The radical idea of giving everyone a job

There is a new radical idea in town. It goes like this: Government should give everyone jobless person a job. It is called the “federal job guarantee” scheme. The basic promise is what you suspect – there will be no more jobless person in Malaysia anymore.

Zero unemployment.

Last week, I wrote about how we are inching nearer a million people without a job. On the same day, the Department of Statistics stated that the unemployment numbers have shot up to 826,100 and it seems that the unemployment rate will increase until the end of the year.

The recession is seeing no signs of slowing down. At the end of the loan moratorium and wage-subsidy scheme, the employment haemorrhage will worsen. When businesses cannot spend, they will lay off. When people lose their jobs, they cannot spend. When people cannot spend, businesses will not spend and lay off even more than before.

This explains why an Elizabethan I concept from 400 years ago is now making it to the mainstream again. In the United States, more and more progressives like Bernie Sanders and Alexandria-Ocasio Cortez are key proponents of this revised, radical idea.

The right to a job

At its core, the job guarantee scheme subscribes to a notion that everyone has a right to a decent job with decent pay. The Universal Declaration of Human Rights in the Western world holds this to be true.

From the time of Martin Luther King and Franklin Delano Roosevelt, the “right to a useful and remunerative job” believes that an individual could not be free without economic security and independence that a job could provide.

Image for post

With the cyclical economic recessions, the pathbreaking automation and permanent effects of globalisation, more and more Malaysians will lose their right to a job, with severe consequence to their livelihoods.

A job not only comes with a paycheck, but it also provides certainty and resilience against changing economic fluctuations. It provides meaning to a person’s existence and it helps people become their best selves and contribute to their community.

The blue-sky, radical thinking of a job guarantee will consign unemployment and its misery to the dustbins of history. The two great failures of our economy – unemployment and inequality – would also now have a cushion to buffer, creating millions of public-sector jobs while boosting the GDP growth.

India has tried this before, although only for the rural areas. Researchers from UC San Diego found that job guarantee schemes bring out shocking effects. Low-income households increased earnings by 13.3%, employment in both the public and private sector increased, and there is an increase in entrepreneurship that sparked creativity and innovation. There is a positive multiplier effect.

Stopping the bleeding of mass unemployment

If many people lose their jobs at once, the only guaranteed outcome is more people will lose their jobs. Mass unemployment is like a virus, where it could spread geographically and communally.

For instance, if three people in Klang have decided to renovate their house with a contractor, but they came home one day without a job, they will most likely stop the renovating work on the house. If they stop spending on the house renovation, the renovators will suffer an immediate loss of income. The renovating company would most likely cut its overhead by laying off some workers, and this ripple effect will continue without discrimination.

Malaysian poverty is a real problem | The Star

In Malaysia, a jobs guarantee programme could also help the poorest and most marginalised in society. What we know is that unemployment discriminates. It has a worse impact on Sabahans and Indians, and it is particularly acute on the youths.

Correcting these inner inequalities relating to employment is one of the biggest benefits of a jobs guaranteed programme. People who face barriers to employment would now find a job in the public-sector that is guaranteed by the government. Regions with high-employment like Terengganu, Sabah, and Kelantan would also be revitalised with middle-class households benefiting alongside the poorest in the community.

If we are able to stem the effects of mass unemployment – coming either from automation, recession, or globalisation – we are also able to reduce the negative side-effects of unemployment.

The non-monetary effects like loss of social capital, depression, suicides, crime would be reduced too when people have a sense of meaning in what they do. If an unemployed person knows that they are now doing work that is meaningful and important, they will likely find happiness in their jobs.

But this is too radical

There is a reason why this has not been pursued to its fullest anywhere in the world. The amount of work and services that need to be scaled up to cater for something so dramatic as a job guaranteed scheme is often underestimated.

Many have claimed that the idea of matching jobless people to the right jobs is overly utopian. For instance, constructing a building is not merely about adding more jobless people to the task. It requires hiring crane operators and electricians trained in that skill. Without social work or early-childhood certificate, care-based work and preschool work could not be filled so easily.

The other big piece of the puzzle is people with barriers to employment that are considered significant like addiction, criminal history, and mental health issues. What we want was to provide real jobs to people, but what we might end up with would be a ‘theatre of a job’ instead.

Second, the kind of jobs that are most likely available under a jobs guarantee scheme is menial labour, like picking up trash or cutting grasses or transporting construction material. It is unlikely that the bulk of work is the middle-class work. This would make it unappealing to jobless people.

Worse, the jobs that are given under a government scheme may not contribute to skills that would make them more employable. If the idea was to provide direct public employment as a way-in for participants to eventually be hired by private employers, then this might fail. Because employers are likely to think that the jobs under government schemes to be of little value.

Third, cost. The only way to succeed in the federal jobs guarantee scheme is to go big. This would require tens or even hundreds of billions of ringgit a year, and this is especially worse in an economic recession when the country is cash strapped.

If the government is prepared to spend an enormous sum that would fundamentally alter how we view jobs and livelihoods, then it must be done well. What we are fearful of is a huge sum being thrown down the drain and our economy, and our people are worse off than before.

Is this worth the experiment?

The list of criticisms against the federal jobs guarantee scheme will continue to grow with intensity. The question we have to ask is whether this policy idea is still worth exploring.

Pavlina Tcherneva, economics head at New York University’s Bard College, thinks so. To her, it is about reframing how we look at jobs.

Bard Economist Pavlina Tcherneva and International Collaborators Are  Rethinking How We Work

We could look at jobs as a missing piece of the safety net. We believe Malaysians should have a safe retirement after years of battling, that is why we provide mandatory retirement plans. We believe that no one should go uncompensated for an accident or injury at the workplace; that is why we offer social security. We believe no one should go live life too poor, that is why we provide direct cash transfers and a minimum wage.

Or we could see jobs as a form of rights. If we believe that public education is a right for all Malaysians, then we do not scrap education simply because we have not been performing this well and many are poorly educated in the country. Just because our policies are broken doesn’t mean that we have to remove them entirely.

We still do them because there is something fundamental that is worth protecting. Economists describe a certain level of unemployment as “natural unemployment”, and they have never trespassed the scary world of zero unemployment.

Living under grey clouds, we have forgotten blue skies.

(Revised article published on Malaysiakini).

Image source:

  1. Medium
  2. The Star
  3. Bard College

Leave a Comment

Your email address will not be published. Required fields are marked *