Economics, U.S. Economy

Here are 14 ways to get Americans back to work

Image Credit: shutterstock

Image Credit: shutterstock

Steven Rattner recently wrote an article in the New York Times on how the federal government is killing the economy. He says:

According to estimates by the Congressional Budget Office, the pullback in spending by Washington — it declined in 2013 for an extraordinary second year in a row — together with higher taxes will cause the economy to grow by 1.5 percentage points less this year than it would have if the deficit had remained constant.

Using economists’ rough metrics, that’s the equivalent of 1.5 million fewer jobs.

In response, here are 14 recommendations from AEI’s Michael Strain for getting unemployed Americans back to work.

1.) Expand, support, and publicize work-sharing unemployment insurance programs.

2.) Lower the minimum wage for the long-term unemployed and for inexperienced workers, and couple it with an EITC-like payment.

3.) Offer UI-funded relocation subsidies for the long-term unemployed.

4.) Provide lump-sum UI payments, and bonus payments to workers who find jobs.

5.) Reform disability insurance so that it is no longer a permanent exit from the labor force.

6.) Offer assistance to long-term unemployed workers who want to start small businesses and can demonstrate a credible business plan.

7.) Increase high-skill immigration.

8.) Push states to adopt right-to-work laws.

9.) Delay Obamacare’s employment-reducing provisions at least until the labor market has significantly improved.

10.) Reduce the licensing and administrative barriers facing would-be entrepreneurs.

11.) Encourage domestic energy production.

12.) Consider temporarily eliminating or reducing the capital-gains tax on new businesses’ investment.

13.) Permanently reduce the payroll tax and pay for the reduction by, say, increasing Medicare and Social Security eligibility ages.

14.) Reduce occupational licensing requirements.

6 thoughts on “Here are 14 ways to get Americans back to work

  1. I’m open to persuasion, but some of these strike me as having very high costs per beneficiary (You don’t want to be in the same position as the Obama administration has where it passes “job creation” measures that end up costing $200,000 per job “created”). Others strike me a bit like paying employees extra if they come to work on time.

  2. Why reduce the payroll tax? Given the problem with entitlements (SS and Medicare) we should think about raising those taxes. Instead, reduce the lowest marginal income tax rate.

    In fact to increase employment in the “infrastructure” investments, create a payroll tax dedicated to an infrastructure bank. Make that tax revenue neutral by a corresponding reduction in that lowest marginal income tax rate. This would provide a steady stream of funding for infrastructure spending and force politicians to prioritize spending elsewhere.

    For SS and Medicare reform, if we are not willing to increase the payroll tax rate then look to raising the lowest age for taking payments and lower those payments for early starts. Keep the “regular” retirement age and payments the same but using actuarial tables increase the payments for those deferring the start of payments. Hopefully the shift will drive more to push back the benefit receiving date and put the fund in better shape.

  3. 6. is close to a good idea, but too restrictive. Include under-employed, displace-employed and remove the word “small” ( a business is the size its owners can / chose to make it ). The distribution mechanism is already in place. Just brush up the SBA. ( hint: if they have the same cliche set of criteria private investors have, they aren’t in the market to help a different set of folks )

    @DanFarfan

  4. Though I agree with most of these suggestions, I have a question: How will high skilled immigration get someone off unemployment? That is ludicrous. Importing labor, high skilled or not will have no immediate impact on unemployment. It will only exacerbate the problem. I have worked in technology and it all it has done was displace American born workers.

  5. It looks like a prudent and effective list of steps to improve Obama’s dismal state of joblessness. These recommendations have a striking resemblance to a list of the things Mitt Romney wanted to do. It’s a shame American voters weren’t interested in improvement.

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