Monday, September 17, 2012

Edward Harrison discovers that Job Guarantee is a farce.

Edward Harrison (who runs the Credit Writedowns site) made an amazing observation while walking down a street recently. He was (to quote) “walking down the street with my wife and son when we noticed some serious (but unnecessary and annoying) street work that the local county had done. I went ballistic, complaining that, on the one hand, the local elementary school right across the street had been shut down because the building was ‘not up to code’, yet on the other hand, the county was doing these ridiculous and unnecessary street and sidewalk ‘improvements’. It immediately hit me that one could claim that these improvements were keeping people employed and aiding the economy. But, my viscerally negative reaction tells you that such a claim would be considered false by many taxpayers. It’s through these eyes that I view the debate on the job guarantee.”

Well done Edward Harrison. He has discovered by actual observation a point I’ve been making for 20 years, which is that what might be called “specially set up” make work schemes or “job creation schemes” like the WPA are inherently inefficient compared to jobs with regular employers (public or private).

In other words, given say an unemployed teacher, it’s much better to subsidise them into work in a school, then have them doing “unnecessary street and sidewalk improvements”, to quote Edward.

Unfortunately the above point seems to be beyond the comprehension of most of those discussing make work schemes / Job Guarantee / WPA. As to some of the more abstruse or complicated theory behind such schemes, there is not the faintest chance of the human race ever understanding it.


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