Thursday, 12 January 2012

UK graduate, Cait Reilly, objects to her new JG job.

Subsidised temporary employment is not a bad way of dealing with unemployment. The advocates of Modern Monetary Theory tend to call this form of employment “Job Guarantee” (JG).

The story in brief is thus. A graduate already doing volunteer work for a museum was told she’d have to work instead in a shop - stacking shelves and sweeping floors. (h/t to Mark Wadsworth)

The graduate didn’t like the shelf stacking assignment, so she’s suing the government department that allocated her to it.

What the graduate has going for her (seems to me) is that she was ALREADY doing something useful. So why the need to re-allocate her?

On the other hand, there is much to be said for private sector JG: the empirical evidence is that those who do private sector JG have more successful subsequent employment histories than those doing public sector JG. See here.

Plus there is a good argument for not allowing JG employees to stay with a given employer for too long: it tempts employers into abusing the system - that is employing people who are in reality normal productive employees on a subsidised basis. (For more on this, see under heading “11. Fraud and other rules governing TES” here.)

The graduate complained she was being forced to do “futile, unpaid labour”. Invalid argument: she was doing unpaid labour anyway!!!!! As to whether the shop work was “futile”, she may have thought that as a graduate, stacking shelves was beneath her dignity, but other than that, the work was certainly not futile: she was doing something that paying customers actually want – helping run a shop that supplies goods that ordinary people want. Moreover, the shop concerned (Poundland) caters for the less well off – not millionaires.

So my judgement is thus. If Ms Reilly has only been in the museum job for two or three weeks, have that job registered as an official JG job, and let her stay there for two or three months. On the other hand if she’s already been in the museum job for two or three months, she’ll have gained some valuable “museum experience”, and it’s time for to move on and see something of the less effete, brutal world of commerce.


Stop press: Cait Reilly puts her side of the storey.


  1. "she was doing something that paying customers actually want – helping run a shop that supplies goods that ordinary people want."

    By working for nothing in it.

    This is precisely my concern with subsidising private sector operations without going the whole hog and subsidising all jobs.

    What you have here is a commercial organisation that is operating its cost base lower than it otherwise would be allowed to.

    There is a local operation here called Cut Price Charlie's put out of business by Poundland turning up. Is that due to economies of scale or government state aid?

  2. Neil,

    If private sector DOES significantly reduce private employers “cost base”, then obviously I’m talking thru my rear end. However, JG people TEND to be relatively unproductive. So to the extent that the low price paid by private sector employers for JG labour reflects that unproductiveness, the cost of JG labour per person hour will be little different to the cost per person hour for regular employees.

    Thus private sector JG won’t reduce the “cost base” of such employers (depending on exactly what you mean by “cost base”).

    At least that’s the theory. Obviously the real world is far more messy than the above theory: e.g. Cait may be hopeless at shelf stacking or she may be brilliant.

    The extent to which the price that private employers pay for JG labour ACCURATELY reflects the latter’s productiveness could be enhanced by having employers bid any amount they want for such labour (£0/hr up to say £5/hr). The “bidding” idea occurred to me long ago, but Tom Hickey recently suggested it on Mike Norman’s blog.

  3. Oops . . . when I referred to the cost of labour per hour above, I should have said “unit labour cost”: i.e. the cost of labour per unit of output.

  4. We have a public JG program and it's usually known as "workfare".

    When it was introduced in Pennsylvania, a life time welfare recipient (and relative)complained to me, and I quote:

    "They want me to work for my check"!

    I replied, "I do Or else I lose everything I own."

    But the story has a happy ending, he went to a doctor on public expense and was excused.

  5. I thought the point of JG was that people got paid.

    Using the unemployed as forced free labour for employers seems, well, more like slavery.

  6. Zojo, Cait Reilly WAS being paid: £53 a week according to the link under the "Stop press" heading above.


Post a comment.