8 Reasons Why The SNP Should Back The Job Guarantee
It was the end of summer in 1963 when more than 200,000 people took part in what is now called the March on Washington for Jobs and Freedom. The march was an alliance of civil rights, labour, and religious organisations demanding civil and economic rights of African Americans and the wider working class community of America. It was at this march where Martin Luther King delivered his famous speech “I have a dream.”
For many of us, our understanding of Martin Luther King and the Civil Rights Movement, unfortunately ends here. Most of us are unaware of many of the specific policy proposals put forward by these progressive leaders from the 1960s, or their deeper beliefs in the failure of US capitalism.
However, in 1966 the A. Philip Randolph Institute published its ambitious manifesto – A “Freedom Budget” For All Americans. The Freedom Budget had seven policy outcomes to be achieved within 10 years and one of these aims was to build a Job Guarantee Programme.
The Job Guarantee policy is possible because a currency issuing government absolutely can be the employer of last resort, guaranteeing dignity and security for all of its citizens. Moreover, it also offers a sustainable solution to price instability and inflation. The idea of a Job Guarantee was incredibly radical at this time, but Martin Luther King and his allies understood its potential to level-up American society and give dignity and power back to to both labour and to those who sought it.
The civil rights movement recognised that leaving social and economic power in the hands of private institutions, with the primary purpose of profit, would never eliminate poverty and inequality.
Skip forward to 2020 and sadly this ambitious document was lost on the shelves of history. The US of today exhibits, in spades, all the negative physical, social and psychological effects that accompany baked-in inequality and institutional racism.
This particular dream of Martin Luther King, whilst recognised for its progressive nature, is still yet nowhere near the finish line.
So why am I writing about this from a Scottish perspective? The constitutional and class struggles faced by Scots are not the same as those faced in the US, surely? And in Scotland we can be proud of our National Health Service and an education system that is free at the point of use for our citizens. Indeed, much of the Freedom Budget is already a reality in many areas of Scottish civic society.
Yet today one thing unites all the world; the coronavirus.
Millions of people across the world are left unemployed as we are forced to lock-down and socially distance ourselves from friends and families. Many businesses have already let go of staff as the financial pressure has been too much to bear and the UK government has not stepped up quickly enough to help, especially for those who are self-employed. And when the virus is eventually overcome, however long that may take, we cannot return to normality under Tory austerity.
The Scottish National Party has already adopted Universal Basic Income, the ultimate form of social security, as policy after independence. Again this was one of the major policy proposals made by Martin Luther King and the Freedom Budget. But now it’s time for the party to take the next big step to empower local communities and empower workers across the country. Here are 8 reasons why the SNP should formally adopt a permanent Job Guarantee programme as policy for an independent Scotland.
1) It’s a vision backed by progressive movements both today and of the past.
It’s already been shown that the Civil Rights movement of the 1960s were advocates for the Job Guarantee. Today the same policy is championed by progressives within the US Democrats. Bernie Sanders, who was formerly in the Democrat race to be candidate for the presidency, and the new sensation Alexandria Ocasio-Cortez are both advocates of a JG programme. It is a fundamental pillar for their plan for a Green New Deal. Even Adam Price, leader of the SNP’s sister party Plaid Cymru, supports a devolved version of the Job Guarantee for Wales. Another progressive also currently sees a Job Guarantee programme in their vision for a Green New Deal, but we’ll get to them soon…
2) It’s upholding a human right.
History has shown that the best way for governments to uphold human rights are when public programmes are formed with the interest of people at heart. An example of this is health. Health is seen as a universal right for all, so our Scottish NHS is free to the point of use. Progressive governments are ones that step in to support the most vulnerable in society. Yet the same is not done for jobs. Article 23 of the Universal Declaration of Human Rights has four points, which are:
“(1) Everyone has the right to work, to free choice of employment, to just and favourable conditions of work and to protection against unemployment.
