Paying the unemployed

It should come as no surprise that U.S. jobless rates are rising again.

Last month it jumped to 10.2 percent, a 26-and-half-year high that puts shame on the administration that swore they would do everything to keep Americans employed. Some analysts even claim that getting one of the 2.4 million jobs available is about as tough as getting into Harvard. 

Needless to say, the odds are not good.

This spike in unemployment has not gone unnoticed by President Obama who on Friday promised that he wouldn’t “let up until the Americans who want to find work can find work.”

But if the president wants to get jobs into the hands of needy Americans maybe it is time for a new strategy.

This administration has been relying solely on the stimulus to create new jobs. And while I was in favor of this experiment when it began, it has now proven itself to be too little too late.

Since the stimulus package began, only 650,000 jobs have been created. This is far short of the administrations goals of 3.5 million jobs, which still won’t reach the demand present for work.

The statistics are pessimistic at best; since the recession began, job openings have declined from 4.4 million to 2.4 million and there are 8.2 million more unemployed since December 2007.

Now the administration claims it will be considering infrastructure investments and business tax cuts to spur the creation of jobs. But is this really enough? Maybe it is time for something even more drastic.

It may sound like an unorthodox approach, but the administration should consider paying the unemployed to go to work. This would be accomplished by subsidizing workers’ private-sector employment or by creating new government paid jobs.  It may sound expensive but it is in fact relativity cheap when the savings in unemployment benefits are factored in.

This is the model used by Germany today. The country, whose economy has witnessed a major decline, has managed to keep its unemployment under 8 percent by using this method.

In fact, the states used this strategy during hard economic times in the 1930s and the 1970s, but the Obama administration still does not view it as a viable option.

Dean Baker, the co-director of the Center for Economic and Policy Research has a theory why. “(The administration) is scared of (any plans) seeming like old-fashioned make-work, but that’s what it is: You’re giving (people) jobs because they have nothing left to do. Giving people a shot at a job has to be worth a little bad publicity ... but as in a lot of areas, (the administration) proved more cautious.”

The opportunity for Americans to be put back to work should take precedence over this administration saving face. While the stimulus is struggling to prove its worth, other programs and strategies should be considered to help ease these hard times.