Third, public policy-makers should be thinking about job guarantee schemes that would complement the normal labor market. Guaranteeing paid activity in this way would kick in when traditional jobs are lost; it would keep people active and able to use their skills. If governments acted as an ‘employer of last resort’ this would avert scarring effects and could actively promote up-skilling if, as it should be, requalification/retraining were a core element of the guaranteed activity.
As such a scheme would in effect decouple the payment for an activity from its content it creates an additional public policy tool to incentivize socially beneficial activities. A job guarantee could, for instance, be effectively used to upgrade the health and care sectors, where on current demographic trends more human labor is required in the future. It could also be used to fund sports and other cultural activities locally and thus strengthen social cohesion in communities.
Such a job guarantee system would be managed through a variety of different intermediaries and governance institutions. It is not about introducing a planned economy. The idea is premised on the assumption that even if traditional jobs disappear or there are times of transitional unemployment we as human beings will not run out of ideas as to what kind of socially beneficial activity we could actively engage in.
The fourth cornerstone then addresses how to finance such a scheme. It is surely worthwhile to rethink taxation, including how the tax base can be broadened, but in the end this might be either insufficient, distortionary or both. If we really end up in a world in which most of the work is done by robots the fundamental question is: who owns the robots?
