Events

Job-Guarantee and Minimum Wage – A Solution to Unemployment and Poverty?

AKSOB 903

Presenter’s Name: Dr. Hubert Hieke, Professor of Economics at Schiller International University.

About the Speaker:

Dr. Hubert Hieke is currently professor of economics at Schiller International University (SIU), Germany. He studied economic at the University of Mannheim, Germany and received his Ph.D. in economics at the University of Tennessee, He has taught at Lazarski University at Warsaw (Poland), Arkansas State University (USA), Franklin University (Switzerland), and the American University in Bulgaria. He has taught in exchange programs in Mexico, the Netherlands, France and the USA. Dr. Hieke has been a research fellow at the International University of Germany (IU) and the University of Mannheim. He has published in the areas of financial balances, international trade and finance as well as the fields of labor economics and welfare policies.

Abstract:

The debates about reforming the welfare state and reducing unemployment among low-skilled workers has been ongoing for decades. In Europe and in Germany, most of these proposals resemble mainstream, neoclassical suggestions. Social aspects are often disregarded, or play at best a minor role. Across the Atlantic, a group of heterodox economists have suggested job guarantee programs (JG), coupled with hourly wages, which seem to provide a modest but secure standard of living for the entire working population.

The proposals, often proclaimed by supporters of the so-called Modern Monetary Theory (MMT), have also received considerable attention in Europe and Germany (Wray, Tcherneva, Ehnts). In this paper, we try to analyze whether JG does in fact provide a promising avenue to the persistent problems of long-term unemployment and poverty in European nations, particularly in Germany. In doing so, we analyze whether JG-suggestions are in fact significantly different from mainstream welfare proposals and workfare schemes. Furthermore, we ask whether significantly higher but guaranteed wage rates (relative to current minimum wages) for public work appear feasible and if the public sector appears sufficiently flexible for absorbing millions of unemployed workers within short periods of time. Finally, we compare JG suggestions to alternative concepts such as unconditional basic income (UBI) or income guarantees such as the Germany system of “Hartz IV” or “Bürgergeld.”