Pethokoukis, Economics, U.S. Economy

Here’s what the GOP should propose for ending America’s jobs crisis


What does a data-driven, center-right economic agenda for the problems of the 2010s not the 1980s or 1990s look like? You know, like solutions for an economy with 4 million long-term unemployed and whose share of employed adults has barely budged from the recession lows? Well, that sort of pro-work agenda probably looks a lot like the one AEI’s Mike Strain outlines in the new, must-read issue of National Affairs.

Among Strain’s policy ideas (and I paraphrase): 1) taking advantage of low interest rates to spend money on high-return infrastructure projects; 2) with inflation quiescent, continued monetary stimulus from the Federal Reserve; 3) rolling back oppressive occupation licensing requirements; 4) reforming the federal disability-benefit system; 5) admitting more high-skill immigrants; 6) giving unemployed workers a modest cash bonus when they secure employment; 7) paying jobless benefits monthly so workers who get a job at the beginning of a pay period could take in both unemployment compensation and a paycheck for that month; 8) temporarily reducing or eliminating the capital-gains tax on new business investment; 9) offer assistance to some long-term unemployed workers who want to start businesses; 10) relocation subsidies to the long-term unemployed to finance a good chunk of the costs of moving to a different part of the country with a better labor market; 11) significantly lowering the minimum wage for the long-term unemployed for at least the first six months after the date they begin work at their new job, and coupling that lower minimum with an expanded Earned Income Tax Credit or with wage subsidies exclusively available to the long-term unemployed; 12) greater work sharing where a company could cut hours by, say, 20% instead of 20% of workers and each worker could claim 20% of his unemployment benefit.

Strain sums up, beautifully:

Conservatism properly understood is deeply concerned about society’s vulnerable and about the health and functioning of society more broadly. … Our unemployment crisis is certainly an economic crisis. … But work is about much more than production, economic growth, and dollars and cents. Work harnesses our passions by channeling them to productive ends. Work gives us a sense of identity, a sense of purpose, and allows us to provide for those we love. Our unemployment crisis is therefore also a moral and spiritual crisis — a human crisis.

The solution to this crisis does not consist of massive short-term stimulus programs, industrial policy, cumbersome new bureaucracy, unnecessary regulation, and cronyist giveaways. Neither will the best solution be found in lower marginal income-tax rates, cuts in federal discretionary spending, and a balanced budget, whatever the benefits of such policies may be.

Instead, creative, genuinely conservative policies should be proposed and employed — policies that empower individuals, support their aspirations, increase their independence, help them to earn their own success, and promote virtue through work and personal responsibility.

18 thoughts on “Here’s what the GOP should propose for ending America’s jobs crisis

  1. The economy is stagnant because no new blood has entered Washington. The corrupt still control the money, Wall Street and political agendas. Policy has not evolved to support the middle class. 5 years of printing, higher taxes, inflation, stagnant wages and horrible job creation is what 7 trillion more in debt has accomplished. Do not forget the Fed that has followed its mandate of creating bubbles. I believe most fiat currencies have a life span of 45 years the dollar is about done. America needs a cleansing to invigorate a prosperous economy it will not come out of a corrupt GOP. Both sides of the aisle are riddled in corruption and self serving agendas.

  2. Here’s what the GOP should propose for ending America’s jobs crisis“…

    Wrong! Ever so wrong?

    First thing the GOP should (assuming they’re serious and that’s a very big assumption to make) get rid of all the legislation that makes business so costly…

  3. A restatement of “Strain’s policy ideas” as paraphrased above:
    === ===
    Let’s have government construct schemes and hand out money in ever more productive ways. Let’s modify and make more intricate those government rules which we now see are mucking up the works, but only so far as to promote the handing out of money, not so far as to eliminate those rules.
    === ===

    And, to sum up Strain’s summation:
    === ===
    Work is more than dollars and cents. Unemployment is a human crisis, so we must be genuine, spiritual, and have some feeling about this.

    The solution is not failed policy and massive bureaucracy [all of which we have tried again and again]. Neither is it lower taxes, less government spending, and a balanced budget, whatever the [domonstrated] benefits of such policies may be.

    [Rhetoric: List the bad policies we have tried, followed by the good policies the politicans won't do, and call them all bad.]

    Instead, I favor genuinely conservative policies which empower individuals, their aspirations and independence, where they earn their own success, with virtue through work and personal responsibility. I favor the good and denounce the bad.

    [It just so happens that these genuine policies all come from handing out more money through more detailed government programs. This a proven way to increase the independence and self-reliance of the American People. This is a practical program, because politicians love handing out money and will quickly implement these suggestions. More money is good. Who doesn't want more money?]
    === ===

  4. Kudos to Stain, there is a lot of good ideas there.

    I do not believe 5 percent of Americans decided in 2008 they no longer wanted to work, and have stayed on the sidelines since. This is lessening the wealth and prosperity of everybody.

    Lower taxes on working and business, and cut federal spending, especially on Defense, USDA, the VA and Homeland Security—they are black holes of money. Money goes in, but no product comes out.

    This will be tough for the GOP to do, but it should be done.

    There are nearly 12 million Americans collecting monthly disability checks. Almost 4 million of those are vets and half of returning vets now claim disability. SSDI has about 8 million. This needs a gimlet eye too.

