8.4 The JG/ ELR and real world experience
There have been many job creation programs implemented around the world, some of which were narrowly targeted while others were broad-based. The American New Deal included several moderately inclusive programs such as the Civilian Conservation Corps and the Works Progress Administration. Sweden developed broad-based employment programs that virtually guaranteed access to jobs (Ginsburg 1983). From World War II until the 1970s, a number of countries, including Australia, maintained a close approximation to full employment (measured unemployment below 2%) through a combination of high aggregate demand plus loosely coordinated direct job creation. (Often there would be an informal “employer of last resort”, such as the national railroads, and the army, that would hire just about anyone.) As Mitchell and Muysken (2008) argued, a national commitment to full employment spurred government to implement policies that created jobs, even if it did not explicitly embrace a national and universal JG/ ELR program.
During the Great Depression of the 1930s, like many other nations, the United States adopted several jobs programs. These were not part of a universal JG/ ELR program, but the New Deal programs were huge, and had lasting effects, in the form of public buildings, dams, roads, national parks, and trails that still serve America. For example, workers in the WPA (Works Progress Administration):
shouldered the tasks that began to transform the physical face of America. They built roads and schools and bridges and dams. The Cow Palace in San Francisco, LaGuardia Airport in New York City, and National (now Reagan) Airport in Washington, DC, the Timberline Lodge in Oregon, the Outer Drive Bridge on Chicago’s Lake Shore Drive, the River Walk in San Antonio. ... Its workers sewed clothes and stuffed mattresses and repaired toys; served hot lunches to schoolchildren; ministered to the sick; delivered library books to remote hamlets by horseback; rescued flood victims; painted giant murals on the walls of hospitals, high schools, courthouses, and city halls; performed plays and played music before eager audiences; and wrote guides to the forty-eight states that even today remain models for what such books should be. And when the clouds of an oncoming world war loomed over the United States, it was the WPA’s workers who modernized the army and air bases and trained in vast numbers to supply the nation’s military needs. (Taylor, 2008)
The New Deal jobs programs employed 13 million people; the WPA was the biggest program, employing 8.5 million, lasting eight years and spending about $ 10.5 billion. (Taylor, 2008: 3) It took a broken country and in many important respects helped to not only revive it, but to bring it into the twentieth century. The WPA built 650,000 miles of roads, 78,000 bridges, 125,000 civilian and military buildings, 700 miles of airport runways; it fed 900 million hot lunches to kids, operated 1,500 nursery schools, gave concerts before audiences of 150 million, and created 475,000 works of art. It transformed and modernized America (Taylor, 2008: 523–24).
Dimitri Papadimitriou summarizes a number of real world experiences with direct job creation by government, several of them in developing countries:
direct public-service job creation programs by governments have a history of long-term positive results. Throughout the last century, the United States, Sweden, India, South Africa, Argentina, Ethiopia, South Korea, Peru, Bangladesh, Ghana, Cambodia and Chile, among others, have intermittently adopted policies that made them “employers of last resort” –a term coined by economist Hyman Minsky in the 1960s –when private sector demand wasn’t sufficient. South Korea, for example, during the meltdown of 1997–‘ 98, implemented a Master Plan for Tackling Unemployment that accounted for 10 percent of government expenditure. It employed workers on public projects that included cultivating forests, building small public facilities, repairing public utilities, environmental cleanup work, staffing community and welfare centers, and information/ technology-related projects targeted at the young and computer-literate. The overall economy expanded and thrived in the aftermath. (http:// www.latimes.com/news/opinion/ la-oe-papadimitriou-job-creation-20120105,0,607208.story?track=rss&mid=56)
aftermath. (http:// www.latimes.com/ news/ opinion/ la-oe-papadimitriou-job-creation-20120105,0,607208. story? track = rss& mid = 56)
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For more recent examples, we will turn to Argentina and India.
In the aftermath of its economic crisis that came with the collapse of its currency
board, Argentina created Plan Jefes y Jefas that guaranteed a job for poor heads of households (Tcherneva and Wray 2005). The program successfully created 2 million new jobs that not only provided employment and income for poor families, but also provided needed services and free goods to poor neighborhoods. More recently, India passed the National Rural Employment Guarantee Act (2005) that commits the government to providing employment in a public works project to any adult living in a rural area. The job must be available within 15 days of registration, and must provide employment for a minimum of 100 days per year (Hirway, 2006). These programs represent a relatively explicit recognition that government can and should act as employer of last resort. Indeed, India’s program is seen as part of a commitment to a human right: the right to paid employment.
These experiences allow us to move from the realm of theory to the reality of practice. Many of the fears of the critics of direct job creation programs have been shown to be fallacious. Job creation, even on a massive scale and under difficult circumstances, can be successful. Participants welcomed the chance to work, viewing participation as empowering. As the Jefes experience shows, the program can be democratically implemented, increasing participation in the political process, and with relatively few instances of corruption and bureaucratic waste. Useful projects can be undertaken. Even with a huge program that employed 5 percent of the population, communities were able to find useful work for participants. Jefes reduced social unrest, and provided demand for private sector production.
Could a program like Jefes work elsewhere? At the very least, we can learn from the program’s successes and failures. As one of the Argentinean organizers put it to me, “The people that actually have the answers are the ones with the needs, those that suffer from starvation. If you target your policies to these people you cannot go wrong. This government did a good job; they addressed the root of the problem. ... They didn’t look to the top; they went straight to the bottom” (See Tcherneva and Wray 2005).
In a sense, the JG/ ELR program really is targeted “to the bottom” since it “hires off the bottom”, offering a job to those left behind. Its wage and benefit package is the lowest, setting the minimum standard that private employers can offer. It does not try to outbid the private sector for workers, but rather takes those who cannot find a job. Further, by decentralizing the program, it allows the local communities to create the projects and organize the program. The local community probably has a better idea of the community’s needs, both in terms of jobs and in terms of projects. Hence it is a “bottom up” alternative to the more typical “trickle down” approach to job creation.
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