Re: Full Employment is what?

[Paul Davidson <pdavidson@xxxxxxx>]

At 07:05 AM 5/29/01 +1000,  Bill Mitchell wrote:


> Warren's ELR is similar to my Job Guarantee model. In both, the JG wage
> only has to be slightly lower than the
> private sector wage not significantly lower to gain the inflation control.


What do you mean by not "significantly lower"?  Surely the use of
significance is not using the statistical concept here?  If it is
statistically not significantly lower in the statistical sense then the
sample mean for ELR workers might equal or even by "not significantly
lower"  than the private market mean price for workers.  But the mean price
for workers is well above  (significantly in the statistical sense) the
legal minimum wage in the US.  So that would suggest the ELR wage was well
above the minimumum wage -- which surely is more relevant for the marginal
worker.

but then you must mean not significantly lower in the arithmetic
sense.  But what is "not significantly lower"?  2 per cent below the
minimum wage, 5% , 25%.  "In this sense not significantly lower is like
"beauty" -- in the eye of the beholder.

Paul



> It is loose full employment because the
> level of demand associated with JG Full N is < level of demand associated
> with a fully employed private economy.
> The gain it makes has to be relative to the NAIRU mentality that controls
> inflation with unemployment.
>
> The question also has to be asked: can the private sector ever provide
> enough jobs without inflation to fully account
> for all the labour force? my answer is no and therefore the JG is the only
> way to achieve both goals.
>
> best wishes
> bill
>
>
>
>
> William F. Mitchell
> Professor of Economics and Head of Department
> Director, Centre of Full Employment and Equity
> University of Newcastle
> New South Wales, Australia
> E-mail: ecwfm@xxxxxxxxxxxxxxxxxxxxxxx
> Phone: +61-2-4921 5065
> Fax:   +61-2-4921 6919
> Mobile: 0419 422 410
>
> WWW Home Page: http://e1.newcastle.edu.au/economics/bill/billeco.html

Paul Davidson
Holly  Chair of Excellence in Political Economy
Editor, Journal of Post Keynesian Economics
Economics Department - 523 SMC
University of Tennessee
Knoxville, Tennessee 37996-0550
phone # (865) 974-4221
fax # (865) 974-1686
home phone and fax # (865) 692-0802
http://econ.bus.utk.edu/Davidson.html