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Eleanor Roosevelt onsite one of the Works Progress Administration Projects, a job guarantee program in the United States.

A job guarantee is an economic policy proposal that aims to create full employment and price stability by having the state promise to hire unemployed workers as an employer of last resort (ELR).[1] It aims to provide a sustainable solution to inflation and unemployment.

The economic policy stance currently dominant around the world uses unemployment as a policy tool to control inflation. When inflation rises, the government pursues contractionary fiscal or monetary policy, with the aim of creating a buffer stock of unemployed people, reducing wage demands, and ultimately inflation.[2] When inflationary expectations subside, expansionary policy aims to produce the opposite effect.

By contrast, in a job guarantee program, a buffer stock of employed people (employed in the job guarantee program) is typically intended to provide the same protection against inflation without the social costs of unemployment, hence potentially fulfilling the dual mandate of full employment and price stability.[1]


A job guarantee is based on a buffer stock principle whereby the public sector offers a fixed wage job to anyone willing and able to work thereby establishing and maintaining a buffer stock of employed workers.[2] This buffer stock expands when private sector activity declines, and declines when private sector activity expands, much like today's unemployed buffer stocks.

A job guarantee thus fulfills an absorption function to minimize the real costs associated with the flux of the private sector. When private sector employment declines, public sector employment will automatically react and increase its payrolls. So in a recession, the increase in public employment will increase net government spending, and stimulate aggregate demand and the economy. Conversely, in a boom, the decline of public sector employment and spending caused by workers leaving their job guarantee jobs for higher paid private sector employment will lessen stimulation, so the job guarantee functions as an automatic stabilizer controlling inflation. The nation always remains fully employed, with a changing mix between private and public sector employment. Since the job guarantee wage is open to everyone, it will functionally become the national minimum wage.[3]

Under a job guarantee, people of working age who are not in full-time education and have less than 35 hours per week of paid employment would be entitled to the balance of 35 hours paid employment, undertaking work of public benefit at the minimum wage, though specifics may change depending on the model. The aim is to replace unemployment and underemployment with paid employment (up to the hours desired by workers), so that those who are at any point in time surplus to the requirements of the private sector (and mainstream public sector) can earn a wage rather than be underemployed or suffer poverty and social exclusion.[4]

A range of income support arrangements, including a generic work-tested benefit payment, could also be available to unemployed people, depending on their circumstances, as an initial subsistence income while arrangements are made to employ them.[citation needed]

Job guarantee theory is often associated with certain post-Keynesian economists,[5] particularly at the Centre of Full Employment and Equity (University of Newcastle, Australia), at the Levy Economics Institute (Bard College), and at University of Missouri – Kansas City including the affiliated Center for Full Employment and Price Stability.[6]

One theory was put forward by Hyman Minsky in 1965.[7][8] Notable job guarantee theories were conceived independently by Bill Mitchell (1998),[9] and Warren Mosler (1997–98).[10] This work was then developed further by L. Randall Wray (1998).[11] A comprehensive treatment of it appears in Mitchell and Muysken (2008).[12]

Inflation control

Further information: NAIBER

A fixed job guarantee wage provides an in-built inflation control mechanism. Mitchell (1998) called the ratio of job guarantee employment to total employment the buffer employment ratio (BER).[13] The BER conditions the overall rate of wage demands. When the BER is high, real wage demands will be correspondingly lower. If inflation exceeds the government's announced target, tighter fiscal and monetary policy would be triggered to increase the BER, which entails workers transferring from the inflating sector to the fixed price job guarantee sector.[13] Ultimately this attenuates the inflation spiral. So instead of a buffer stock of unemployed being used to discipline the distributional struggle, a job guarantee policy achieves this via compositional shifts in employment.

Replacing the currently widely-used measure the non-accelerating inflation rate of unemployment (NAIRU), the BER that results in stable inflation is called the non-accelerating inflation buffer employment ratio (NAIBER).[13] It is a full employment steady state job guarantee level, which is dependent on a range of factors including the path of the economy. There is an issue about the validity of an unchanging nominal anchor in an inflationary environment.[13] A job guarantee wage would be adjusted in line with productivity growth to avoid changing real relativities. Its viability as a nominal anchor relies on the fiscal authorities reining in any private wage-price pressures.

