Take a third option: My solution to unemployment and unemployment benefits

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First, the initial 26 weeks of unemployment is not a handout and costs the government nothing.  It is paid for by payroll taxes on employers.  And is needed as finding a job does not happen over night.  However, 6 months is good enough for a large majority to find work (especially given that many who have hard to place skills get severance anyway which extends the time they are getting money).  SO I do not advocate total elimination of unemployment,.  However the extensions are good to go and your program is viable provided:

Current unemployment is not taxable by FICA (so while they say you only get $350/week, that is actually worth 7.65% more than what you would make in the private sector).  In addition, although not income tax exempt, you are not required to pay taxes on the money received until you find work, so the tax is deferred.  For your program to work, those 2 things would have to be factored into the money they are getting from the government for their make do work.  In addition, the government would have to charge more than the minimum wage since the employer has to pay additional taxes on employees (the unemployment tax mentioned above, plus a Workers Compensation tax, and the employer part of FICA/Medicaid).  For it to be beneficial for the employer to outright hire the worker, the cost to them would have to be higher than what it cost them to hire the employee directly.  The government could use the excess to either pay the taxes like the employer or for administrative costs.

Third, current temp companies would not like it.  It would basically put them out of business.  That is something to consider, and I do not have a solution for that one.

And finally, it would be a good idea.  Turnover is very costly for employers.  This system would allow them to not incur any of the costs of turnover while still "test driving" the employee to see if they would make a good addition to the staff.  Laying off an employee that does not fit in does affect both hiring costs and the rate of the Unemployment tax for the employer, so these costs virtually disappear with this system. And is the reason many employers now use contract employees for new hires.  The law is already in place that states the contract employees cannot be hired for longer than 12 months without getting regular benefits, so the employer cannot abuse the system (It is called the Microsoft law).

I am totally in favour of your proposal.

However, do note that at least in Europe welfare is simply paid to keep people from rioting. Whenever those payments are affected by politics, we have burning cars. I figure that in the middle ages those people were the local baron's thugs, another group of people paid to leave others alone.

But assuming that we get those riots under control or that America doesn't have that problem (which is possible since Americans have a different mindset), your proposal is excellent. It's very socialist, too. (I am assuming we keep special rules for those actually physically unable to work, like severely handicapped people.)

However, I am against the renting out to businesses scheme. Governments should not be in the business of competing against recruiting companies. In fact governments should not be in any business, with "business" being everything where we can logically expect competition (as opposed to areas where competition is physically impossible or legally limited*).

There are enough infrastructure jobs those people can do.

It even balances out. Whenever there is a recession, there will be more people on the dole; and at the same time government is supposed to improve the infrastructure (streets, bridges, highways, railroads, canals, pipes, cables). This would happen at a time when the economy is using the existing infrastructure less (because of the recession).

The proposal would thus support anti-cyclical economics, an actual Keynesian policy.

The big irony is that your proposal is technically left-wing. But liberals will hate it, I am sure.

I am totally in favour of it. The proposal is socialist, Keynesian, efficient, and simply very good. It's the sort of proposal that should come from the left. That's what socialists are actually for in politics: improve economics using socialist ideas. That the proposal comes from you instead shows us how badly organised and degenerated today's socialists are.

I am also back.

*Areas where competition is physically impossible or legally limited:

Physically impossible: shortest street between two towns; bridge over river at best location; shortest railway link etc.

Legally limited: police force, military, government etc.

Those are areas where the proposal folk could work (except I would really let them into the second list).

Sure, I was speaking only on unemployment, not disability.

although I have been considering an alternate program for (at least some) of disability cases, where instead of being paid not to work, the government provides what they need to work... aka, colorblind individuals are not allowed to drive, not being allowed to drive gets them disability benefits instead of a job. Take some of those government employees and set them up to do free car pooling to and from the place of business.

This will be dependent on the individual disability, the costs of compensating for it, etc. Will require some small scale prototype testings to see what works and what doesn't.

This could actually be a primary job of the government employeed, provide the assistance needed by disabled to hold a job.

You are right, this was a bad idea. At first I wrote it as a part of the plan, then I had second thoughts and edited to be a "not sure", now that I had a night to sleep on it I realize how bad an idea it is, and why. You and Dr. Guy just further solidified the point with your excellent arguments.

The labor should not be rent-able at all.

Heh... Well, I am of the opinion that 90+% of those receiving unemployment benefits would get a job the moment you stop paying them to not work.

And while the complete elimination of all handouts is the capitalist approach, it will never happen in a democratic society. So since we must have some socialism, it might as well be well implemented socialism.

You are right that in theory, if the left is totally honest and upfront, this is the type of policy they should be coming up with. But for this proposal to come from the left, the left needs to honestly believe in what it is claiming. Whether the left or the right is correct isn't issue, if either the left or the right is correct, this proposal will still work... but for it to be accepted both the right and the left need to have been honest thus far about their reasoning. I don't believe that the left has been, I believe that the left is actually fully aware that paying someone not to work disincentivises work, but that is a tool in their goals of harming our economy (they believe it will make the rest of the world less poor and exploited), harming our industry (they believe it will save the planet from pollution), redistribute wealth (they believe that anyone who is "wealthy" is evil) and so on.

