Denmark, for instance, combines a generous system with an extremely aggressive job-retraining program. They will not let you sit on the dole indefinitely. But they will relieve you of financial worry, and give you something concrete you can do to make yourself more employable. Judging from their employment figures, this works very well.
If you don’t like the Danish program, there are other things we could do. We could create a temporary hiring program, along the lines of the Works Progress Administration, to be activated during periods of long-term unemployment, with a mandate to hire as many people as necessary to keep the unemployment rate down. These jobs would be time-limited, ending when the unemployment rate dropped below its target for several months running, and they’d pay less than normal jobs — just enough to keep the lights on and prevent labor scarring. We could waive the payroll tax on new hires — one month’s rebate for every month that the new hire has been unemployed. And if all else fails, we could offer people grants to move from places like Buffalo, New York, where there are no jobs, to North Dakota, where the oil industry has pushed unemployment below 3 percent.
We’re too afraid of being taken advantage of. But it helps no one to fixate on mythical villains. And when politics get involved, that is often what we most like to do.
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