Dean Baker explains in this short article (PDF, sorry):
The basic point is simple: job sharing would use tax dollars to pay firms to shorten the typical workweek or work year, while keeping pay constant. If workers' purchasing power is held constant even as they work fewer hours, then labor demand will be held constant. This should cause employers to want to hire additional workers to make up for the fewer hours worked by their incumbent work force.So this is sort of the mirror image of offering tax credits to companies when they hire. Job sharing goads employers to hire by offering them a pile of cash if they shorten the work week. Hiring tax credits reward employers by giving them a pile of cash if they expand their payroll.
But each of these strategies have downsides. A shorter subsidized work-week guarantees more money in employers' hands, but it doesn't guarantee more jobs (employers could pocket the subsidy). Also, the tax credit is easily gamed. Employers can bring contract workers onto payrolls, which gets them a tax credit but doesn't increase employment. Or they can flub the rules more deviously by laying off employees as the law is passed with the understanding that they'll be re-hired, with a handsome tax credit, weeks later.
The downsides don't blow up the case for job stimuli. But they deserve rigorous scrutiny from White House economists as the administration decides how to address double-digit unemployment that could be the norm for 2010.
France tried the shorter work week thing - 35 hours with overtime being illegal. It didn't help one bit and, according to many, actually hurt employment. Over the last 10 years or so France has had structural unemployment of about 9%, with 25% of workers employed by government, bringing the structural private sector unemployment closer to 12%.
Every single thing that our current liberal government has proposed, or talked of proposing is anti private sector at worst and creates private sector doubts at best. Healthcare "reform" increases employee costs. Cap & Trade increase all costs. Increased taxes on management (ownership in small companies) encourages playing with the books, looking for various shelters, while discouraging growth.
The liberals in DC have not uttered one positive word about our private sector. They do attack the latest "evil" corporations: "evil" car companies for making SUVS, "evil" energy companies for supplying us with combustible fuel, "evil" electric utilities for burning fuel too make electricity, "evil" pharmaceutical companies for charging to much for drugs that save lives and decrease suffering, "evil" health insurance companies for charging too much so they can pay the bills from providers, "evil" lenders for allowing people to borrow too much. The list goes on and on.
Just this week the CEO of Emerson Electric said the government is "Destroying Manufacturing" and, consequently, all the jobs that go with it.
http://www.bloomberg.com/apps/news?pid=20601103&sid=a_EbBQyskKl0
All of the above is not lost on businessmen. They see uncertainty at best and an anti business government bias at worst. That does not bode well for increased employment.
Wow, after decades of 'pro-business' policies that have demolished our middle class as well as our manufacturing, hollowed out our infrastructure, unleashed demons of speculation all across the land, all started by that darling of the Right, Ronald Reagan, and climaxing in the most spectacular collapse since the Great Depression, we still have to hear this garbage...
"The liberals in DC have not uttered one positive word about our private sector."
Listen, if you guys had been successful in delivering any of the things your pro-elite policies had promised, you wouldn't be out of power.
You are out of power because your "tax cuts for the rich, smash the middle class" polices Do Not Work.
Get it? You had your chance. For DECADES. You lost it because you FAILED.
Now either go home and repent, or listen and learn.
Minka might have a stronger point if she weren't simply a partisan hack.
Rather than the Rube Goldberg approach supported by Derek Thompson, the White House, and Paul Krugman, how about the pro-American approach of simply enforcing our imm. laws?
The way to encourage the BHO admin to do that is to have an experienced questioner ask Janet Napolitano questions like this. Really put her on the spot about the fact that her policies are taking jobs away from Americans, and then put video of her being "p0wned" on Youtube where hundreds of thousands or millions of Americans can see just little the Beltway establishment - Dem, GOP, and MSM and sub-MSM hacks included - cares about them.
I'm amazed you think that Americans can just shut the borders and still have high-paying jobs somehow. International competition and low-wage labor will just go away or something, and we can continue to build Fords for ourselves and be rich.
The middle class isn't in trouble because of "the system" screwing us over. The rest of the world has caught up, automation has increased, and we're sitting still. We have basically the same skills as other parts of the world, but we want to be paid five times as much.
It's not going to happen, no matter how many doors you slam in the face of immigrants, or how many tariffs you slap on imports.
mgoodfel: I wanted to tune you out after your strawman in the first part, but I read the whole comment and I don't see the part where you discuss what's at the link.
Deporting 100 illegal alien janitors would deprive us of their spending, but at the same time it would also allow 100 Americans to get off unemployment or the like; it would be a net benefit and would have no long-term cost. It would also help reduce corruption in the U.S., having a great non-financial benefit.
The only way someone could oppose something like that is if they're "taking a taste" in one way or other or if their ideology doesn't make an allowance for patriotism. Let us know which it is.
It would be the latter. My ideology says that Americans shouldn't expect a better standard of living just because they are Americans. We have to compete with the rest of the world, one way or another. If that's unpatriotic to you, then too bad.
For an economist, Paul Krugman sure doesn't seem to think markets are good for much. On one issue after another, he'd prefer command and control.
This is a very good idea. I have written about this before. Those kinks would have to be worked out. People often spend more when they have more time as well, and their would be the benefit of giving families more time together and individuals more time to get involved with watching over government. It would work best with the kind of work that this country needs more of. There would be no point in doing it with investment bankers. I mean really. I can imagine more jobs taking care and cleaning up our environment, but not more insurance men. I can imagine free childcare for all, but not hiring more actors for television shows or more anchors on Fox news.
This is currently policy in Germany. The concept is that they would rather pay people to work than pay them to sit home. One major benefit of government job support is that people whose skills are stagnating while they sit at home on unemployment maintain a contiguous work record. One of the saddest outcomes of the current long-term unemployment is that many of the unemployed will never get back into the job market. This would help mitigate this.