In his recent op-ed and the associated working paper, Thomas Palley warns against the Ricardian vice of ignoring political-economy considerations when laying out policy proposals, thus focusing too narrowly on strict economistic reasoning. In the big-picture debate on an employer of last resort (or job guarantee programme, JGP) scheme, this is a vice on which many self-identified ‘heterodox’ economists fall.
As Palley shows, when imagining a large-scale government programme to employ any willing person at a minimum wage, one should consider at least the following political constraints:
A potential negative impact on public sector workers and unions. Since people employed by […]
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