Social Europe

  • EU Forward Project
  • YouTube
  • Podcast
  • Books
  • Newsletter
  • Membership

Work for all

Jan Zygmuntowski 3rd November 2020

An EU-wide job guarantee would be a counter-cyclical measure to tackle the health, employment and ecological crises together.

job guarantee
Jan Zygmuntowski

With a cascade of global crises wreaking havoc on our fragile economies, additional expenditure on a job guarantee for the unemployed might seem an extravagance. Are not public health and a just energy transition the priorities now?

Yet as Kim Stanley Robinson puts it, ‘on a warming, carbon-clogged planet there is always more work to be done’. Indeed, the need for work will only grow if we are to sustain even the current level of civilisational development. In a United States context, Robinson points to seven-digit unemployment amid the coronavirus crisis and the proposal for a healthcare public-jobs corps to absorb 100,000 workers.

Rapid creation

Consider how infrastructure was previously built in the US. The rapid creation of the most fundamental infrastructure that serves to this day—from schools, hospitals and bridges to post offices and museums—was possible thanks to the Work Progress Administration in the 1930s. 

In the few years of its existence, the agency managed to create 40,000 new buildings and refurbish another 85,000—not to mention the fantastic cultural offer of theatre, art and music which allowed American culture to blossom and later expand globally. Overall, the agency helped 8.5 million people in times of economic downfall and war.

Pope Francis’ unequivocal support for a ‘universal basic wage’, which would acknowledge ‘noble, essential tasks’, comes from his grassroots work in Argentina with the cartoneros (litter pickers and recyclers) employed by Plan Jefes. When unemployment peaked at 25 per cent in May 2002, the government stepped in and directly financed jobs, in collaboration with local governments and non-governmental organisations. It is another effective example of how to think about unemployment together with other social and public-health challenges.

Rooted in theory

Behind such empirical proof of concept, the idea of a job guarantee is rooted in economic theory. Our understanding of a public institution as an ‘employer of last resort’ dates back to the contributions by John Maynard Keynes and Michal Kalecki on the nature of capitalist crises and development. Their focus was on how unemployment was a constant concomitant of the private sector acting conservatively with regards to investment—for example in Keynes’ notion of capitalists’ ‘liquidity preference’.

But modern scholars take this further and the latest book from Pavlina Tcherneva presents a sound economic foundation for a modern-day job guarantee programme. A job guarantee would smooth the business cycle and reduce the huge economic and social toll of the crises we now observe with almost decennial regularity. Its counter-cyclical features would not only make for flexible changes in public spending, stabilising employment at a high level, but buffer shocks to employers as well.

A job guarantee would effectively set a wage floor: anyone with worse remuneration would switch to enjoy the programme, thus introducing a non-bureaucratic minimum wage. In a world where wage growth has become disconnected from productivity gains—approaching 70 per cent of gross domestic product in the 1970s but falling to little over 50 per cent in most EU countries today (see figure)—the employer of last resort becomes the greatest friend of the working class. 

Adjusted wage share of GDP (market prices), 1970-2019

job guarantee
Source: AMECO database

With this self-targeting, such a programme would allow members of minorities and other excluded groups to reach out and actively seek aid, thus reducing reliance on informal, mostly unprotected relationships in the shadow economy. Finally, a job guarantee is no charity—rather, dignifying and empowering the individual to regain stability as a productive member of the community.

Connected crises

The connection between the two crises immediately before us, of public health and mass unemployment, is no coincidence. Unemployment has plagued parts of Europe since the great recession and is becoming more acute as a result of Covid-19. At the same time, public services, especially in health and social care, are understaffed and underfunded.

Although the opposite argument often appears in talks with officials in Brussels, guaranteeing the right to employment and the right to health is inherently the EU’s responsibility. Unemployment is a fundamental and often ignored social determinant of health—as indeed are environmental neglect and devastation. 

The European Commission is charged with reporting on the European Pillar of Social Rights, as part of its Joint Employment Report (JER) with the European Council mandated by article 148 of the Treaty on the Functioning of the European Union. Moreover, article 122 provides a legal basis for the council to implement appropriate measures in the event of serious difficulties and disasters beyond national control. Any fiscal move is deemed appropriate, really, when lives are at stake.

The existing Youth Guarantee programme could be the legal framework allowing for a decisive move towards employing the unemployed to fill gaps in public services. It has proved efficient as a pilot but it is too small and poorly funded for the challenge before us.

Triple threat

An EU job guarantee could, uniquely, tackle together the triple threat of unemployment, public-health deficits and environmental neglect. Its counter-cyclical features render it the ideal instrument for all economic weathers—being put to use only when necessary and then automatically.

The EU is already spending hefty budgets on addressing each of these problems. It suffers from medical deserts and environmental blight. Now it needs to connect the dots. Employing the unemployed to address public-health and environmental challenges means relieving pressures on pre-existing expenditures.

This could be done by expanding the Youth Guarantee. But we need to do a lot more and to rework its funding mechanism. And the countries which suffer a disproportionate share of the burden of these problems are also those with the least fiscal headroom.

These discrepancies were already all too evident in the explosion of migration after the eastern EU enlargement. Over 2.5 million people left Poland alone, in search of better wages and conditions in richer countries. No wonder: a registered nurse in Germany enjoys a monthly wage of almost €2,500, twice that in Poland.

Any country leaving recession sluggishly will be hit by such consequences, leading to major underdevelopment in the medium to long term. Instead of moving people to jobs in better-off regions of Europe, we need a sustainable programme of creating jobs where they are needed. 

Thus, a job guarantee becomes a structural development instrument which boosts employment in disadvantaged regions. If we are to bridge the gaps, such a common fiscal mechanism for the EU is needed.

