Reconciling the policy goals of full employment and ecological sustainability

Abstract

Ecological economists believe that the growth in real Gross Domestic Product (GDP) is ecologically unsustainable. They have subsequently called for a transitional shift to a steady-state economy. The dilemma that ecological economists face in trying to promote ecological sustainability is its potential employment implications. This paper outlines some policy initiatives to reconcile the conflict between the sustainability and full employment objectives. They include: policies aimed specifically at severing the GDP-employment link; judicious combination of supply-side and demand-side solutions; ecological tax reform – a revenue-neutral tax package involving a reduction in taxes on such "goods" as labour, income, wages and profits and an increase in taxes and charges on such "bads" as resource depletion and pollution; a job guarantee to absorb all remaining unemployed workers; and in view of the constraints that a steady-state economy imposes on demand-side solutions, such as the Job Guarantee, a Basic Income to remunerate non-paid household and volunteer work. Set at something less than a living wage, the Basic Income encourages workers to reduce their hours of employment or exit the labour force altogether.