Inclusive labour market: A role for a job guarantee scheme
Saskia Klosse & Joan Muysken
#2016-011
In the European labour market there is a clear scope for improvement in
activity rates. Moreover, sustainable employment is impeded by the
pervasiveness of temporary work, self-employment and part-time work. As
a consequence there is a clear role for active inclusion policies,
complemented by stimulating macroeconomic policies. However, the
implementation of appropriate policies, initiated in 2008, never really
took off and stagnated due to the austerity measures enforced after the
financial crisis. For that reason we propose to experiment with Job
Guarantee (JG) projects. On the one hand, JG projects should provide a
macroeconomic stimulus to the economy by employing everybody who is out
of work in JG jobs at the minimum wage. On the other hand, JG projects
could stop the downward trend in job quality and foster inclusive labour
markets by providing quality jobs and sustainable employment. We propose
to finance the JG Scheme by redirecting social security (administration)
funds, by including JG elements in the European Investment Plan (also
known as the Juncker Plan) and to spend part of the € 60 billion which
the ECB is injecting each month in the Euro Area on job guarantee
projects.
Keywords: inclusive labour market policies, job guarantee, sustainable employment
JEL Classification: J48, E6, J21, J68