A few years ago my friend Sam Novey ran social media for a relatively unknown candidate during the race for Ted Kennedy's Senate seat. The candidate billed himself as a "social entrepreneur" looking for grassroots solutions to our major problems. At the time, I had just founded an Internet start-up focused on local civic engagement, and his message appealed to me.
I thought he was a little idealistic, but I joined his mailing list and I stayed on it even after he lost the election. Today I'm glad I did.
Alan Khazei's proposal on jobs is remarkable for its simplicity. We give out 99 weeks of unemployment insurance now. What if we turned that into a voucher that employers could redeem for 99 weeks of wages?
To put it in perspective, 99 weeks is nearly 2 years. Unemployment insurance covers a fraction of former wages, so if you were making $40,000 a year and were laid off, you might receive $10,000 in unemployment (it varies state by state). Under this plan, the unemployed would have the option to give money they had not yet collected to an employer to put towards wages. In the example above that could allow a new company to hire you for your former salary but only pay $30,000.
As a caveat: my company has never employed more than four people at a time, and our employees have all been college educated. That said, there are a few reasons I think this is a good idea.
1) There is a powerful psychological benefit to working. Being unemployed sucks. I've had enough friends and family crushed by unemployment in this recession to see that firsthand. Unemployment costs much more than lost wages, it is worse than it has been since we started measuring it more than 60 years ago, and a larger portion of the unemployed have been unemployed for an extended period of time (in July the average length of unemployment was 40.4 weeks). The more tools we can give people to reenter the workforce, the better.
2) As an employer, it feels a lot better to hire someone away from another job than it does to hire someone who is unemployed. There is a certain feeling of confidence that comes with knowing that the person chose to work with you over other options. This is just one of the reasons it can be so much harder to find a job when you have been unemployed for a long period of time.
3) Being able to hire someone for free or at a discount makes it easier to take a shot creating or filling a position you might not usually hire for. More than that, it gives you an incentive to look at candidates who are out of work. Some will argue that these jobs will be lost when the insurance runs out, but they forget that when you look at the cost of recruiting, interviewing, and training, employers have a strong incentive to retain talent. Additionally, any voucher system could easily have a provision saying it could only be used for new jobs, or jobs where a person quit or was fired with cause.
I'll be the first to admit that, as with any new idea, there are plenty of potential problems with this, and there are plenty of debates to be had about specific aspects of the proposal. But, what I like most about this idea is that it isn't really left or right, it's just practical. My hope is that we've got a Congress that can get itself together long enough to debate some point on its actual merits, deal with potential pitfalls, and push forward a bill that will actually create jobs.
United Nations Visit Diverts Obama From Jobs Message — Again
Obama jobs plan to direct billions in Pa. spending
Jobs, Obama among topics at steak fry
Rep. Ted Deutch Pushing Obama's Jobs Bill
Online commentary: Rural Michigan would benefit from Obama's jobs plan
Obama jobs and deficit proposal targets contractor executive pay
...I think if I want to be anonymous, I should have a right to anonymity, in order to protect ourselves from retribution when expressing unpopular ideas to any government. If I am a socialist, and I promote socialist ideas, I don't want a progressively capitalist government to know everything about my life. I want to be politically active, and continue to protect my children.
The more I read / listen to this guy, the more dangerous he sounds. The ideas he is promoting/proposing could be used in terrible ways to control the general public...
Before we try further swindles, how about trying some of the basics: enforce domestic content laws already on the books, reciprocal tariffs, no tax breaks for off-shoring jobs, no using foreign contractors to avoid overtime laws.
How about if we just focus government back on the Preamble, back on government with the People's interests in mind, before we up the giveaways to the corporations any more.
The Government could easily provide this welfare to businesses without dipping into someone's unemployment insurance.
How about repairing the trade imbalance, bring manufacturing back, and supporting smaller businesses.
I'm sure most of America would welcome the days when you could go to a main street, and shop. There was stuff to buy, made by local artists and crafts people. Restaurants, Sandwich Shops, Bake shops, gift shops, handmade furniture, clothes, baby toys and bath products, local grocery stores, butcher shops with specialty cuts from local farms.
