47(4), pages 911-938.
    4. Younghwan Song, 2018. "Job displacement and subjective well-being: findings from the American Time Use Survey Well-Being Modules," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 52(1), pages 1-13, December.
    5. Richard B. Freeman, 2013. "Failing the Test? The Flexible U.S. Job Market in the Great Recession," The ANNALS of the American Academy of Political and Social Science, , vol. 650(1), pages 78-97, November.
    6. Hale, Jo Mhairi & Dudel, Christian & Lorenti, Angelo, 2020. "Cumulative disparities in the dynamics of working poverty for later-career U.S. workers (2002-2012)," SocArXiv xka5j, Center for Open Science.
    7. Jo M. Hale & Christian Dudel & Angelo Lorenti, 2020. "Cumulative disparities in the dynamics of working poverty for later-career U.S. workers (2002-2012)," MPIDR Working Papers WP-2020-028, Max Planck Institute for Demographic Research, Rostock, Germany.
    8. Jon D. Wisman & Aaron Pacitti, 2014. "What the Rich Won Over the Past 35 Years and What Everyone Else Lost," Working Papers 2014-08, American University, Department of Economics.
    9. Lídia Farré & Francesco Fasani & Hannes Mueller, 2018. "Feeling useless: the effect of unemployment on mental health in the Great Recession," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 7(1), pages 1-34, December.
    10. Jessamyn Schaller & Mariana Zerpa, 2019. "Short-Run Effects of Parental Job Loss on Child Health," American Journal of Health Economics, MIT Press, vol. 5(1), pages 8-41, Winter.
    11. Jan Marcus, 2014. "Does Job Loss Make You Smoke and Gain Weight?," Economica, London School of Economics and Political Science, vol. 81(324), pages 626-648, October.
    12. Song, Younghwan, 2017. "The Effect of Job Displacement on Subjective Well-being," IZA Discussion Papers 10962, Institute of Labor Economics (IZA).
    13. 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.
    14. Till Treeck, 2014. "Did Inequality Cause The U.S. Financial Crisis?," Journal of Economic Surveys, Wiley Blackwell, vol. 28(3), pages 421-448, July.
    15. Koenig, Felix & Manning, Alan & Petrongolo, Barbara, 2014. "Reservation wages and the wage flexibility puzzle," LSE Research Online Documents on Economics 60613, London School of Economics and Political Science, LSE Library.
    16. Marianna Kudlyak & Damba Lkhagvasuren & Roman Sysuyev, 2012. "Sorting by skill over the course of job search," Working Paper 12-03, Federal Reserve Bank of Richmond.
    17. Anne C. Gielen & Jan C. Ours, 2014. "Unhappiness and Job Finding," Economica, London School of Economics and Political Science, vol. 81(323), pages 544-565, July.
    18. Thuy D. Nguyen & Sumedha Gupta & Martin Andersen & Ana Bento & Kosali I. Simon & Coady Wing, 2020. "Impacts of State Reopening Policy on Human Mobility," NBER Working Papers 27235, National Bureau of Economic Research, Inc.
    19. Fujita, Shigeru, 2018. "Declining labor turnover and turbulence," Journal of Monetary Economics, Elsevier, vol. 99(C), pages 1-19.
    20. Philip Jung & Moritz Kuhn, 2019. "Earnings Losses and Labor Mobility Over the Life Cycle," Journal of the European Economic Association, European Economic Association, vol. 17(3), pages 678-724.

    More about this item

    Keywords

    employer of last result; inequality; unemployment; inadequate demand;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • H10 - Public Economics - - Structure and Scope of Government - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:amu:wpaper:2013-12. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Thomas Meal (email available below). General contact details of provider: http://www.american.edu/cas/economics/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.