Job Subsidies Also Provide Help to Private Sector

[TomCADem]

Source: NY Times

CHICAGO — States are putting hundreds of thousands of people directly into jobs through programs reminiscent of the more ambitious work projects of the Great Depression.

But the new efforts have a twist: While the wages are being paid by the government, most of the participants are working for private companies.

The opportunity to simultaneously benefit struggling workers and small businesses has helped these job subsidies gain support from liberals and conservatives. Congress is now considering whether to extend the subsidy, which would expire in September, for an additional year. A House vote is expected on Thursday or Friday.

Despite questions about whether the programs displace existing workers, many economists have argued that direct job creation programs are a more cost-effective way to put some of the nation’s 14.6 million unemployed back to work than indirect alternatives like tax credits and construction projects.


Read more: http://www.nytimes.com/2010/07/29/business/economy/29workers.html?_r=1&hp

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Wow, a news article that actually praises the stimulus, rather than calling for re-hashing arguments for extending the Bush tax cuts.

[fasttense]

1. A modified FDR style jobs program should have been implemented

when President Obama first took office.

I wrote to them and explained how they could be giving jobs to the thousands of unemployed while still supporting private industry. It's really quite simple.

You offer anyone who is unemployed a job making $10 an hour and full benefits by hiring them through one of thousands of OPM (Federal Office of Personnel Management) programs. Obama could use the reconciliation method to pass this legislation because the programs are already created, they just lack sufficient funding to implement on a nationwide level.

Using the local unemployment offices, OPM could fund $5.00 an hour and the employer could pay $5.00 an hour to the worker. OPM could give them benefits and they could be placed in small business, government offices, nonprofit organizations and even be used to staff up the unemployment offices themselves.

They could make it so the unemployed person does the job hunting. The unemployed person gets a certification from the unemployment office saying they are eligible for the program and the unemployed person would use that certificate to find an employer who wants to hire them at $5.00 an hour (less than minimum wage). The person goes back to the unemployment office, identifies who they wish to work for, and the office determines if the employer is eligible and the job is filled.

This will have several immediate benefits. 1. It will help the 99ers (over 2.5 million people) and give them current job skills, 2. it will help anyone who is unemployed by allowing them to keep current on their job skills, 3. it gives small businesses and state and local governments a break in cost of labor, 4. it will put upward pressure on currently declining wages, 5. it would increase tax revenue, 6. it would spur demand and 7. it will reduce the cost of unemployment benefits by putting those who are eligible for unemployment to work. It's a win-win situation for everyone.

Yet not a single member of this administration would even consider doing this.