That's the America I want to live in again.
The point about the economy is not to have people idle,twiddling their thumbs, thinking about how to cause mayhem for lack of nothing better to do. People should always have a purpose. If you can't find work, no problem! The government will keep you busy so you don't resort to drug dealing and other destructive activities.Teachers could have lots of on-hand help, subway terminals and bathrooms could be cleaner,Washington Lawns neatly clipped, Let the private sector continue on but vastly improve the functionality and quality of the government sector by allowing people to work in sectors they choose. The government could even provide workers to private industry at a premium. The only thing would be to ringfence the safety net money that was generated to support the poor, infirmed etc so Washington can't spend it on another one of their misguided war adventures that nobody wants.
The major downfall of constructing such a policy the way advocated is it makes the employment crisis for new graduates even greater. Having never been employed they have no money to promise a prospective employers. Although obama's plan isn't much better for them.
The tax system is also better constructed to audit and catch potential fraud on laying off workers one place to get the credits hiring in another.
Obama grants rewards for hiring the long term unemployed, creates youth opportunities, extra incentive for hiring veterans as well as an across the board payroll tax holliday for new hires. It's a better plan IMHO. Harder to explain but better.
===
Why would employers pay even $30 for employees THEY DO NOT NEED?
I currently work the job of two, while my husband works the job of three. We would LOVE some damn help.
Germany's individual tax burden is nearly twice that of the US, yet citizens there, as well as a wide political spectrum of leaders, seem to understand the need to pay for their generous services and benefits, rather than cut these services to austere levels by cutting taxes.
Germany has deemed that spending some of its resources to keep workers on the job works to help their entire economy.
Tax % Tax Base (EUR)
0 Up to 8,004
14% 8,005-52,881
42% 52,882-250,730
45% 250,731 and over
Another idea:
How about, after someone has collected Unemployment for 3 months, they go work in a CCC-type program? It might be infrastructure, might be helping the elderly do their tax returns, helping to run a daycare center ; wherever the benefits recipient's expertise is.
Are you saying they only get the max UE compensation (less than 20K/yr) even if the work they do for this CCC program pays much higher in the private sector?
Why not just put that money into creating jobs by funding the infrastructure spending? Infrastructure jobs...construction...should pay $20-60 per hour depending on the skill level..much higher than any UE compensation covers.
Why not just help the unemployed get degrees in social work and fully fund those programs.
well, partly because the GOP would never allow it. they'd never allow the CCC-type program either. They Don't Want people to go back to work. they want Obama to fail.
"Why not just put that money into creating jobs by funding the infrastrucÂture spending? InfrastrucÂture jobs...conÂstruction.Â..should pay $20-60 per hour depending on the skill level..mucÂh higher than any UE compensatiÂon covers."
As long as they're being paid, why shouldn't they make a contribution? Like Workfare recipients have been asked to do. If you pay at their benefit rate, more people can work.
And who said I was against UE recipients getting degrees? Lots of folks with degrees don't have work, and are not being productive. Why NOT have unemployed accountants, for instance, help the elderly with their tax returns, in return for their benefits? Or out-of-work teachers collecting UE to help with a training program of some kind?
And LOTS of stuff needs doing. By all means, put skilled workers back to work. But why NOT ask those folks getting benefits to also do something in return for the benefits, maybe even part-time, so they could continue to look for work?
Demand drives hiring. We own a small business, we would not hire someone just because we could get a voucher or a tax cut. You hire when demand for your goods and services requires.
You can't create a job that demand doesn't exist for. We need to rebuild our infrastructure...badly. 5M people or more were put out of work with the housing/construction market crash. Put those 5M back to work on our infrastructure and you have 5M people paying taxes, shopping at stores, staying in their homes, buying cars...etc.
Infrastructure spending also spurs private development..creating more jobs. The ROI of infrastructure spending is multi-fold.
But, you are correct - demand is what creates jobs.