One Economic Reform Millenials Should Try To Comprehend The Probable Effect Of

Jesse A. Myerson wrote an article in Rolling Stone entitled “Five Economic Reforms Millenials Should Be Fighting For“. The first of these reforms is “Guaranteed Work for Everybody”.  (This is immediately qualified to “everyone who wants to contribute productively to society”, probably since the original might be interpreted as meaning forced labor.)

Anyway, Myerson claims that “A job guarantee that paid a living wage would anchor prices”.  How? As I see it, if all the unemployed (or even a significant number of them) were suddenly being paid money for work, it would result in an increase in the price level–that is, inflation.

 
Now, this isn’t necessarily as bad as it sounds, since the problem in most recessions is deflation, and pursuing an inflationary policy to combat unemployment is an old Keynesian trick.  (Although in this case, unemployment would presumably be almost 0, so there would be no need to combat it…) 
 
Also, since it’s a living wage, if prices go up, the government would have to increase the wage to keep up with prices, which could cause prices to go up again, and possibly lead to a never-ending inflationary cycle.  But that might just be my pessimism talking.  Nevertheless, I don’t get how this idea, whatever other merits it may have, is supposed to “anchor prices”.

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