Employers of last resort (ELR) areemployers in aneconomy to whom workers go for jobs when no other jobs are available; the term is by analogy with "lender of last resort". The phrase is used in two senses:
The sense of a job guarantee program is used and advocated by some schools ofPost-Keynesian economists, notably by authors ofModern Monetary Theory at theUniversity of Missouri-Kansas City, theLevy Economics Institute (both United States) and in theCentre of Full Employment and Equity (Australia), who advocate it as a solution forunemployment.
Colloquially, this may refer to work which is undesirable to most people or pays poorly – for instance, in the United States economy, manyfast-food and retail industry jobs represent last-resort employment for many workers.[1]
Ineconomics, the phrase often refers to employers which can hire workers when no other employers are hiring. Their presence may soften the negative impact on employment of downturns in thebusiness cycle. One example of such a program would be theCivilian Conservation Corps, a government agency intended to provide work to young, unemployed men.Military Keynesianism argues that themilitary can act as an employer of last resort, particularly when an underdeveloped geographic area experienceseconomic conscription.
A scheme was proposed by the Urban Coalition in the mid-1960s and received some support in the US Senate but was opposed byLyndon B. Johnson.[2]
More recently L. Randall Wray suggested a proposal for the US where workers would be subject to federal work rules, jobs would be tailored to individuals' existing skills, and the US Labor Department would assess proposals for employment and keep a central register; he estimated a total cost of 1–2% of the US's GDP.[3] Marshall Auerback suggested the government hire all unemployed workers, paying close to the minimum wage.[4]
Marshall Auerback mentioned a number of flaws which his proposal attempted to get around. Such a scheme might have an effect on wages for existing jobs. It would also potentially require a large and expensive state bureaucracy to administer.[4]
On April 3, 2002 Argentina signed into law the social programJefes y Jefas de Hogar Desempleados. It acts as an employer of last resort for heads of household who are unemployed and unable to find work.[5]