(2) Everyone, without any discrimination, has the right to equal pay for equal work.
(3) Everyone who works has the right to just and favourable remuneration ensuring for himself and his family an existence worthy of human dignity, and supplemented, if necessary, by other means of social protection.
(4) Everyone has the right to form and to join trade unions for the protection of his interests.”
The first point is of importance. Scotland has surplus labour, meaning the “right” to work is completely undermined. The private sector will not hire workers that they don’t require and so this leaves labour idle. A JG programme would not be focused on profit. Instead it would be focused on using labour and resources to our maximum capacity. But more importantly the programme would be people oriented, meaning local communities shape the jobs they need and want. By allowing citizens to shape employment in their local area we are truly making jobs a right for all those who seek it. Imagine a 25 year old Engineering graduate who takes a JG programme job to build community wind farm. Imagine a underemployed worker, who enjoys their work but is not offered sufficient hours. A JG programme job can offer them the same sector work but with supplement hours. By giving these economic levers to people we are building a society for people.
3) It redefines what a “job” is.
A Job Guarantee programme would seek to redefine what we consider to be a “job”. For too long, some in our society been ignored for their specialised skills or talent. For example artists and creatives are often not valued for the work they do. Why should their skills, which help define who we are as a nation, under-valued because the prime-movers in the private sector believe that art does not deliver sufficient profit. Art can deliver pleasure to many, is that not priceless?
Some forms of labour are simply not recognised within the statistics of a nation’s production. This includes work that is “under the table”, meaning some workers are paid without registering transactions. In many cases there is no transaction at all as the job is done without formal remuneration. This can include work such as cleaning, repairs and maintenance, child and elder care. This also means conventional economic measurements, such as GDP discounts the contribution made to production by women because they perform a disproportionate amount of unpaid work, which supports the ‘formal economy’. The Job Guarantee would recognise and reward these services for the value they create. Thus, the Job Guarantee facilitates the reformation of current accounting conventions, giving greater recognition to the hidden economic work people do. When this is finally recognised, people will be paid a living wage and offered enough hours to sustain a dignified, healthy and flexible lifestyle.
4) It’s part of a Scottish Green New Deal.
When Nicola Sturgeon spoke at a public meeting of the Scottish cabinet in Stirling, I asked her if she saw a Job Guarantee programme as part of her vision for a Scottish Green New Deal. The First Minister confirmed this, saying:
“We’re currently working our way through our Programme for Government, which we’ll set out September, where climate change is and issues like that are absolutely at the heart of what we’re doing. “Things like this (the Job Guarantee) will be fleshed out a little bit more at that point. But ‘yes’ is the short answer. I think we have to look at things like that in order to make the transition in a just and fair way.”
There is a catch. As the former Finance Minister rightfully points out, a Job Guarantee programme would be better implemented if Holyrood had the right powers, either through more devolution or independence. A Job Guarantee is better done with Labour laws and monetary sovereignty. The best route for that is for Scotland to become independent country.
5) It’s economically sensible.
A permanent Job Guarantee programme not only helps progressives step away from neoliberal tropes such as ‘trickle-down’ but it also promotes macroeconomic stability.
The JG is a non-inflationary method for full employment. It hires “off the bottom” by hiring anybody who is looking for work at a fixed living wage, instead of competing with the private sector for workers. The JG sets new social and wage standards for private firms. If businesses cannot offer the same benefits and conditions as the JG programme then the business model is failing and does not socially or economically benefit the majority in society.
The JG operates in a counter-cyclical manner. For example, if wages are rising in the private sector then the JG programme shrinks automatically because workers will move for better pay and opportunities that suit their needs. If the private sector faces a recession then those left unemployed would be absorbed by the JG, thus it is an auto-stabiliser which fights inflation. In times of economic recession government spending goes up, whilst in times of near full employment and economic boom government spending goes down. Thus, due to its twin economic functions as a ‘buffer stock’ and auto-stabiliser this will create stability when launching and running a new Scottish currency, post-independence. The Job Guarantee would also enhance Scotland’s renewable sector, because with such vast resources Scotland can maximise renewable output and create even more new green jobs.
