How the government can help with unemployment and possibly fix the economy.

So something came up and I didn’t see a movie last night.  I don’t really have anything on deck right now, and thought I might share some thoughts I have had recently regarding our current economic situation.

I normally don’t get political, but like most Americans have been worried about what we are doing with our economy and do believe that if you don’t do what you can to fix a situation than you deserve the results.  I am also not any kind of expert in economics or politics, but I work alone, and therefore have a lot of time to think.  I have come up with a plan that I believe has the duel benefit of helping people in our struggling economy and helping companies as well, thus resulting in an idea that should appeal to both sides of the political water, if for different reasons. (Ben Franklin image courtesy of the Political T Shirt category).

The problem we have had with the stimulus money is that (obviously) it went to people who don’t actually stimulate anything.  Banks are not exactly lining up on my site to buy t-shirts, and as they keep sending jobs overseas it really doesn’t do much at all.  Sure, some decent construction jobs were handed out, but the problem is those are all temporary situations.  Eventually the bridge will get finished and all those guys will be out of work again.

What we need is stimulus into jobs where Americans actually manufacture stuff and then that stuff gets sold to other Americans.  Sure, we tried that with cars by bailing out some incompetent care manufacturers, but no one I know is looking to buy a new car.  The jobs we need are the ones that make all the little widgets that are current being mass produced overseas, mostly in China.  Electronics, consumer goods, novelty items; you name it, our country used to make it and the companies making them made a profit.  Why don’t we still do these sorts of things?  Well, the obvious answers are corporate greed in an increasingly competitive market.  However, the underlying reason is cost of labor.  Americans just cost too much to hire and pay.  As a country our workforce has priced themselves out of the job market and are therefore now unemployed.

So what is the answer?  Glad you asked.  What I would do if I were president and Congress (or had some kind of mind control device) is I would create a program called the General Labor Pool.  Similar in theory to the labor programs started by President Roosevelt during the other Depression, the difference would be that anyone on unemployment insurance would actually be enrolled in this program and be required to report for work for however many hours a week was deemed appropriate.  Not a full 40, as this would allow them time to look for work.  But instead of sweeping up public buildings and the like, the people in the General Labor Pool would be hired out to private companies at significant labor discounts.

You see, instead of paying the unemployment insurance to the individual people, the money would be sent to any company hiring them to offset the cost of their wages.  This idea has many benefits.

1.  The companies participating would get a ready pool of employees at rates that would make it economically feasible to manufacture (or phone support, etc) here in the US rather than overseas.  Furthermore, as labor is usually the number one cost to most companies this would give them the ability and incentive to actually grow and hire even more (previously unemployed) people.

2.  The formally unemployed people would actually be making more money than they would be while unemployed, allowing them to buy things like shoes and clothes, thus supporting floundering retail business in local communities, and thus allowing those retailers to hire more people and place orders for more goods, hopefully manufactured by other recently rehired Americans.

3.  People would be working, and not sitting around getting depressed and watching TV.

4.  Since we are paying unemployment insurance anyway, it really doesn’t cost us anything.  It’s more like a job placement fee.

Once the unemployment runs out there might have to be some kind of other incentive to keep people employed.  However, if the company let go of the people every three months and hired more people from the same company, would that be so bad?  Working for three months is not a bad deal, and odds are there will be another company looking to hire that same person through the same program.

Look, I’m probably some kind of idiot and there are probably 100 reasons why this plan won’t work, but to be honest I don’t really see any of them.  It all seems pretty obvious to me.  It helps the working person, so Democrats should be happy.  It helps companies, so Republicans should be happy.  If you can think of a reason why it wouldn’t work feel free to post a reply here.  If you can think of a reason it would work do the same, and maybe write your Congressman.

Thanks for reading my plan.  I promise tomorrow I will be back on the humorous movie reviews, with a full frontal charge at the newest Twilight movie.  Follow me on Twitter @NerdKungFu.  Talk to you soon.




  • Tyler November 23, 2011 at 6:18 pm

    I think this idea is quite interesting. I follow politics very closely and most politicians have zero interesting ideas. I think the problem with it is that companies would take advantage of that system. There is a minimum wage for a reason. If employers start thinking they can pay people below the minimum wage then will do so in droves. The minimum wage is supposed to be at least close to a livable wage (though not very close in actuality). If Wal-Mart could pay people 1 dollar an hour, then trust me they will.

    First time reader of your blog. Seems pretty cool so far.

  • Dave November 24, 2011 at 1:12 am

    That’s absolutely true. However, if someone is getting paid $12 per hour and $6 of it is coming from what would normally be paid to him or her from unemployment insurance, than the worker is getting their wage and the company is effectively paying $6. That is the win part for the companies, and the reason why they should support it as well. The thing that appeals to me about this idea is there seems to be something in it for both the workers and the companies.

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