Home > Uncategorized > A job guarantee as an alternative to welfare: the Argentine experience

A job guarantee as an alternative to welfare: the Argentine experience

Is a job guarantee a viable alternative to traditional welfare? Pavline Tcherneva reviews the Argentine ‘plan Jefes’ (based on fieldwork). Her article shows, in my opinion, that:

1) People prefer (low wage) work to welfare
2) People enrolled in a ‘job guarantee plan’ are perfectly able to design their own productive community and society oriented activities and act as entrepreneurs they do not really seem to need guidance from the government. Which means that the main criticism of such programs (useless work) falls apart.
3) Not everybody likes the social changes which are engendered by such activities
4) The ‘human capital’ embedded in the labour force as well as the social capital of communities seem to increase

Pavlina’s own summary:

The Employer of Last Resort as an Institution for Change

Over the past decade and a half the ability of the employer-of-last-resort (ELR) proposal to deliver full employment and price stability has been discussed at length in the literature. A different issue has received relatively little attention—namely, the concern that even when the ELR produces these macroeconomic benefits, it does so by offering “low-paying” “dead-end” jobs, further denigrating the unemployed. In this context, the important buffer stock feature of the ELR is misconstrued as a hydraulic mechanism that prioritizes macroeconomic stability over the program’s benefits to the unemployed.

This paper argues that the two objectives are not mutually exclusive by revisiting Argentina’s experience with Plan Jefes and its subsequent reform. Plan Jefes is the only direct job creation program in the world specifically modeled after the modern ELR proposal developed in the United States. With respect to macroeconomic stability, the paper reviews how it exhibits some of the key stabilizing features of ELR that have been postulated in the literature, even though it was not designed as an unconditional job guarantee. Plan Jefes also illustrated that public employment programs can have a transformative impact on persistent socioeconomic problems such as poverty and gender disparity. Women—by far the largest group of program beneficiaries—report key benefits to their communities, families, children, and (importantly) themselves from participation in Jefes.

Argentina’s experience shows that direct job creation programs that offer employment at a base wage can have the unique capacity to empower and undermine prevailing structures that produce and reproduce poverty and gender disparities. Because the latter two problems are multidimensional, the ELR cannot be treated as a panacea, but rather as an important policy tool that remedies some of the most entrenched and resilient causes of poverty and gender inequality. The paper examines survey evidence based on narratives by female participants in Jefes to assess these potentially transformative aspects of the ELR proposal.

  1. chdwr
    December 14, 2013 at 7:20 pm

    This might have some limited workability in unindustrialized societies, but in technologically advanced ones….not a chance. It will simply be a slave work state. The solution is making the money system Distributive for the consumer economy in a way that accurately reflects the actual wealth and technologically productive capability of the particular national economy.

  2. Podargus
    December 14, 2013 at 7:34 pm

    A properly structured and administered Job Guarantee scheme would not involve people performing meaningless tasks. There is plenty of work for the public good which needs doing but won’t be done by private concerns because there is no “profit” in it.
    The wage for JG work should be above the poverty line and therefore becomes the minimum wage as well as the base level for income assistance of any type,like age and disability pensions.

    This is basic MMT.

    • chdwr
      December 16, 2013 at 8:23 pm

      With a universal dividend traditional employment would not be absolutely and so universally needed. The answer is to fund such a dividend via an agency countervailing the private banking license.

    • BFWR
      December 23, 2013 at 6:20 pm

      A universal dividend in combination with a rise in the minimum wage might be an effective way to distribute wealth adequately except for the fact that international wage arbitrage would not enable it. A land tax and land reform for all their seeming merits might enable everyone to have their “3 acres and a cow” but it would only create the Speenhamland problem by another means. Transformation first, reform later as needed! That is accomplished by fighting money power with money distributed directly to individuals to guarantee a lifestyle accurately reflective of the wealth of the particular nation, and also taking adult, responsible control of the money system by utilizing a mechanism like a compensated retail discount to consumers so as to eliminate any possible inflation and which discount is rebated to participating retail merchants so they can be whole on their overhead and margins. These two policies create and maintain a virtual and mathematical equilibrium in the most unobtrusive and effective way while freeing the individual from the necessity of employment as technological innovation wed to profit making systems inevitably and increasingly is reducing the rational need for work for pay. Then we can progress en mass toward a future that will enable us to jettison the centuries old failed experiment of homo economicus and get back on an actually evolutionary path toward our actual species designation homo sapiens…wisdom discerning man.

  3. henry1941
    December 16, 2013 at 5:12 pm

    If people have free access to land at the margin, then they can always provide themselves with a livelihood. In practice, this means things like allotments for small scale horticulture and small workshops at nominal rents for artisan activities.

    Otherwise, these “jobs” have got to come from somewhere, and then policy rests on job-creationism.

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