Yesterday, I published my #Festivus waste report, which highlighted $54 billion in truly outlandish waste in government.
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$600/wk Unemployment Insurance cannot deliver the benefits of a $600/wk Job Guarantee. From the outset, I should say JG is not a replacement for UI, no matter what you may have heard. I’ll get to this later, but read this long 🧶 w/ that in mind.
Automatic stabilization: Both $600/wk UI and JG will provide counter cyclical spending. But UI will be weaker. Counter-cyclical stabilization is not just about the absence of income. It is also about the transmission and structure of economy
Firms don't like to hire the unemployed. Mass and long-term unemployment make the problem worse. JG would recover labor markets much faster than a UI of the same amount, both b/c of the higher direct, induced & tertiary employment effects & b/c of private firm hiring preferences.
JG stabilizes spending patterns better. Uncertain job prospects may mean more cautious spending from the unemployed compared to those w/ guaranteed jobs.
UI is temporary, which makes matters worse. Even if it were permanent, it still won't resolve the problem of job scarcity.
Nations who once achieved tight full employment through active labor market policies demonstrate that unemployment does NOT fluctuate the same way it does w/o them. Direct employment, ELR type policies diminish drastically/even eliminate these amplitudes (eg postwar Japan/Sweden)
Surprised so many smart people bought into the idea that $600/wk UI is the same as $600/wk job guarantee (or better) or that JG jobs must be inherently inessential. I\u2019ve addressed this many times & will post a thread later. Trying not to spend precious family time on Twitter.
— Pavlina R Tcherneva (@ptcherneva) December 29, 2020
Automatic stabilization: Both $600/wk UI and JG will provide counter cyclical spending. But UI will be weaker. Counter-cyclical stabilization is not just about the absence of income. It is also about the transmission and structure of economy
Firms don't like to hire the unemployed. Mass and long-term unemployment make the problem worse. JG would recover labor markets much faster than a UI of the same amount, both b/c of the higher direct, induced & tertiary employment effects & b/c of private firm hiring preferences.
JG stabilizes spending patterns better. Uncertain job prospects may mean more cautious spending from the unemployed compared to those w/ guaranteed jobs.
UI is temporary, which makes matters worse. Even if it were permanent, it still won't resolve the problem of job scarcity.
Nations who once achieved tight full employment through active labor market policies demonstrate that unemployment does NOT fluctuate the same way it does w/o them. Direct employment, ELR type policies diminish drastically/even eliminate these amplitudes (eg postwar Japan/Sweden)
True that all the people cherishing the support of IMF or WTO for farm reforms need to cool it down a bit, because that is a model we do not want to emulate to the t in India here.
But here are some issues that deserve to be better discussed by all:
1. People who say we are emulating the Western model of agriculture are way off with this assumption. The process of primitive accumulation, the alienation of their people from their land and the way these 'first-world' countries have pushed their people into Industrial sector +
+ was a merciless phase.
But the same assumption won't work for India, because we have always had a large workforce in agriculture, agri subsidies have always run high, protection has been the hallmark of agriculture and rural representation in the parliament has always been+
+ high. Still, it is our utter failure from the beginning that we have not been able to incentivize the movement of our people to other lucrative sectors.
2. This brings us to the another point of providing MSP on all the commodities and the demand side of the issue that we+
+ conveniently ignore. Here's the thing, Food prices in India have about 65-70% weight in calculating the Consumer Price Index and 25-30% of wholesale price index. These indices affect the general price level in the economy i.e. the inflation. If MSP is offered on all the+
But here are some issues that deserve to be better discussed by all:
WTO backed by Western countries have always wanted to dismantle support systems for farmers in developing countries including India while pumping in federal payments to its farmers. Trump gave 46 billion dollars in 2020 alone to US farmers. pic.twitter.com/0V34ZQQq4J
— Ranveer Singh (@ranveersiiingh) February 4, 2021
1. People who say we are emulating the Western model of agriculture are way off with this assumption. The process of primitive accumulation, the alienation of their people from their land and the way these 'first-world' countries have pushed their people into Industrial sector +
+ was a merciless phase.
But the same assumption won't work for India, because we have always had a large workforce in agriculture, agri subsidies have always run high, protection has been the hallmark of agriculture and rural representation in the parliament has always been+
+ high. Still, it is our utter failure from the beginning that we have not been able to incentivize the movement of our people to other lucrative sectors.
2. This brings us to the another point of providing MSP on all the commodities and the demand side of the issue that we+
+ conveniently ignore. Here's the thing, Food prices in India have about 65-70% weight in calculating the Consumer Price Index and 25-30% of wholesale price index. These indices affect the general price level in the economy i.e. the inflation. If MSP is offered on all the+