No relative wage effects

Mitchell and Muysken believe that a job guarantee introduces no relative wage effects and the rising demand does not necessarily invoke inflationary pressures because it is, by definition, satisfying the net savings desire of the private sector.[14] Additionally, in today's demand constrained economies, firms are likely to increase capacity utilisation to meet the higher sales volumes. Given that the demand impulse is less than required in the NAIRU economy, if there were any demand-pull inflation it would be lower under a job guarantee.[14] There are no new problems faced by employers who wish to hire labour to meet the higher sales levels. Any initial rise in demand will stimulate private sector employment growth while reducing job guarantee employment and spending. However, these demand pressures are unlikely to lead to accelerating inflation while the job guarantee pool contains workers employable by the private sector.[14]

Wage bargaining

While a job guarantee policy frees wage bargaining from the general threat of unemployment, several factors offset this:

List of job guarantee programs

A billboard informing the public of the presence of Expanded Public Works Programme (EPWP) workers employed at the Groot Winterhoek Wilderness Area. The EPWP is an attempt by government to alleviate South Africa's unemployment crisis.

Programs for adults

Programs for youth


The Labour Party under Ed Miliband went into the 2015 UK general election with a promise to implement a limited job guarantee (specifically, part-time jobs with guaranteed training included for long-term unemployed youth) if elected;[41] however, they lost the election.

Bernie Sanders supports a federal jobs guarantee for the United States and Alexandria Ocasio-Cortez included a jobs-guarantee program as one of her campaign pledges when she ran for, and won, her seat in the U.S. House of Representatives in 2018.[42][43]

