Should The Government Eliminate Unemployment?
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Politics and Activism

Should The Government Eliminate Unemployment?

If they have the ability to, what's stopping them?

Should The Government Eliminate Unemployment?

Involuntary unemployment is probably the biggest problem an economy can face. Being unemployed has many implications. Unemployed people have less income. Less income leads to less spending. Less spending leads to less demand for employees to hire and then so on. Being unemployed also has societal implications as well. Those who have less income to provide for themselves and their dependents are more likely to resort to illegal and dangerous activity as a way to receive income.

But we can't just force people to have jobs, we can't fault them if there are no openings around them. And we can't force businesses either, they might not be able to afford to hire someone else. The only way they're going to be able to employ more workers is if their revenues go up. So if we want more consumers spending their money, and more money for the consumers to spend, the best option would simply be to let the government provide a job to anyone willing and able to work, thus eliminating involuntary unemployment. This makes sense for so many reasons.

The government already gives unemployed people money.

Whether you disagree politically, welfare exists and is very prevalent in advanced economies. But the benefits received won't have recipients living like royalty. Also, many people have a personal pride in earning their money, and unemployment benefits could be seen as demoralizing. In a way, the idea of the government providing a job guarantee to anyone able and willing to work is less politically polarizing than welfare. Liberals will find comfort that everyone will be able to receive an income and provide for themselves while conservatives won't take issue in the government giving people money, because they worked for it. To me this seems like a political win win.

A job guarantee could possibly make markets more free.

Left leaning economists for the most part agree that markets are generally the best way to organize economic activity. But they sometimes support government corrections for market failures if it means keeping people from falling through the cracks. A job guarantee once again could serve as the best of both worlds. If the federal government guarantees a job for everyone willing and able to work, employees will have much greater job security, and a promised option to earn income no matter what. Then, the government can set a fixed price for labor, say $11 an hour. If every citizen is guaranteed an option to make that much, then there is no need to put a price floor on the cost of labor for the private sector, because workers will always be able to make a higher wage. This will allow businesses to pay as much or as little as they want, and they would have to create better incentives to convince people to become employees. This removal of a price floor restriction could possibly lower costs for businesses.

We need more public goods, anyway. gives the infrastructure of the United States a D+ rating. What better job could the government give someone than a job that benefits everyone? As our infrastructure grade clearly shows, there is a lot to do, and the government will easily have enough people to improve the infrastructure if they choose to. Another option could be clean energy. Renewable energy should be a policy priority in the near future, it's cleaner, and will eventually be cheaper if more cities and households have access to the technology. The job guarantee can employ people to build clean energy technology, increasing access.

This has been done in the past, kind of.

As Paul Krugman explains, public investment is good for an economy in need of a boost. A job guarantee would be the best sort of public investment project possible, as it would raise people's incomes, and increase the amount of goods and services produced at the same time. It's been done before. Consider this a permanent version of the New Deal.

How will the government pay for this?

Click here.

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This article has not been reviewed by Odyssey HQ and solely reflects the ideas and opinions of the creator.
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