In our capitalist politico-economic system, the prime directive enshrined in law is to maximize profit for the shareholders, and NOT to optimize the benefits for all stakeholders, inclusive of workers, customers, communities and our planet. These entities are treated as externalities so as to privatize the gains and eco-socialize the losses.
In this system, workers are seen as a cost (a disutility) and if the capitalists can automate what workers do, and thus bring the cost of “labour” to zero, they would do so readily so as to maximize profit gains. Also having a bumper stock of unemployed people keeps the price of labour low (according to market supply-demand principles), hence the manufacturing of poverty and economic refugees, which can be stopped in a heartbeat if there is the local and global political will to end “wars of life-destabilizations” within and without.
MMT (Modern Monetary Theory) accurately describes the credit creation process. It shows us that with a federal job guarantee option, where the government is seen as the employer of last resort, is able to envision labour / work as a benefit (not a disutility), unlike the private sector that treats them as a cost! This then liberates the government to create a bumper stock of employed people that ensures that everyone who wants to work will be given on-the-job training, skills and benefits that the public sector can absorb in the bad times (recession) and provide for the private sector in the good times. Thus the system can ensure full employment and once there are resources and people available, the government can publicly invest, by budget deficit financing, in the people and their skills and by extension their communities.
The government has that ability to rise to the occasions and create liquidity via the central bank through the treasury, if it so chooses, to become the creditor of first resort, via public spending in the economy, when occasions of unmet life-needs arise. To do otherwise, would be fiscally irresponsible and an abdication of their fiduciary trust! Work that deals with cleaning up of the environment, reforestation, looking after the elderly and sick are jobs that are usually undervalued, but idle labour and resources can be utilized more fully and coherently via publicly investing to fill the life-needs gaps that are currently unmet.
Also, by setting the minimum living wage based on the federal job guarantee programme, this becomes the standard by which all consumer prices are set in the public and private sector. There is no crowding out of the private sector here, as this program provides fertile and healthy grounds for the public and private sector to partner, as public investment in health, education, security and basic infrastructure creates the just and equitable tide that lifts all boats, from each according to their life-capabilities to each according to their life-needs.
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