RealClearMarkets ahs an interesting article advocating the ‘negative income tax’ as a way to make 30 million new jobs in 5 years.
Another summer, with job growth lagging population growth? That’s bad. A closer look at the long-term historical data reveals something far more disturbing. We’re 30 million jobs short of full employment. Can we put 30 million people to work in the next five years, and end this economic malaise? Yes, we can.
Basically, you set a minimum wage. But you don’t require employers to pay it. They work a deal with the employee, for, say, a $1 an hour, and the government picks up the difference to the minimum wage.
The author says this would be cheaper than the recent stimulus and would actually put people to work, breaking the chain of long term unemployment. But I don’t tihnk it would be because the stimulus stops, this doesn’t. And wouldn’t. It amounts to a new government program, and they never stop.
The idea is interesting, but I have concerns. For instance, what happens when the millions of people currently making $8 bucks an hour, now are fired and rehired for a $1 an hour?
And what do you do with long term people never worth $8 an hour? Does this replace welfare?
Finally, It seems unlikely that somebody worth $1 an hour to me will miraculously be worth $3 or $4 an hour. People don’t change that fast.
So, keep the ideas coming, but I’ll pass on this one.