Answer to Question #95937 in Macroeconomics for Ivan Swart

Question

What can the government do to address unemployment and poverty?

Answer 1

Poverty caused by unemployment also stimulates a number of negative social phenomena: increased crime, health problems, drug abuse, family breakdown, domestic violence, etc. The solution to the problem of unemployment can rightly be reckoned among the priority steps that contribute to overcoming the economic crisis.

The guaranteed employment program assumes that the government guarantees a job for all applicants. The establishment of a universal program with a fixed wage and a social package mobilizes the entire working-age population that is not involved in the economic process. This is not about some kind of coercion, but only about creating the necessary incentives and guarantees. The program can have a variety of configurations and sizes, from nationwide and comprehensive (up to the goal of full employment) to local or seasonal.