Last week I wrote a suggested jobs speech for President Obama that would emphasize the reality that we will not see a return to full employment or strong economic growth for several years to come, and articulate the fact that our economy has some serious structural challenges facing it.
Despite challenges such as misaligned skills in the work force, a debt supercycle that still requires years of deleveraging with households contributing more towards savings and paying down debt than towards consumption and investment, and transformations in the structure of economic productivity, there are things we can do that will help in the long-term.
Admittedly, many of the benefits from these reforms will be long-term in nature. So with that in mind I also propose seven initiatives that will benefit the economy the short-term without ignoring the long-term structural problems we still face:
- The Joint Special Committee in Congress should put together a deficit-cutting package that exceeds the $1.2 trillion minimum and turns the upward slope of government spending down, instead of just slowing the rate of spending over the next 10 years. This would provide at least a small amount of confidence to some private sector companies.
- In addition to keeping the payroll tax holiday for employees, we should extend it to employers, and pay for it with savings from tax code and entitlement reform.
- Recognizing that the unemployment insurance system is integrally woven into the social fabric of American society, we should realize that it is not going away in the near future (even though it should). So if we are going to keep this program we can at least make it more efficient: I recommend that unemployment checks be converted into vouchers given directly to companies that hire workers to keep them on payrolls for at least three months.
- I propose curbing the powers of the National Labor Relations Board to block manufacturing from relocating—69 percent of manufacturers recently reported that the NLRB has slowed their efforts to expand and create more jobs. This will not bring back millions of manufacturing jobs, but it will slow the rate at which manufacturing jobs disappear in America. (The House of Representatives has just passed a bill to this effect.)
- We should remove restrictions that prevent employers from hiring on their terms, such as the minimum wage, at least in local areas where unemployment is extremely high, and repeal the lending cap to small businesses placed on credit unions.
- I encourage Congress to repeal regulations like the Sarbanes-Oxley accounting rules that keep small companies from going public and thus hindering their ability to expand and create jobs.
- Finally, I encourage the states to move quickly in phasing out occupational licensing requirements, many of which simply serve to create high barriers to entry for entrepreneurs.
Naturally, these collectively will not solve the problem. There are long-term, structural issues that we need to address, so I propose seven objectives for long-term reform:
See the whole Reason jobs speech here.