    This will be tough on the Democrats, but they need to do it.

    In fact, when I think of the things the Donks and the ‘Phants need to do, I am sure they will not do it.

  5. Why is the GOP losing traction? Because they pursue government solutions to national problems. The Democrat party has that franchise.

    • Congrats- you just nailed it! If the “GOP” came out and said, “…we’ve seen what govt. “solutions” have done, we don’t want to be the ones to define YOUR solutions, YOU know better how to fix your situation than we do- What we want to do is facilitate your problem solving by getting out of the way…”. Now that would be a breath of fresh air and in the true spirit of Reagan conservatism…..Hence, it’ll never happen- Not until the likes of Boehner, et al are long gone!!

  6. This does not sound “conservative” from my perspective. It’s just more meddling and spending by government. Conservative solutions? Try having government get out of the way or, at least, require the unemployed to show up and do something each day to contribute to society. As a condition of receiving continued benefits, let them work 32 hours each week for local government after the first month of unemployment. Local government can put them to work making the area more beautiful, catching up on all kinds of low skill projects that either never go away or have not been finished. Over time, well-managed local governments will be able to reduce their budgets with the available labor from the unemployed, and the unemployed will feel better about themselves while having a stronger incentive to land a real job.

  7. i think the government should stop making this worse and trust free people to take care of themselves. People can do amazing things when they need to. This article is a ridiculous version of “my gov ideas are better than your gov ideas.”

  8. This piece is the kind of academic policy paper wonkery that one would expect from someone who has no real world experience.

    Item #5 is counter-productive because admitting additional immigrants will increase the number of job seekers in the U.S. #11 is irrelevant because the long-term unemployed are usually former professionals or other adults who are earning way more than minimum wage when they are working. There is no shortage of minimum wage jobs in the U.S. Numbers 3, 4, 6, 7, 8, 9, 10, and 12 may have some modest positive effect but they all strike me as very small potatoes and many of them are likely to stir up a hornet’s nest of opposition if the GOP tries to use its scarce political capital on these issues. The Democrats claim to already be doing Numbers 1 and 2 and the GOP would be left merely saying that they can better execute the Democrats’ playbook.

    I think the GOP needs to say that they will fix the U.S. economy by repealing ObamaCare and will reform the U.S. tax code to make it more pro-growth. I propose the GOP start by examining the pre-1986 Internal Revenue Code and determine whether the 1986 Federal Tax Act was really good public policy.

  9. dear sir
    I am ultra liberal
    and the first few points I thought, wow, not bad – we can agree on that.
    Some of the points, like 9 and 10 sound a little hokey to me, but as you so rightly point out, we are in really bad shape employment wise, so fine, lets try all sorts of things; we can’t get much worse then where we are now.
    Your last two points, I really don’t like
    You are willing to take 10/12, I think you can get a deal, if I am your representative liberal

  10. Quite overly complicated. A real solution would be a lower flat income, capital gains, and corporate tax; limiting unemployment benefits to the amount paid into date by the employee in unemployment insurance payments; and work private sector work requirement for welfare recipients.

  11. Since China joined the WTO in 2001, over 50,000 manufacturing jobs PER MONTH have been outsourced from the US, and each of those manufacturing jobs spawned between 3 and 6 additional jobs in services. Then, think of just one manufacturing facility with its management, marketing, office, accounting, engineering, technical and maintenance staff–also lost (not to mention the loss of tax revenue). Every economic success story of the 20th century was built on an industrial base, since manufacturing is one of the few human endeavors that actually produces wealth, and the vast hallowing out of America’s manufacturing is mostly to blame for our current economic, unemployment and financial woes.

  12. Brilliant. A long list of recommendations which completely ignore the migration of American industry and jobs offshore. That way Republicans can pretend to have a plan while completely ignoring the causes of our current economic spiral. I particularly like the idea of importing more “high skilled” immigrants to drive down the wages of existing high skilled Americans.

  13. Well maybe we don’t have to wait for ideas from the RINOs, it seems that the regime has it well in hand…

    Well the federales have already issued 147 new regulations and it is only Jan. 4th…

    The regime will need people to handle that…

    Now here’s something you don’t see everyday, the Fed NEEDS more Brown Shirts

    That’s right, the central bank needs their regiments of officers who are certified to carry a variety of weapons systems (depending on assignment) including semi-automatic pistols, assault rifles, submachine guns, shotguns, less-lethal weapons, pepper spray, batons and other standard police equipment. Officers also wear bullet resistant vests/body armor…

    One wonders if the Fed is looking towards the future knowing that it might need these people to help collect the IMF’s desired 10% wealth tax on everyone?

  14. Here is what will work
    1. Raise minimum wage to $12/hr and give American citizens $1000 tax credit on earned income.
    2. Immigration moratorium and mandatory E-verify by all employers until American citizens are fully employed and working class wages are rising.
    3. Equalize tax rates on wages and capital gains.
    4.Require proof of US citizenship to register and a photo ID to vote.

  15. More high skilled workers? Why?

    I applied to five software jobs for which I am highly qualified and very experienced and got zero replies.

    More high skilled immigrants with their low skilled family members.

    You probably want to eliminate copyright laws too. That way I do all the work and Microsoft gets all my software.

    Fred (pseudo)

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