Green Jobs for Full Employment, a Stock Flow Consistent Analysis

Abstract

Unemployment is a fact in present economies. Even without a crisis, unemployment exists and costs a lot to society. Reasons for unemploy- ment are multiple and differ according to the theory at hand. Lack of effective demand, imperfect markets, and friction are examples of unemployment justifications. All sorts of policies based on these differ- ent theories have been implemented with varying results but none have proven effective in tackling unemployment. Full employment has never been achieved during the last 40 years. Often the problem is that these policies promote indirect jobs creation: public spending, wage subsidies, incentives, tax cuts, job training. Another issue is the change in the dimension of these policies; we now have microeconomic supply of labor policies instead of macroeconomic demand stimulation policies. Even if they meet some objectives, these policies do not provide an answer to unemployment. It is the duty of the state, as Lerner expressed it, to provide jobs when the market fails to do so (Lerner, 1944, 1951). By guaranteeing a job to all that are willing and able to work, the state would remove all invol- untary unemployment. Examples of such job guarantee schemes exist, even if they have never been developed on a full scale.1 Furthermore, in most economies the potential of energy saving via insulation and uses that are more efficient is important. In order to reach the Kyoto Protocol