All money spent by the government is acquired via taxes... that the first 26 weeks are paid for by payroll taxes instead of general taxes doesn't change it being tax money that pays for it.

It should be a voluntary private insurance instead of a government program paid for by taxes or a government mandated purchase of such insurance.

You are right that I hadn't considered that when I carefully worded my plan, to remain in the spirit of my plan it would require that those two things be compensated for...

To be honest, the income tax is retarded and should be banned altogether. I am for the http://www.fairtax.org/site/PageServer

Incidentally, I came up with what I termed the perfect tax system, the fifth person I told it to informed me that someone else already thought of it and its called the fairtax. Turns out I am not the only person with a working brain.

Unless they are the one that is wealthy. Then it doesn't count. Their wealth is righteous because they care.

but of course... for the truely wealthy liberal, they are the exception.

For the majority of wealthy liberals, they themselves are simply not really wealthy... they are merely "upper middle class" despite people less rich then themselves being "evil wealthy"

Finish completely with the whole entitlements/contributions mindset. "Social Wage" for everyone. From a multimillionaire/billionaires to down and out hobos. All get about $400 a week. Student, pensioner, unemployed, holiday pay, maternity/paternity pay, extra support for those in very difficult businesses such as small farmers, sick leave, .... ad infinitum = COVERED!! Child support could be rolled into it too giving 25% for a new born, 50% for older children. Simple %+ system for pensioners possible too) = Humungous bureaucracy saving system. Those unemployed would have a great incentive to find work as there would be no "claw back" problem ("Oi wuz better off loike when oi wuz unemployed"). Cost to taxpayer? Not much more than the current system, or should I say current farce. Even employers would love it. No worries about meeting sick pay or holiday pay. ... Yep, never happen. Too radical and too socialist.

You want to finish with the whole entitlements mindset AND give everyone $400 a month?

$400 a month is wealth beyond the dreams of most people on this planet. Even the radical communists in Germany (not the German government but the actual communist party) have never argued for that much money.

Aren't new-borns more expensive than older children?

Yes, it will never happen. Too radical, too expensive, and too completely unnecessary.

@Daftvador: 400 a week for 310 million people = 6.47 trillion dollars a year.

the total income in 2010 of the USA was 2.381 trillion

that is 1/3rd the cost of your plan. Furthermore, a whole lot of people will not want to even bother working under such a plan so there will be even less money available. plus, you know, all the other financial obligations that the government has.

@Leauki: do away with the mindset of entitlement and contributors, as in "its a basic human right, not an entitlement" and "everyone is really a contributor, even if they don't work they participate in culture" or some such.

That's what Karl Marx said.

He said it in a time when everyone definitely didn't get what he needed and when many people could not, for legal or other reasons, contribute according to their ability.

Conservatives believe in "from each according to his ability". Conservatives think that everyone should work as much as they can.

Today's liberals believe in "to each according to his needs", and define "needs" as a life most people on earth can only dream of.

Karl Marx, the inventor of communism, in today's politics seems like an advocate of a "third way", a combination of the two.

Right and left are supposed to advocate the first part and both parts of Marx' principle respectively. But the left certainly do not even pay lip service to the first part.

A healthy unemployed man without dependent children living on welfare. Does he really contribute "according to his ability"? Is that his "ability": sitting at home, watching television? (Would he discover more ability if he didn't get "according to his needs"?)

And while we are at it, why can social welfare recipients in Europe afford television sets when public hospitals are still underfunded? Aren't hospitals more important than television?

I think that today an honest socialist has more in common with a conservative than with a liberal. Conservatives have started to believe in the second part of Marx' principle while liberals have entirely forgotten about the first.

This reminds me of an excellent photo I took to illustrate the point.

Unemployment check, how else would you pay for your video card upgrade?

Daftvador,

May I ask how much money you make that you think that $400 per week is the minimum amoung people ought to live on?

For me $400 per week is a lot of money. And I work hard for my upkeep.

(I make about $2,000 a week but it varies quite a bit, mostly royalties... and I am perfectly happy to pay almost double the income tax I do so as to bring about this system) .... All the same, $400 pw social wage is a bit excessive perhaps. More like $200-300. With a GDP of about $45,000 per capita p.a. (USA) the payouts would approximate to about $13,000 per capita pa. (remember, EVERYONE would get this payout while of course having to pay a bit more in taxes to afford it) Plenty to spare in other words.

One the other hand, maybe $400 a week is reasonable. After all there's beer, ciggies, fine chockies, the latest ipad, etc to think about.... .........

Not everyone has a very high income based on a government-created monopoly. Most people work very hard for money every week.

$2,000 per week is a lot of money and so is $400 per week.

Unemployment ranges by state, but most fall into the $350-375 range.  So $400 would be welcome by those who are unemployed.  It would also remove their incentive to find a job.

