Forum Post: Full Employment with a National Jobs Bank
Posted 11 years ago on Oct. 31, 2011, 1:43 p.m. EST by AlternativeSynergy
This content is user submitted and not an official statement
Full employment (3-5% unemployment rate) in in the United States has been a long sought after goal. A possible way to achieve this goal would be a National Jobs Bank where the private sector along with help from government wage subsidies can quickly re-employ the unused workforce.
The government would create an online Jobs Bank where private employers may hire an unemployed worker at a wage discount from the market labor price, with the discounted portion of the wage to be paid by the government. An internet based database of resumes that could be searched or browsed by employers with a real time system of bidding on wage discounts would be relatively easy to set up. This is superior to the unemployed worker receiving unemployment benefits and/or going on welfare, food stamps etc. It will bring in tax revenue to offset or even eliminate the cost of the program when you consider savings to the social safety net programs.
This must be a temporary subsidy, but it would be beneficial to companies by having a low-cost way of training and/or evaluating an employee’s performance before permanently hiring that employee at the full market wage. At the end of the subsidy the employer might decide the employee is productive enough to pay the full wage, or negotiate a wage with the employee. There must be checks in place to prevent abuse of this program by employers dismissing long term employees to obtain new wage-discounted employees.
Even at discounted wages, this won't work without an increase in demand for products and services. The need by the employer for the employee has to exist and if such a need existed, you wouldn't need the Job bank.
I tend to believe (and of course everything is subject to debate) that if there was closer to full employment, demand for products and services would increase. People spend more when they are working (especially after a long period of unemployment) and more people will have income that can be used for spending. This spending, helped by the infusion of federal wage subsidies, would directly stimulate consumer spending creating even more jobs (in my opinion).
Chicken or Egg. You need demand before employees are needed and you need employment to spur domestic demand. Also,a portion of people coming out of long periods of unemployment will probably take a while to increase spending as they will have accumulated debts which they will attempt to pay down.
You cannot have full employment i.e. 0% unemployment. In order for a healthy economy to exist under a capitalist economy... it requires at least 3%-5% unemployment....otherwise, you could have unintended inflation.
True, full employment would put upward pressure on wages and inflation. However high employment is worse, it puts too much strain on the social safety nets (unless we abandon them, like some ideologies would like to do). In practice, there would be a probably be a natural 3-5 percent of unemployment no matter what we do.
Oh, I agree 100% (maybe 99% wink, wink). The current unemployment rate is causing massive problems...but like we agree...3%-5% is the norm.