Full employment and ecological sustainability: comparing the NAIRU, Basic Income, and Job Guarantee approaches

Abstract

One of the central themes of this joint conference – A Future that Works: Economics, Employment, and the Environment – is how to achieve full employment and ecological sustainability. This paper assesses three alternative macroeconomic policy approaches in terms of how well they resolve these two policy objectives. The three approaches assessed are: the NAIRU (non-accelerating inflation rate of unemployment) approach to macroeconomic policy setting; the Basic Income approach (guaranteed income for all); the Job Guarantee approach (employer of last resort). It is argued that: the NAIRU approach fails on both fronts; the Basic Income approach has the potential to improve distributional equity – though not as effectively as the Job Guarantee – but does not ensure full employment or ecological sustainability; the Job Guarantee is the best means of achieving full employment but, in order to bring about ecological sustainability, needs to be supplemented by the imposition of natural resource throughput constraints.