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2 Rutgers J. L. & Urb. Pol'y 64 (2005)
A Comparison of the Macroeconomic Consequences of Basic Income and Job Guarantee Schemes

handle is hein.journals/rutjulp2 and id is 64 raw text is: Rutgers Journal of Law & Urban Policy A COMPARISON OF THE MACROECONOMIC CONSEQUENCES OF BASIC INCOME AND JOB GUARANTEE SCHEMES William Mitchell and Martin Watts' I. INTRODUCTION In this paper we compare and contrast two policy responses to rising income insecurity in the form of proposals to introduce a universal Basic Income (BI) and proposals to introduce a Job Guarantee (JG). Both challenge the prescriptions of the dominant neo-liberal policy agenda. In his 1987 Ely Lecture to the American Economics Association, Princeton economist Alan Blinder described the failure to provide productive employment for all those willing and able to work as one of the major weaknesses of market capitalism. He argued that the failure had been shamefully debilitating since the mid-197os, and that the associated costs make reducing high unemployment a political, economic and moral challenge of the highest order (Blinder 139). The situation remains that governments around the world have abandoned the goal of full employment and are content to pursue the diminished goal of full employability and to impugn the unemployed. The dominant economic orthodoxy has, since the mid-197os, supported policy makers and politicians who have deliberately and persistently constrained their economies under the pretext that the role of policy is to ensure that the economy functions at the so-called natural rate of unemployment. Discretionary monetary and fiscal policy decisions have prevented their economies from generating enough jobs to match the preferences of the labor force, and enough hours of work to match the preferences of those who are employed. The result has been persistently high unemployment and rising levels of underemployment (Mitchell and Carlson). Ironically, highly desirable, labor-intensive projects go undone to the detriment of all (see Mitchell; Wray). The cumulative costs of the forgone output and unemployment are huge and dwarf the costs of alleged microeconomic inefficiency (Mitchell and Watts; Watts and Mitchell). A key outcome of 1 William Mitchell is the Director of the Centre of Full Employment and Equity and a Professor of Economics. Martin Watts is the Deputy-Director of Centre of Full Employment and Equity and an Associate Professor of Economics at the University of Newcastle, NSW, Australia. Vol. 2 * Fall 2005 * No.1

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