6) It works perfectly with Universal Basic Income
One of the major risks of Universal Basic Income is the vast amount of currency that will be spent into the economy which could result in dangerous levels of inflation. Firms and the richest in society could take advantage of UBI to either raise prices (in order to absorb much of the UBI payments for profit) or use their UBI payments to invest in shares, stocks or real estate which would also result in higher prices and lock out millions of consumers. What we could see is a dangerous wage-price spiral, as was experienced in the 1970s.
The inflationary danger would depend on the UBI model, but all models would not result in a large increase of production to match potential inflationary levels. Yet this is exactly what the Job Guarantee would do. The Job Guarantee would help increase Scotland’s productivity and utilise our resources (labour, skills, physical capital, technology and natural resources) and would put pressure in the private sector not to abuse the power it has gained in the last 40 years.
At the same time UBI would also help the Job Guarantee programme. The Job Guarantee is not a form of social security and cannot help those who are unable to work. But instead of relying on a less bureaucratic welfare system a BI would offer the ultimate safety net to the most vulnerable in society. These two policies combined would offer incredible economic and social freedoms that previous Westminster governments have refused to implement.
7) It’s popular!
Between the 16th-17th of this month YouGov carried out a poll asking voters if they would support the Job Guarantee programme. A massive 72% of voters were supportive of the policy, with only 6% of voters showing any negative views on it. In Scotland support was slightly higher at 74%.
So not only is the Job Guarantee economically sensible, but it is also politically popular. Imagine the SNP going into the 2021 Holyrood elections campaigning behind the Job Guarantee and UBI together; how inspiring would that be to so many voters seeking an alternative?
8) It’s already worked for Argentina
After the collapse of the Argentinian economy, unemployment increased by a significant amount. In April 2002, the government of Argentina responded by implementing a limited employer of last resort program called Plan Jefes de Hogar. This provided jobs for 2 million workers, 5% of the population and 13% of the labour force.
The Jefes program provided 150 pesos per month to a head of household for a minimum of 4 hours of work daily. The participants worked on community services and small construction or maintenance activities, or directed to training programs. The program was limited to households which contained children under 18, persons with handicaps or a pregnant woman. The government expanded the Jefes program with the Programa de Emergencia Laboral (PEL) which expanded the beneficiaries that did not qualify for Jefes.
The total government spend for Jefes and PEL was equal to about 1% of GDP, with nearly 2 million participants. After 4 months, the poverty rate among participating households had fallen nearly 25% and 18% among individuals. There was a significant influx of women into the jefes program, who accounted for 64% of the participants.
The response of the beneficiaries to the Jefes plan has been overwhelmingly positive, as 90% of the workers said they were satisfied or very satisfied.
When examining the wages of Jefes beneficiaries after they re-entered the private sector, 93% of these workers received wages of 150 pesos or above, suggesting that the Jefes wage is the effective minimum wage in the economy.
The macroeconomic impact of the Jefes program is significant. The multiplier effect of the increase in income due to the Jefes benefit is 2.57. The impact of 150 pesos per person per month for 1.8 million people (the number of beneficiaries at the time of these calculations), the annual addition to GDP is calculated to be 8.327 billion pesos, which represents 2.49% of GDP.
Imagine the potential if Argentina had implemented a permanent JG programme that was open to everyone.
So what are we waiting for?
By adopting a state funded Job Guarantee programme, aligned with the above principles, policies and conventions, Scotland has a unique opportunity to build a fairer and more equal society. We may be a long way from making Martin Luther King’s vision become a reality, but by adopting this policy we can at least make one of his dreams come true.
Isn’t that something worth fighting for?