Policies for Structural Unemployment
By Arnold Kling
Provide [income support for the unemployed] in return for jobs that do useful things for the community. That is, bridge the time while structural adjustments are underway with useful employment for those waiting for the structural changes to be completed.
Read the whole thing.
I would hate to see people equate “jobs that do useful things for the community” with government jobs. Yes, government workers do useful things. But private sector jobs are useful for the community, also. In fact, their usefulness to the community is measured and tested by the market process, which is not the case for government jobs.
If the government has $50,000 to spend creating jobs, it would be better to pay a subsidy of $10,000 per job for five private-sector jobs than to create a single $50,000 job.
Further thoughts on structural unemployment policy:
1. Count me as all in for cuts in the employer portion of the payroll tax.
2. Reduce public sector compensation, so that government can maintain services and employment without raising taxes. Keep government compensation subdued until you start to see a buildup of vacancies in government jobs.
3. Allow health insurance companies to market catastrophic health insurance across state lines. This will enable small businesses to increase employment more readily.
4. Abolish all Federal education programs and replace them with vouchers and prizes. This would encourage entrepreneurship in education.
5. Encourage states to create health care enterprise zones, where firms could offer health care without credential requirements. This would encourage entrepreneurship in health care.