The MMT Jobs Guarantee — guarantees failure.

Regular readers of this blog know that Modern Monetary Theory (MMT) and this blog’s Monetary Sovereignty (MS) mostly agree that:

1. The Federal government cannot run short of dollars. Even if the government collected zero taxes, it could continue spending, forever.
2. The federal government does not borrow dollars. It creates all its spending dollars, ad hoc, by paying creditors.

MS disagrees with MMT in other areas, specifically inflation and unemployment.

INFLATION

Modern Monetary Theory (MMT) argues that federal deficit spending can lead to inflation. In contrast, Monetary Sovereignty (MS) suggests that inflation is caused by shortages of essential goods and services. Additionally, MS posits that federal deficit spending can actually help alleviate inflation by enabling the production and purchase of these scarce goods and services.

Furthermore, attempts to prevent or cure inflation through federal spending reductions are recessionary; increased spending to address the scarcities can stimulate economic growth.

We have discussed this here: At long last, let’s put this inflation question to bed, here Stimulating economic growth without inflation and elsewhere.

UNEMPLOYMENT

MMT’s solution to unemployment is the “Jobs Guarantee,” which is just what it sounds like. The federal government would guarantee to find a minimum wage job for anyone who wants one.

MS has given many reasons why this is unworkable, unrealistic, and doomed to failure. Here, MMT’s divorce from reality: Jobs Guarantee and inflation fear, here, How the MMT “Jobs Guarantee” ignores humanity, and elsewhere.

In today’s Florida Sun Sentinel, an article demonstrates why the MMT Jobs Guarantee is ineffective — worse than ineffective — harmful, as it diverts attention from the real solutions.

Unemployment is harmful not just because people need jobs, but because they need money. The posts above explore real solutions. The following newspaper article illustrates the futility of a government program aimed at finding minimum wage jobs.

US factories struggling to fill 400,000 open jobs Attracting, retaining workers for blue-collar posts difficult By Farah Stockman The New York Times

President Donald Trump’s pledge to revive U.S. manufacturing is running into the stubborn obstacle of demographic reality.

The pool of blue-collar workers who are able and willing to perform tasks on a factory floor in the country is shrinking.

As baby boomers retire, few young people are lining up to take their place. About 400,000 manufacturing jobs are currently unfilled, according to the Bureau of Labor Statistics — a shortfall that will surely grow if companies are forced to rely less on manufacturing overseas and build more factories in the United States, experts say.

Difficulty attracting and retaining a quality workforce has been consistently cited as a “top primary challenge” by U.S. manufacturers since 2017, said Victoria Bloom, chief economist at the National Association of Manufacturers, which produces a quarterly survey. Only recently has the issue slipped down on the list of challenges, superseded by trade-related uncertainty and increased raw material costs due to tariffs, Bloom said.

But the scarcity of skilled blue-collar workers remains a long-term problem, according to Ron Hetrick, an economist with Lightcast, a company that provides labor data to universities and industry.

“We spent three generations telling everybody that if they didn’t go to college, they are a loser,” he said. “Now we are paying for it. We still need people to use their hands.”

The hiring challenges faced by U.S. factories are multifaceted.

Trump’s crackdown on immigration, which includes attempts to revoke deportation protections for migrants from troubled countries, may eliminate workers who could have filled those jobs.

Many Americans aren’t interested in factory jobs because they often do not pay enough to lure workers away from service jobs that may have flexible schedules or more comfortable working environments.

Attracting motivated young people to manufacturing careers is also a challenge when high school guidance counselors are still judged by how many students go on to college. But college graduates often do not have the right skills to be successful on a factory floor.

The country is flooded with college graduates who can’t find jobs that match their education, Hetrick said, and there are not enough skilled blue-collar workers to fill the positions that exist, let alone the jobs that will be created if more factories are built in the United States.

The Business Roundtable, a lobbying group whose members are CEOs of companies, has started an initiative in which executives collaborate on strategies to attract and train a new generation of workers in skilled trades. At an event last week in Washington, executives commiserated about how hard it was to find qualified people and swapped tips onstage for overcoming the gap.

“For every 20 job postings that we have, there is one qualified applicant right now,” said David Gitlin, chair and CEO of Carrier Global, which produces air conditioners and furnaces and services heating and cooling equipment.

A Monetarily Sovereign government should have no trouble addressing the problem. Use the farm subsidy approach. Pay factories to hire and train workers at higher wages and better conditions.

If the government funded higher wages and reduced work hours, interest in factory jobs would increase significantly.

Rodger Malcolm Mitchell

Monetary Sovereignty

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MONETARY SOVEREIGNTY