Outside View: 3 steps to help unemployment

By JEAN SMILINGCOYOTE, UPI Outside View Commentator  |  Sept. 30, 2011 at 6:02 AM
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CHICAGO, Sept. 30 (UPI) -- It is more urgent to end long-term unemployment in the United States than it is to increase the total number of jobs in America.

If unemployment were distributed equally, everyone in the workforce would be unemployed for only the percentage of each year corresponding to the official unemployment rate. We could tolerate this financially. Most importantly, the economy would be better off for all.

There are three ways the United States can do this.

First, irresistible incentives must be offered to employers to hire, first, unemployed people who've run out of unemployment compensation, those whose benefits are less than the minimum wage, employed people whose pay amounts to less than full-time pay at minimum wage, people whose income is too low to make ends meet (which nowadays includes any existing car and home Internet service as well as a home), and college graduates who haven't been allowed to do a job requiring their education.

The determination date for a person's status in one or more of these categories cannot be later than the day such legislation is signed. These incentives cannot be received until after the employee has at least a full year of full-time pay in his regular benefit year used to calculate unemployment compensation and has given his written approval.

People eligible for employment help with these incentives when the legislation is signed must be taken care of before those becoming eligible later.

Second, job-sharing groups must be formed which include unemployed people, so that all will rotate in and out of the jobs and all will be furloughed for an equal span of time.

Third, a new Works Progress Administration must be created. Harry Hopkins, creator of the original WPA, "believed that the work provided by the WPA should match the skills of the unemployed." This must be done now.

People know the variety of things they can do and don't want to earn a living by featherbedding. People whose skills are fully employed contribute the most to the economy. Involuntary underemployment (a negative output gap for an individual) increases the unjust concentration of wealth and income.


Creating New Jobs

If we're going to clear the market as fast as possible of unemployed Americans, the jobs we create must be ones which they can step into quickly. So far, all the job-creation efforts and stimulus-package programs have been top-down. We have to reduce unemployment with the unemployed people we've got today, not with some ideal cadre of workers who've been trained, some over a period of years, to do the jobs some administration decrees will be done.

Unemployment and underemployment itself are drags on the economy and on the tax revenues needed for more good programs. We have to ASK all unemployed and underemployed Americans what they should be doing for a good job right now.

We have to ASK Americans in general what work needs to be done, that isn't getting done now, and what products we need to make here, that we're not making here now. This is a type of "crowd-sourcing" that isn't being done.

Information on labor-force resources and consumer needs should be compiled and organized both geographically and economically. The Asset-Based Community Development Institute of Northwestern University in Evanston, Ill., should be brought in to help with this task.

In addition to incentives to employers for getting certified unemployed/underemployed people into existing jobs, we need a national "auction" to aggressively promote these same people for new jobs.

People who are already inventors and entrepreneurs have demonstrated ability to be the first people to realize that there's a demand or need for a particular product or service. They can do this before the government can create a "stimulus package" and before any employer puts out a help-wanted ad. Their leadership and creativity must be respected and rewarded in any job-creation bill.

A job-creation bill must respect the talents of people who are "self-taught" in some field. While these people know their limitations, and the need for teamwork, many employers think applicants can't possibly be competent, let alone superior, at anything, unless they have a lot of formal education in the field.

This bill must recognize the fact that a person might not have all the technical skills typically used in a job but, as part of a team including others who do have the skills, can make significant contributions right now in order to be employed.


Supporting demand

Every good job created requires a legitimate source of money to pay for the salary of the worker. Economists have a tradition of not recognizing "demand" unless it's backed up with the money to pay for the product or service. This has created a distorted view of what work needs to be done and what products need to be made.

When you have information on the real need for something without regard to the money the consumers need to pay for it, the next step is how to fund the demand.

This is the place where macroeconomic policy changes and new programs can be most needed and effective. Health-insurance reform, tax reform, financial-industry reform and support for "green" technology are examples of macroeconomic tools. The problem is that they don't earmark existing or new jobs for unemployed and underemployed people who want to step forward and tell the government agencies they need a good job now.


Misallocation of productive resources

There is a huge misconception now about the level of superfluity of American workers. Many observers, noting the number of jobs that seem to have permanently disappeared, think that many people will be "permanently" unemployed and that the economy obviously doesn't need as high a percentage of the workforce employed at any one time, as it did in the past.

I believe there is a misallocation of the factors of production of monumental proportions. Much of this is fueled by too much money going to one place and too little money to another.

Solving this misallocation can restore employment levels to what works for workers, as well as providing the goods and services that are needed more than supplied. This is a complex challenge and crowd-sourcing would help tremendously.

Ask Americans: What goods and services does this country have too much of? What goods and services does this country have too little of? What could be done to get us "about the right amounts" of these goods and services?

Reallocation of the factors of production can minimize unemployment, underemployment and poverty without requiring unsustainable economic growth for recovery.


(Jean SmilingCoyote, of Chicago, earned a bachelor of arts degress, cum laude, in geography as a scientific foundation for contributions in regional land-use zoning, community planning and home design. She has a Web site focusing on the tornado risk at http://EFTornadoSafeHome.com.)


(United Press International's "Outside View" commentaries are written by outside contributors who specialize in a variety of important issues. The views expressed do not necessarily reflect those of United Press International. In the interests of creating an open forum, original submissions are invited.)

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