See also


  1. ^ a b Wray, L. Randall (23 August 2009). "Job Guarantee". New Economic Perspectives. Retrieved 31 July 2018.
  2. ^ a b corporateName=Commonwealth Parliament; address=Parliament House, Canberra. "Jobs Guarantee". Retrieved 6 April 2021.((cite web)): CS1 maint: multiple names: authors list (link)
  3. ^ "Job Guarantee -". 9 October 2014. Retrieved 6 April 2021.
  4. ^ Tcherneva, Pavlina R. (2018). "The Job Guarantee: Design, Jobs, and Implementation". SSRN Electronic Journal. doi:10.2139/ssrn.3155289. hdl:10419/209145. ISSN 1556-5068. S2CID 169092426.
  5. ^ Wray, L. Randall (August 2001), The Endogenous Money Approach, Center for Full Employment and Price Stability, archived from the original on 15 March 2017, retrieved 5 October 2009
  6. ^ Center for Full Employment and Price Stability
  7. ^ (Minsky 1965)
  8. ^ (Wray 2009)
  9. ^ W.F. Mitchell (1998) "The Buffer Stock Employment Model - Full Employment without a NAIRU" Journal of Economic Issues 32(2), 547-55
  10. ^ W.B. Mosler (1997-98) "Full Employment and Price Stability" Journal of Post Keynesian Economics, 20(2), 167-182
  11. ^ L. Randall Wray (1998) Understanding Modern Money: The Key to Full Employment and Price Stability, Edward Elgar: Northampton, MA.
  12. ^ W.F. Mitchell and J. Muysken (2008). Full Employment Abandoned: Shifting Sands and Policy failures Archived 22 February 2015 at the Wayback Machine,. Edward Elgar: Cheltenham. Revised: January 2009 [1] Archived 24 July 2011 at the Wayback Machine
  13. ^ a b c d[bare URL PDF]
  14. ^ a b c[bare URL PDF]
  15. ^ Mitchell, William F. (June 1998). "The Buffer Stock Employment Model and the NAIRU: The Path to Full Employment". Journal of Economic Issues. 32 (2): 547–555. doi:10.1080/00213624.1998.11506063. ISSN 0021-3624.
  16. ^ "Guaranteed Jobs: 46% Favor This New Dem Big Government Idea". Investor's Business Daily. 2 May 2018.
  17. ^ Leighninger, Robert D. (2007). Long-Range Public Investment: The Forgotten Legacy of the New Deal. Columbia, S.C.: University of South Carolina Press. ISBN 9781570036637.
  18. ^ Ellis, Luci (12 June 2019). "Watching the Invisibles". Reserve Bank of Australia.
  19. ^ Australia, scheme=AGLSTERMS AglsAgent; corporateName=Reserve Bank of. "The Non-Accelerating Inflation Rate of Unemployment (NAIRU) | Explainer | Education". Reserve Bank of Australia. Retrieved 29 June 2023.((cite web)): CS1 maint: multiple names: authors list (link)
  20. ^ "Universal Declaration of Human Rights - Human rights at your fingertips - Human rights at your fingertips | Australian Human Rights Commission". Retrieved 1 December 2022.
  21. ^ Saulnier, Raymond J. (1977). "A Critique of the Humphrey Hawkins Bill". Business Horizons. 20: 20–24. doi:10.1016/0007-6813(77)90084-2.
  22. ^ "Ministerio de Trabajo, Empleo y Seguridad Social". Ministerio de Trabajo, Empleo y Seguridad Social.
  23. ^ Breitkreuz, Rhonda; Stanton, Carley-Jane; Brady, Nurmaiya; Pattison-Williams, John; King, E. D.; Mishra, Chudhury; Swallow, Brent (2017). "The Mahatma Gandhi National Rural Employment Guarantee Scheme: A Policy Solution to Rural Poverty in India?". Development Policy Review. 35 (3): 397–417. doi:10.1111/dpr.12220. ISSN 1467-7679.
  24. ^ Datta, Polly (2009). "Attaining Sustainable Rural Infrastructure through the National Rural Employment Guarantee Scheme in India". Commonwealth Journal of Local Governance: 143–152. doi:10.5130/cjlg.v0i4.1353.
  25. ^ "Expanded Public Works Programme". South African Government.
  26. ^ "World's first universal jobs guarantee experiment starts in Austria | University of Oxford". 2 November 2020. Retrieved 21 June 2023.
  27. ^ Szigetvari, András (3 December 2022). "Pilotprojekt im Marienthal: Wie eine Jobgarantie des AMS das Leben verändert" [PIlot project in Marienthal: How a job guarantee of the AMS changes lives]. Der Standard (in German). Retrieved 28 December 2022.
  28. ^ Kasy, Maximilian; Lehner, Lukas (April 2023). "Employing the Unemployed of Marienthal: Evaluation of a Guaranteed Job Program". Stone Center Working Paper Series (67). doi:10.2139/ssrn.4431385. hdl:10419/272038.
  29. ^ "World's first universal job guarantee boosts wellbeing and eliminates…". INET Oxford. Retrieved 21 June 2023.
  30. ^ Romeo, Nick (10 December 2022). "What Happens When Jobs Are Guaranteed?". The New Yorker. ISSN 0028-792X. Retrieved 21 June 2023.
  31. ^ "Opinion Factsheet". Retrieved 21 June 2023.
  32. ^ "OECD". Retrieved 21 June 2023.
  33. ^ Schutter, Olivier de; Rights, UN Human Rights Council Special Rapporteur on Extreme Poverty and Human (18 April 2023). "The employment guarantee as a tool in the fight against poverty :: report of the Special Rapporteur on Extreme Poverty and Human Rights, Olivier De Schutter". ((cite journal)): Cite journal requires |journal= (help)
  34. ^ Unit (JCPI), Job Creation through Public Investment (2 September 2021). "Public Employment Initiatives and the COVID-19 crisis". Retrieved 21 June 2023.
  35. ^ Park, Jeong (3 March 2021). "Guaranteed work: California commission calls for government jobs program after pandemic". Sacramento Bee. Retrieved 3 February 2024.
  36. ^ a b "The Youth Guarantee". European Commission.
  37. ^ ESCUDERO, VERÓNICA (August 2017). "The European Youth Guarantee: A systematic review of its implementation across countries" (PDF). International Labour Office Research Department Working Papers (21): 1.
  38. ^ Hummeluhr, Niels (November 1997). "Youth guarantees in the Nordic countries" (PDF). ((cite journal)): Cite journal requires |journal= (help)
  39. ^ ESCUDERO, VERÓNICA (August 2017). "The European Youth Guarantee: A systematic review of its implementation across countries" (PDF). International Labour Office Research Department Working Papers (21): 2.
  40. ^ Pem, Damchoe (12 September 2015). "Guaranteed Employment Program going strong but can improve". The Bhutanese. Retrieved 3 February 2024.
  41. ^ "Labour extends jobs guarantee for long-term unemployed". BBC News. 10 March 2014. Retrieved 6 January 2017.
  42. ^ Paddison, Laura (6 July 2018). "What Is A Federal Jobs Guarantee?". HuffPost. Retrieved 3 March 2020.
  43. ^ Goldstein, Steve (27 June 2018). "Jobs-guarantee idea gets new focus after Ocasio-Cortez victory". MarketWatch. Retrieved 4 March 2020.


  • Minsky, H.P. (1965), The Role of Employment Policy, in M.S. Gordon (ed.), Poverty in America, San Francisco, CA: Chandler Publishing Company.((citation)): CS1 maint: postscript (link)

Further reading[edit]