The concern about a Federal Jobs Guarantee is that it could be rather a ‘big-government’ sort of solution with lots of bureaucracy and the potential for corruption.
As opposed to what? The current system that allows war spending to provide a third of our GDP? I think you will find, with just a cursory examination of MMT, that all of the economists proposing the job guarantee state quite clearly that the federal involvement should only go as far as funding to make use of the fiat sovereign currency. It would be flexible in its administration by state and local leaders who would decide what “jobs” are created. This would obviously be quite different for a struggling rural small town than for LA or New York. A government-funded program offers much less incentive for corruption and much more potential oversight than does the neoliberal need to create “markets” for every facet of our lives.
The economic investment/benefit of a job guarantee goes well beyond the wages paid. It would also extend to vendors who would provide tools and supplies for whatever projects local leaders would deem valuable to their communities. Converting an empty warehouse into food production or a performance venue would involve a considerable expense that an already thin tax base couldn’t possibly afford but offers no challenge to the currency issuer as long as labor and materials are potentially available. Think of the hard infrastructure, supplies, etc that a Meals-On-Wheels type service would require and its economic impact if all involved were paid instead of relying on volunteers and donations.
Basic Income gives people spending power and lets them decide what jobs they will ‘create.
I doubt that the next Microsoft or Facebook is going to depend upon a $1000 per month stipend. There is also nothing precluding giving a choice of UBI or JG once the JG is established to anchor the economy in labor and set a bottom for private sector employment. Laboring in one’s community offers many social benefits beyond simply earning a paycheck and establishing the workhour as a standard price setter is far more important than most economists realize in controlling inflation via limiting demand.
We can already see the problem with creating demand “on top of” wages via large low paying employers who advise their employees on the details of obtaining benefits of our safety nets. We also have about a decade of inflation caused by a large influx of women into the workforce in the ’60s whose original intent was to elevate their living standards. How’d that work out? Not many women now have the luxury of not working as their added income prevented wages from rising in relation to the productivity they offered.
I’m not saying they should have not gone to work, only that the economic impact they hoped for didn’t last long. As soon as the UBI benefit falls short of providing basic necessities by even one dollar employers are free to use the benefit to their own purpose again. While indexing the benefit to inflation guarantees a self-feeding loop of inflationary pressure, not doing so creates a deflationary condition with any benefit of UBI eventually taking a shortcut to the top by alleviating any responsibility of the employer to the wages of their employees.
