A just transition needs a job guarantee

NEW YORK — The climate crisis will wipe out millions of jobs long before the feared robots do. It is estimated that heat stress alone will eliminate the equivalent of 80 million full-time jobs by 2030, not counting those lost as a result of wildfires, floods, storms, and other extreme weather events. These will come on the heels of the historically unprecedented 255 million job losses globally in 2020. With recent developments having thrown predictive climate models off their scale, the odds are that expected climate-related employment losses have also been underestimated.

This year’s brutal summer should have made it clear that no place, person, or job is safe from the ravages of climate change. Yet, economists in the United States have been fretting over an “overheating” economy, deliberating whether policymakers should tighten credit conditions and clip the pace of employment and income growth in order to fight price increases stemming from supply-chain bottlenecks and sectoral disruptions. Working families thus face the threat of not one but two heatwaves: the bankrupt orthodox view that inflation must be fought with unemployment, and the looming job losses from global warming.

A job guarantee is an antidote to both. It is a public-employment policy that ensures a decent job at a family-sustaining wage, with benefits, to any person who needs one, and it performs this function in a way that tempers inflationary pressures. It is also the clearest answer to the international consensus, enshrined in the 2015 Paris climate agreement, that any climate action must uphold a commitment to “the imperatives of a just transition of the workforce, and the creation of decent work and quality jobs in accordance with nationally defined development priorities”.

Hence, when the US Congress drafted the Green New Deal (GND) resolution, informed observers singled out its proposal for a federal job guarantee as the crucial element. Likewise, the 2020 “democratising work” manifesto, which appeared in 43 newspapers in 27 languages around the world, identified the right to employment as a core demand and a critical component in decarbonising the economy. The International Labour Organisation also has formally recognised the idea as the best means for shaping “a fair, inclusive and secure future of work with full, productive, and freely chosen employment and decent work for all”.

If “decent work for all” is to become an actionable policy benchmark, access to a living-wage job must be guaranteed to everyone, not merely implied in the text of stimulus packages and other policies. The GND’s federal job guarantee would provide the missing jobs that conventional market mechanisms fail to supply, spearheading projects that serve a public purpose, including tackling the most urgent climate-related challenges. 

As I explain in my book, The Case for a Job Guarantee, the benefits of such a programme are manifold. From Franklin D. Roosevelt’s presidency to the GND resolution, a job guarantee has always been a “green” idea aimed at preserving both people and the planet. It ensures a transitional job offer to all working families, including those whose homes, businesses, and livelihoods are being washed away by floods and incinerated by fires. It is the bridge to decent jobs for fossil-fuel workers once the green transition brings an end to extractive industries. It provides the very employment needed to rebuild communities and mend the planet, and opens up the shortest path to a post-pandemic recovery.

Beyond its function as an employment safety net, the job guarantee is a critical mechanism for heading off economic instability, whether this stems from structural shifts in globalisation, technological change or garden-variety recessions. The programme would swell in times of greatest need, when prices, incomes, and private employment are declining. But it would also be self-limiting, shrinking when other parts of the economy furnish their share of well-paying jobs.

Thus, much like other automatic stabilisers that have long been preferred to generalised stimulus policies, the job guarantee will fluctuate. The difference is that, unlike other stabilisers, it has the potential to help remake the economy. 

With a job guarantee in place, economists could no longer justify unemployment as a “natural tribute” in the fight against inflation. But in its absence, “decent work for all” will remain an empty slogan, and unemployment a perennial threat. We cannot speak earnestly of inclusion if people of colour, caregivers, those with disabilities, and youth are systematically excluded from good jobs. 

Job guarantee proposals are extremely popular, and not just with leading climate organisations like the Sunrise Movement, which has been organising around it. Coal-mining communities in West Virginia and Kentucky are beginning to see its transformative potential. From New Englandand Appalachia to California, a growing coalition of individuals, organisations, and civil-rights leaders in the US is making the policy a central demand.

A job guarantee enjoys the kind of bipartisan support that few other programmes can claim. In a 2020 poll in the US, 79 per cent of respondents spanning “demographic, partisan, and gender lines” backed the idea, as did 72 per cent of respondents in a UK poll taken around the same time. In France, 79 per cent of voters support a federal job guarantee, and the policy has been endorsed by the mayors of Paris and Lille. More recently, a stunning 93 per cent of US respondents supported a national employment and training initiative that creates paid work for the unemployed, as a component of COVID-19 recovery efforts.

Moreover, the COVID-19 crisis has shown that finance is not scarce. Country after country has passed large budgets to fight the pandemic. It is no accident that the biggest spending increases were in monetarily sovereign countries that issue and control their currencies, and where government finance is provided by central banks and finance ministries. The size of stimulus efforts in 2020 ranged from 18.7 per cent of GDP in Canada to 21.8 per cent in Japan and 26.9 per cent in the US. Countries that lack monetary sovereignty had much less fiscal space available to respond to the pandemic, a challenge that will surely hinder their climate responses, too.

But whether governments understand it or not, the cost of inaction or delayed action in tackling the climate crisis is already baked into every country’s budget. Misplaced fiscal rectitude cannot be allowed to cripple a bold policy agenda. As US House Budget Committee Chair John Yarmuth recently pointed out, monetarily sovereign countries might face resource and inflation constraints, but they cannot run out of funding. And as the biggest polluters, they have a moral obligation to launch a global Green Marshall Plan.

The planet is not a paying customer. We don’t have the luxury of time to structure the “correct” commercial return on climate-related investments, or to nudge the right private actors or incentivise markets to tackle the problem. For a challenge of planetary proportions that offers no obvious financial return, governments must act boldly, directly, and in concert to craft a just transition for all.

As climate scientists have long warned, even the most sophisticated models do not fully account for potential tipping points, feedback loops, and hidden heating sources. The same is true for economic models. Problems like mass unemployment, extreme inequality, and the absence of good, stable jobs create their own feedback dynamics and tipping points. Historically, these have included the rise of authoritarianism, jingoism, xenophobia, prejudice, racial and ethnic tension, democratic breakdown, and social, economic, and political instability. 

The precise content of climate justice will remain contested terrain, as claims range from more modest demands for good jobs to more radical visions of ending extractive capitalism and economic imperialism. There are myriad ways to arrange human economic affairs. The job guarantee is the basic foundation from which to build solutions to the economic challenges in front of us.

Pavlina R. Tcherneva, associate professor of economics at Bard College, is a research scholar at the Levy Economics Institute and author of The Case for a Job Guarantee. Copyright: Project Syndicate, 2021. www.project-syndicate.org