President Obama’s call for a jobs summit in December comes as unemployment remains high despite investments in green jobs from the 2009 stimulus package. In announcing the summit, the president declared, “We are open to any demonstrably good idea to supplement the steps we’ve already taken to put America back to work.” Mr. President, here are two recently proposed ideas for immediate job creation that deserve a hearing.
Dean Baker of the Center for Economic and Policy Research proposes that worker hours be cut–and pay maintained, using subsidies from the federal government–in order to create new job opportunities for idle workers, or at least to stem further job losses. He credits such a policy in Germany for having kept unemployment in check–it is 7.7 percent today, lower than the 8.4 percent level of 2007, before the economic downturn began. Government-facilitated job sharing would essentially spread existing work across a larger labor pool while the economy is functioning at subpar levels. By Baker’s calculations, the proposal would generate 1.3 to 2.7 million jobs, and is not hugely expensive, coming in at between $30 and $61 billion.
Another idea from overseas is the proposed Community Allowance program championed by the new economics foundation (nef) in the UK. The program addresses head-on one of the most frustrating realities about unemployment in market-dominated economies: so many workers sit idle while so many societal needs go unmet.
The idea of the Community Allowance program is to generate immediate employment at the community level by working with existing community organizations to identify neighborhood needs–sprucing up parks, visiting elderly shut-ins, running youth programs, or developing community gardens, for example. Such opportunities are truly “shovel-ready,” requiring little up front spadework, because local organizations simply need funding to pull simple projects from their wish list and put them into action. These are not make-work projects, the nef would argue, because they generate real value: their “social return on investment” (SROI) is around ten times the amount invested. Community activities help to build more resilient neighborhoods, which translates into lower levels of crime, substance abuse, and other social disorders that are costly for governments to address.
Importantly, both of these creative ideas would be facilitated not by markets, but by governments that bridge the gap between societal needs and markets’ limited capacity to meet those needs. These are excellent examples of the important role government can play in helping markets to build stronger, more resilient economies and societies.
What other ideas should the Obama administration be considering to create jobs immediately?