Magazine

More Ideas for Creating Jobs


Government has thrown a lot at the unemployment problem already, from near-zero interest rates to a $787 billion fiscal stimulus, with limited success. Here are some of the other ideas in circulation

PAYROLL TAX CUT

Some economists estimate that temporarily cutting Social Security payroll taxes roughly in half would increase employment by 3 million to 4 million workers by making it cheaper for employers to add staff. But such a cut would worsen Social Security's long-run financing problems. And if sales are weak, employers still might not add jobs.

TAX CREDITS FOR NEW JOBS

These credits would be more targeted and efficient than an across-the-board payroll tax cut, because benefits would go only to employers who added to payrolls. It worked in the 1970s. Still, there's no guarantee that employers will hire if demand stays weak. And critics say many subsidies would go to employers who would have hired anyway.

INFRASTRUCTURE SPENDING

Brookings Institution economist Gary Burtless favors Depression-style spending on long-term public works projects, assuming the jobs market will need support for years. Such projects would create assets of enduring value like dams and schools. Downside: Relatively few jobs per dollar spent, plus it may take a long time for work to turn up.

JOB SHARING

Liberal economists favor sharing the pain by cutting workers' hours so it takes more employees to get the work done. This appeals to some people's sense of fairness. But it's costly for employers and the evidence from France and other European nations is that it doesn't increase employment.

REGULATORY ROLLBACK

Conservative economists say the free market will create jobs soon enough if trade were expanded and distortions such as costly regulation, too-high minimum wages, and extended unemployment benefits that discourage job-seeking were ended. Trouble is, with demand so soft, it's not clear such steps would increase employment.


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