Learn about the Job Guarantee

Question 1 - What is the Job Guarantee?

Under the Job Guarantee policy, the government continuously absorbs workers displaced. from private sector employment. The Job Guarantee employees would be paid the minimum wage, which defines a wage floor for the economy. Government employment and spending automatically increases (decreases) as jobs are lost (gained) in the private sector. The approach generates full employment and price stability. The Job Guarantee wage provides a floor that prevents serious deflation from occurring and defines the private sector wage structure.


W.F. Mitchell (1998). “The Buffer Stock Employment Model - Full Employment without a NAIRU”, Journal of Economic Issues, 32(2), pp.547-55.