In National Affairs this week, Michael Strain fills that hole with a comprehensive, conservative jobs agenda. It's a shame that Republican politicians are almost certain to reject most of Strain's ideas, because liberals would agree with many of them and they would do wonders to help the economy.
Strain puts forward nine policies intended to help long-term investment and three specific ones aimed to boost job growth in the near term. Here they are:
Long-Term Investment Policies
- Infrastructure Spending - With our infrastructure in need of improvement and the government able to borrow at low rates, there has never been a better time to fix our roads and bridge. Increased infrastructure spending should be offset with reductions in entitlement spending and tax expenditures.
- Monetary Policy - The Federal Reserve should ease monetary policy even further such as by lowering the unemployment rate threshold at which it would consider raising rates from 6.5% to 6.0% or even raising it inflation target to 2.5% while the economy recovers. In addition, the Fed should postpone the taper until the economy is even stronger.
- Licensing - The government should relax licensing requirements for many businesses. Much of this would have to be done at the state level where legislatures have erected barriers to entry in many industries that serve the interests of incumbent businesses without any policy goals.
- Social Security Disability Insurance (SSDI) - Over the past few decades, the percent of working-age adults receiving disability insurance has increased substantially. The program needs to be reformed so that those with true disabilities can receive payments, but does not allow able-bodied adults to take advantage of the system.
- High-Skilled Immigration - Graduate schools train immigrants in many STEM fields, but they are not allowed to work in this country. Many highly skilled immigrants found businesses as well and create jobs. Increasing high-skilled immigration would help the economy and increase employment opportunities.
- Unemployment Insurance - Unemployed workers should receive a small cash bonus on finding new employment, incentivizing them to accept a new job instead of foregoing work and continuing to collect jobless benefits.
- Capital Gains Tax - Congress should temporarily reduce or even eliminate the capital gains tax to spur on new investment.
- Right-To-Work States - States should prevent labor unions from excluding non-union employees so that unions have less power to demand higher wages and benefits. States that adopt such laws are called "right-to-work" states.
- Energy Production - Congress should continue to increase energy production by "allowing for more exploration on federal lands."
Short-Term Jobs Agenda
- Relocation Subsidies - The government should offer the long-term unemployed subsidies to move from areas of high unemployment to areas where jobs are more readily available. It should also offer the unemployed a document with information on labor market conditions in different areas around the country. The costs of the relocation subsidies could be offset if it was structured as a low-interest loan with repayment kicking in only when they have been reemployed.
- Wage Subsidies - Employers should be allowed to pay the long-term unemployed less than the minimum wage with the federal government making up the rest in wage subsidies. This would allow employers to take a chance on workers it otherwise would have passed over and still ensures that those workers can maintain a decent standard of living. The government should also lower the minimum wage for young workers.
- Work-Sharing - Work-sharing laws allow states to pay benefits to people who have lost a share of working hours instead of when they are fired. For instance, instead of firing 20% of its workforce, a firm could cut back everyone's hours by 20%. The state would then pay benefits to every worker so that they could recoup some of their lost wages. This allows the firm to cut the same amount of costs while retaining all its employees. While some states already have work-sharing laws, they are barely used. States should adopt and promote work-sharing laws on a much wider scale.