I don't think the government can ever "solve" unemployment.  It's not a legislative problem.  It's an attitude (right of entitlement) problem.

Even now, during the recession, my local newspaper is FULL of job offerings every single week.  Why do they go unfilled?  Many businesses are looking for workers.  Businesses that are not glamorous and require actual physical labor.

The general mindset is..."WHY would I shovel snow, mow grass, work fast food, (ie do something I consider beneath me, or that is too hard) when I can make more money sitting home collecting unemployment?"

No amount of handouts are enough. 

They should stop.

If you don't work, you don't eat.

Simple.

And watch people flock back into the work force.

Sure you can solve unemployment, you just have to realize that the CAUSE of unemployment is the government paying people not to work. My plan is to solve "being paid to not work".

If you are a liberal you don't believe that government handouts are the cause of unemployment, you believe that some people simply cannot find a job no matter how hard they try, even though they are willing to work minimum wage doing physical labor... (this isn't true, but it is what they CLAIM to believe; they obviously lie, they just want government sanctioned theft)

Anyways, IF this IS a real situation, then my plan solves it as well. That is the genius of the plan, it does not hinge on me being right... it works regardless of who is right.

This sums up the first half of my plan. The other half addresses the possibility that I am wrong and liberals are right (about what they claim, not their true evil motives)... It solves that issue with minimal cost (if we conservatives are right, then it will cost 0 dollars, if we are wrong, it will cost a little most... the more wrong we are, the more it will cost... but it will be significantly LESS then the current cost even on a worst case scenario). It does all that without compromising the first half of the plan.

Government provides several mechanisms to ensure that some people eat without working, social welfare is only one of them.

Land ownership comes to mind.

You are throwing the baby out with the bath water.  The Government did not GIVE the land (at least in modern times) to people.  Poeple BOUGHT the land with money they EARNED - they then used the land to earn more money.  Indeed, land titlement and ownership is the source of bringing a society out of poverty and start it on the road to economic health.  It is the ability to use the land - both as a source of income and a guarantee of loans - that allow entrepreneurs to create new busines and thrive.  Without it, the people are confined to merely getting by as they are forced to consume their capital.

No, land ownership is not social welfare.  It is the fruits of work (leaving inheritance out of this), and as such is like any other asset - you earned it - you can use it as you see fit.  Government only protects the rights of the title holder.

I think the real question here is....if you think you own it, and the constitution supports your assertion, are you in fact the land owner?  lol

I can think of two schools of thought on this topic...probably more, but these are the two I hear most often.

1.  The land belongs to the country/government and you are "allowed" to own it.  You must pay anytime there is a transaction on the land (fees, licenses, etc), or if you wish to sell certain rights...(mineral, building, etc).  But the whole premise is that the gov owned it first, so we're really just "leasing" it.  Therefore, if the "government" needs your land to build a parking garage....well, so sorry...time for you to move on.  Also the gov. has jurisdiction over your property, ie zoning etc.

2.  The land belongs to the landowner.  Period.  Bought and paid for, the government (and any other unwelcome visitor) best not tread on private property lest there be retribution.  Before the United States was a sovereign country, there was land ownership, and will be long after it is gone. 

I side with land owners.  Property rights are a cornerstone philosophy in the US.  I think that is why some people believe the government really "owns" our land because it made such a show of selling it to citizens in the beginning.

But, if the US government implodes  tomorrow and is no longer in existence as I know it next month, my land is still mine.  It is there, I occupy it (or have someone occupy it).  No one will take it without a fight.  Granted, I may lose, but the philosophy doesn't change. 

Owning land is something any person in America can have with a little work.  And to be honest, it doesn't even have to be hard work.  Land if fairly cheap right now in most places. :) 

Unemployment trap. Social wage deals with both. The social wage would massively enhance incentives to find work. All earnings would be a plus.. no claw back.

Land is not created by man and thus cannot be owned by man, is what I think.

Freedom includes the right to walk where I want. If a government takes that right away and imposes monopolies, it better be because it's better for everyone (and it is), but it cannot be because somebody has the alleged "right" to take away my natural freedom.

Land ownership is a government-created monopoly and those that make money from it, for example when land gets more valuable because the population increases or because other people have with their labour made the location more viable, those that make money from it receive that money without work, just like social welfare recipients. I don't consider them any better.

http://www.henrygeorge.org/archimedes.htm

It doesn't matter how much or little work one has to invest to buy land, a government-granted monopoly is a government-granted monopoly.

That sounds like that fake business out of thin air (literally)... carbon credits. Put a price tag on anything, real or imagined, and force people to have a need for it, real or imagined, and wa la, instant payments by many and riches for the few.

Yes, that's what it is.

The difference is only that for land in the current system we have private ownership of the carbon output (rather than state control of it) and that the need for land is quite real (whereas carbon credits are an invention).

But the instant payments by many and riches for the few angle is there. That's the idea of land ownership of course.

Otherwise society would have developed such that everyone uses the land they need and there would never be rent payments by a user of land to an owner of land who contributes nothing to production.