2007 - 2020

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.”

March on Washington | Date, Summary, Significance, & Facts ...

 

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?

Comments (10)

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  1. squigglypen says:

    So is independence. …. then you don’t have to deal with our ancient enemies south of the border…just look after our own clan and adopt what is fair for us.
    Read about the precariat….

    1. Alex Kashko says:

      Aye, we just need to worry about our own rich entitled establishment screwing things up in order to line their own pockets and boost their power ( remember power=money and the equation is symmetric).

      Sorry I do not think Independence will be a silver bullet, and we will have to fight as hard, if not harder, after independence, in order to make Scotland a better country. The extra money we get will not be enough unless we are willing to fight to ensure (1) employment is a choice -“luxury communism” based on robotics. (2) Neoliberalism dies completely, for which we need a really good education system that teaches thinking as well as facts and basic skills.

  2. Alex Kashko says:

    “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.”

    I predict Firms would reduce wages by the UBI but keep prices the same. Or they would onshore workers from poorer countries or offshore what work they could.

    Remember capitalism is by definition totally unpatriotic: capitalists will go anywhere to reduce costs or pass them on to others.

    I think UBI would have to be at least equal to the minimum wage.

    It is not clear what would happen to pensions, the self employed and creatives. Perhaps tax on incomes over the UBI level should be raised (50% flat, graduated or what).

    People tend to regard their wages as a proxy for their worth and a source of status. We must break this link.

    The point here made the scheme seem good but the devil is always in the details.

    Strong government supervision would be essential and pilloried by business and the media.

    Overall, nice idea but needs tidying up.

  3. Alan Ritchie says:

    “Imagine a 25 year old Engineering graduate who takes a JG programme job to build community wind farm.”

    What does that actually look like. Assume that community already owns the land. You need substantial funding from somewhere, maybe a national investment bank, to actually buy the wind turbine, the concrete for the foundations, and hire the cranes, etc to erect it. You presumably need a chartered engineer to sign off on it, ideally someone with lots of experience of similar projects. The time requirement of inexperienced graduate engineers is a tiny part of a much larger project. If the project is worth doing, why not use the investment bank funding to simply hire an engineering firm, and have the engineering firm hire a graduate to cope with the added workload, who can then be trained towards chartership.

    But the timescale for this isn’t suitable for a JG scheme responding to blips in local unemployment. You want a sustained programme of investment over several years. Same with railway electification, etc. If you get laid off today, presumably you want a JG job tomorrow, but you don’t want to be tied into a JG contract in case you get a better job in a months time.

  4. Alan Ritchie says:

    “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”

    So raise taxes on the wealthier recipients. UBI isn’t about creating money, it is about primarily about the distribution of resources in a very rich country where many people are forced to turn to food banks because they cannot afford to eat and pay household bills, and many people are classed as employed but don’t have a stable income from week to week. If you want to create currency because you are in the middle of a deflationary demand shock, then you can increase the UBI. But otherwise you change government income and spending to hit your inflation target.

    “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)”
    If they could do that, why don’t they do it now? If they need to compete in a market today, they can’t increase the price of goods beyond what their competitors are charging either now or after a UBI. Rents probably go up because we have a shortage of housing. But the solution is to fix the housing market.

  5. grafter says:

    “And when the virus is eventually overcome, however long that may take, we cannot return to normality under Tory austerity.”. Overcome the virus ? Have we “overcome” the flu virus or the common cold virus. ? Increased austerity will result from this manufactured pandemic no matter which political party is in power. Like unfolding events it is outwith their control. The future agenda will be set by the 1%.

  6. Paul Codd says:

    How would a job guarantee scheme be any more than a glorified YTS as devised and offered by Margaret Thatcher? Prices have been rising for decades. Wages have been static for over a decade. That current reality is a lot worse than the “spiral” the author alludes to. Almost everything said in the article about UBI is wholly or substantively incorrect. Corporates have already been bailed out to the tune of £11bn with another £30bn in the pipeline. That’s new money given away to corporate cronies in secret deals under NDA. We can afford UBI. We can’t afford a return to glorified workhouses as the author would have us do.

  7. SleepingDog says:

    Why exactly would we want to be “using labour and resources to our maximum capacity”? What is this pedal-to-the-metal ‘productivity’ for? How would this avoid adding to the number of ‘bullshit jobs’, the depletion of natural resources and degradation of natural systems, pollution, over-production, over-consumption, overheating the planet along with the economy?

    Interestingly, this pandemic has highlighted the value of surplus, redundant, trained, skilled and useful labour which can be called back into the workforce during a crisis, as medical professionals were.

  8. Mark Rowantree says:

    I believe that UBI is very simply an idea whose time has come. The damage done to the social, human, economic and political infrastructure of this country since 1979 and indeed before that: as it would be unfair to give Thatcher all the credit are massive and certainly amongst scholars widely documented.
    This already precarious situation was made worse by flawed Tory drives for austerity. This denuded the entire public sector of experience, capability and resilience. What the present crisis has outlined in stark relief is the criminal folly of reducing the public sector to its core functions then hiving off the ‘unwanted excess fat’ to rapacious speculators who abuse the staff and exploit their near monopoly position to extort the public purse for corporate gain.
    All in all just another ‘Very British Coup’ and one that Scotland must avoid.

  9. Dan says:

    Cameron Archibald clearly needs to study up on UBI as his criticisms are simply untrue as others have stated, it is a policy that can stand on its own and provide a starting place to work from.

    Advocates for Job Guarantee programme have to be very careful about what they are calling for, UBI would be essential for JGP to be successful but there are pitfalls especially so without a UBI. I would suggest reading up on the workhouses, workfare and the iron rice bowl.

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