29th Sep 2023

UN's radical 'job guarantee' idea creates stir in Europe

  • The job guarantee concept is a commitment by states to provide decent work for all those willing to engage in it (Photo: Unsplash)
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The paradox of the global labour market is that while there may be a shortage of decent jobs, there is no shortage of work, according to a report by by the United Nations special rapporteur on extreme poverty and human rights, Olivier De Schutter.

Its premise is clear: governments should do more than create the conditions for job growth, and ensure that working conditions are good.

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And so is the reason for that: not all wages are living wages, and not all employment is decent.

"A job guarantee would turn the tables, with workers able to fall back on government jobs that offer decent conditions and wages," De Schutter said last week, ahead of his proposal of guaranteed employment to the UN Human Rights Council on 30 June.

In essence, this is the job guarantee, a commitment by states to provide decent work for all those willing to engage in it. It can also be seen as a tool to ensure a 'just transition', to combat poverty, and even to bring people previously considered 'inactive' back into the market.

The idea is not new, but it has gained weight on policymakers' agendas in the wake of the coronavirus, the impact of subsequent crises on people's living conditions, and the new challenges posed by the green and digital transitions.

According to an analysis by the International Labour Organisation (ILO), some 117 million additional jobs will still be needed to meet the UN's Sustainable Development Goals (SDGs) in health, education, and care.

"Spurred largely by our obsession with economic growth at all costs, jobs in the care, education and health sectors are woefully undersupplied by the market despite being of immense value to society — no doubt because they don't churn out obscene profits," De Schutter stressed.

There are two reasons for this, according to the report. First, because markets are under-providing the public goods needed for a greener economy and a thriving care economy.

Second, because governments do not have sufficient public revenues to invest in the necessary jobs for the green transition.

This instrument aims to help not only workers affected by the decarbonisation of the economy, but also the most disadvantaged groups in the labour market — i.e. young people, women and the long-term unemployed.

The EU unemployment rate was 5.9 percent in May 2023, meaning that almost 13 million people were out of work. Youth unemployment was more than twice as high at almost 14 percent.

Women were hit harder than men, Eurostat reported, and almost half of the unemployed had been out of work for more than a year. The latter is at the heart of the French and Austrian projects, whereas the Youth Guarantee focuses, as its name suggests, on youth.

Is it too expensive?

One of the main counter-arguments of critics is that the employment guarantee is too expensive as an instrument.

De Schutter's report points out that a comparison of the high costs of unemployment with these investments would show that unemployment itself is much more expensive to the state.

In addition to the direct costs of unemployment, such as lost tax revenues or the cost of unemployment benefits, indirect costs, such as those related to health, especially mental health, should also be quantified.

At the same time, negative effects on families can be avoided. In Germany, for example, children of long-term unemployed fathers are 17 percent less likely to remain in tertiary education.

But these promises will only be kept if the guarantee is properly designed.

The UN expert's analysis argues that it should be voluntary, should not replace social protection systems, and should not become a form of unfair competition through the outsourcing of public services or the setting of below-market wages.

On the contrary, if better wages or conditions are set than in the rest of the economy, this may increase the bargaining power of the rest of the workforce.

Guaranteed employment "could also be combined with initiatives to better value care work performed within households or communities, often without remuneration or even formal recognition," the report notes.

With the right design, says De Schutter, the Job Guarantee "would play a hugely important role in wiping out unemployment, ending the race to the bottom on working conditions, and providing the income security and social inclusion millions urgently need to break free from poverty".


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