Saturday, October 10, 2009

Job Creation Program Options

It is pretty amazing how few ideas there are for job creation. Creating good jobs almost seems to complicated for our political class. This post is summary of the most prominent options both liberal and conservative

1. Tax credit for new hires. A subsidy from the government for each new person hired.

Would create some jobs. Might not be the best use of the money. Programs have other problems such as the marginal employee problem. Who should get the subsidy; every new person hired or only those who would not have been hired. How long should the job last to get the subsidy ?

2. Federal Government Direct Job Creation program

Would create jobs.

Does the government select the best projects to fund ? How efficient and effective.

3. Federal Infrastructure projects

Jobs. Needed investments are made.

Create less jobs than direct job creation. Same down side, does the government select the best projects to fund. Is infrastructure really the best investment ?

4. Aid to State and Local authorities

Again creates or support existing jobs and services.

5. Education and Job Training

Pro: Jobs for trainers and unemployment office workers.

Con: Only somewhat effective. Results are hard to measure. The folks doling out the money should provide some transparency and Cost / Benefit analysis

6. Subsidized loans or investments in small businesses.

Cost: 300 Billion

During the recession, major job loses have come from the small business sector. In addition small business have drastically lost access to credit. A small business loan program would restore access to credit.

Now here are some conservative proposals are:

6. Cut minimum wages.

Cheaper wages would allow employers to hire more workers.

7. Eliminate federal or state employer mandates such as healthcare

Cheaper benefits or reduced mandates would allow employers to hire more workers.

8. Do not pass the Employee Free Choice Act

A bill to make joining the union easier. Potential members would check off cards saying they request a union rather than have a secret ballot.

9. Evaluate training and return to work programs more systematically

Here is one good convervative idea, but quite difficult to implement. Conservatives propose to be much more rigorous evaluation of unemployment training and return to work programs. However, the idea is couched in the usual mean-spirited effort to cut programs that don't work rather than expand any program that does work or to try to improve the effectiveness of the whole system.


Forbe's Article on Conservative Job Creation. Here.

One of the nice things about writing a blog is that you can go back a correct or update your work. v3

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