10 Ways the Gov’t Could Cut Unemployment in Half
Posted by Jill Gaynor on Wed, Sep 08, 2010 @ 03:59 PM
Last Friday, 24/7 Wall St. posted a thought-provoking list of 10 ways that they believe the US government could cut unemployment rates.
The propositions include ideas that edge on controversial, some that have never before been used in the US and a few that have, but not for decades. Below we have summarized each point.
What are your thoughts on the proposals?
1.Tax Credits. The first of 10 proposed solutions states that the government should provide tax credits to companies who bring on full-time employees. This incentive-based program hinges on the goal of creating more work and eliminating the problem of companies hiring part-time employees to cut back on benefit and severance payouts.
2. Funding Reduced Pay. Originating in Germany, this idea proposes that the government should provide a tax credit or stipend to companies who shorten work hours rather than layoff employees, thus creating more jobs.
3. Saving Small Businesses. Although companies with fewer than 500 employees generate nearly half of private, non-farm GDP, they have taken a great hit during the recession and have exhibited difficulty in receiving loans. This idea states that the government should bear some of the risk of small businesses so that they can bring on more employees.
4. Give people work, even if it is not permanent. Based on The Works Progress Administration created by FDR in the 1930s, this idea advises that the government should create jobs to buoy the economy. The success of this administration relies on the assumption that it will allow the government to avoid paying unemployment to those who would otherwise remain idle and also give these people job skills that will come in handy when the economy fully recovers.
5. Jobs Not Projects. This idea recommends another stimulus package from the White House, but this time focusing more on job creation rather than on tax incentives. It states that the government should give more money directly to the segments that are hurting the most in order to prevent the firing and furloughing of more workers.
6. China. This idea was generated around the thought that the great value of the Chinese Yuan directly affects the US’s ability to recover economically. It suggests one of two radical solutions: either the US Treasury Department make a direct threat to Beijing by labeling it a “currency manipulator” or that the US government require that “strategic imports from China be taxed.”
7. Underwriting Exports. The US was once a consumer-based economy with 65-75% of GDP coming from consumption. Because these stats no longer exist, this plan suggests that we make a switch and begin to rely more on exports. To have any success in doing so, 24/7 Wall St. says that we must first underwrite the cost of shipping. The suggestion: direct government payment of export shipping costs.
8. The Minimum Wage. This idea puts forth the plan that the government reimburse some part of the wage paid to Americans compensated at the minimum level. This plan would be successful under the belief that it would allow the lowest paid in the country to keep their jobs while also allowing modest-size businesses an opportunity to avoid layoffs at this level.
9. Construction Jobs. Construction workers have been hit hard, if not the hardest, during the recession. Most without work cannot afford to relocate to areas with greater needs, thus creating large pools of unemployed workers in certain areas. This plan advocates for the creation of projects on government-owned facilities in the areas that have been hit the hardest.
10. Immigration. The last idea revolves around the existing argument over whether or not it is fair that undocumented workers from abroad take American jobs. 24/7 Wall St. implies that rather than continue to argue and debate this sensitive subject, the government should step in and provide supplemental aid to states that have large illegal immigrant populations and create more public sector jobs for all.
To read the complete article via 24/7 Wall St., click here.