Jan Zygmuntowski

Jan Zygmuntowski is a lecturer in economics at Kozminski University. He is co-president of the Polish Network of Economy, author of Kapitalizm Sieci (Network Capitalism) and an adviser to the pan-European initiative 'Europe, a patient'.

Harvard University Press Advertisement

Social Europe Ad - Promoting European social policies

We need your help.

Support Social Europe for less than €5 per month and help keep our content freely accessible to everyone. Your support empowers independent publishing and drives the conversations that matter. Thank you very much!

Social Europe Membership

Click here to become a member

Most Recent Articles

09d21a9 The Future of Social Democracy: How the German SPD can Win AgainHenning Meyer
u42198346 How Trump’s Tariff Regime Fuels Global OligarchyGabriel Zucman
u421983462 041df6feef0a 3 Universities Under Siege: A Global Reckoning for Higher EducationManuel Muñiz
u4219836ab582 af42 4743 a271 a4f423d1926d 0 How Trade Unions Can Champion Solidarity in Europe’s Migration DebateNeva Löw
u421983467298feb62884 0 The Weak Strongman: How Trump’s Presidency Emboldens America’s EnemiesTimothy Snyder

Most Popular Articles

u4219834647f 0894ae7ca865 3 Europe’s Businesses Face a Quiet Takeover as US Investors CapitaliseTej Gonza and Timothée Duverger
u4219834674930082ba55 0 Portugal’s Political Earthquake: Centrist Grip Crumbles, Right AscendsEmanuel Ferreira
u421983467e58be8 81f2 4326 80f2 d452cfe9031e 1 “The Universities Are the Enemy”: Why Europe Must Act NowBartosz Rydliński
u42198346761805ea24 2 Trump’s ‘Golden Era’ Fades as European Allies Face Harsh New RealityFerenc Németh and Peter Kreko
startupsgovernment e1744799195663 Governments Are Not StartupsMariana Mazzucato
u421986cbef 2549 4e0c b6c4 b5bb01362b52 0 American SuicideJoschka Fischer
u42198346769d6584 1580 41fe 8c7d 3b9398aa5ec5 1 Why Trump Keeps Winning: The Truth No One AdmitsBo Rothstein
u421983467 a350a084 b098 4970 9834 739dc11b73a5 1 America Is About to Become the Next BrexitJ Bradford DeLong
u4219834676ba1b3a2 b4e1 4c79 960b 6770c60533fa 1 The End of the ‘West’ and Europe’s FutureGuillaume Duval
u421983462e c2ec 4dd2 90a4 b9cfb6856465 1 The Transatlantic Alliance Is Dying—What Comes Next for Europe?Frank Hoffer

S&D Group in the European Parliament advertisement

Cohesion Policy

S&D Position Paper on Cohesion Policy post-2027: a resilient future for European territorial equity”,

Cohesion Policy aims to promote harmonious development and reduce economic, social and territorial disparities between the regions of the Union, and the backwardness of the least favoured regions with a particular focus on rural areas, areas affected by industrial transition and regions suffering from severe and permanent natural or demographic handicaps, such as outermost regions, regions with very low population density, islands, cross-border and mountain regions.

READ THE FULL POSITION PAPER HERE

ETUI advertisement

HESA Magazine Cover

What kind of impact is artificial intelligence (AI) having, or likely to have, on the way we work and the conditions we work under? Discover the latest issue of HesaMag, the ETUI’s health and safety magazine, which considers this question from many angles.

DOWNLOAD HERE

Eurofound advertisement

Ageing workforce
How are minimum wage levels changing in Europe?

In a new Eurofound Talks podcast episode, host Mary McCaughey speaks with Eurofound expert Carlos Vacas Soriano about recent changes to minimum wages in Europe and their implications.

Listeners can delve into the intricacies of Europe's minimum wage dynamics and the driving factors behind these shifts. The conversation also highlights the broader effects of minimum wage changes on income inequality and gender equality.

Listen to the episode for free. Also make sure to subscribe to Eurofound Talks so you don’t miss an episode!

LISTEN NOW

Foundation for European Progressive Studies Advertisement

Spring Issues

The Spring issue of The Progressive Post is out!


Since President Trump’s inauguration, the US – hitherto the cornerstone of Western security – is destabilising the world order it helped to build. The US security umbrella is apparently closing on Europe, Ukraine finds itself less and less protected, and the traditional defender of free trade is now shutting the door to foreign goods, sending stock markets on a rollercoaster. How will the European Union respond to this dramatic landscape change? .


Among this issue’s highlights, we discuss European defence strategies, assess how the US president's recent announcements will impact international trade and explore the risks  and opportunities that algorithms pose for workers.


READ THE MAGAZINE

Hans Böckler Stiftung Advertisement

WSI Report

WSI Minimum Wage Report 2025

The trend towards significant nominal minimum wage increases is continuing this year. In view of falling inflation rates, this translates into a sizeable increase in purchasing power for minimum wage earners in most European countries. The background to this is the implementation of the European Minimum Wage Directive, which has led to a reorientation of minimum wage policy in many countries and is thus boosting the dynamics of minimum wages. Most EU countries are now following the reference values for adequate minimum wages enshrined in the directive, which are 60% of the median wage or 50 % of the average wage. However, for Germany, a structural increase is still necessary to make progress towards an adequate minimum wage.

DOWNLOAD HERE

Social Europe

Our Mission

Team

Article Submission

Advertisements

Membership

Social Europe Archives

Themes Archive

Politics Archive

Economy Archive

Society Archive

Ecology Archive

Miscellaneous

RSS Feed

Legal Disclosure

Privacy Policy

Copyright

Social Europe ISSN 2628-7641