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Congress should stop extending unemployment benefits, and better yet, restructure the unemployment insurance program or block-grant it to the states to allow them to experiment with ways of doing so. The idea is to change the program so it creates an incentive for recipients to get a job, rather than an incentive for them to remain unemployed.
This could involve altering the unemployment benefit formula so that the amount of the payment gradually decreases over time, reducing the propensity of beneficiaries to stay on unemployment until they frantically search for a job and find it just as the benefits run out.
Or it could involve allowing states "the flexibility to convert their unemployment insurance payments from checks sent to the jobless into vouchers that can be used by companies to hire workers," as Bloomberg News columnist Jonathan Alter suggests, relaying an idea from a Democratic candidate for U.S. Senate from Massachusetts, Alan Khazei.
Or it could involve changing the program so recipients get a hefty share of their benefits up front, as a lump sum. They can then use the money as capital to start small businesses. Or if they find a job quickly, they can save or invest or spend the money. (No repeat passes, though; the idea is to increase incentives for finding or creating a job, not rewards for people who get themselves fired.) Another approach might be to fold unemployment together with health, college, homeownership and retirement as expenses that people can save for in a tax-favored account.
If I could press a button and instantly vaporize one sector of employment law, I think I'd pick age discrimination.
Its beneficiaries are among those needing least assistance. The main cash-and-carry effect of age-bias law is to confer legal leverage on older male holders of desirable jobs, such as managers, pilots, and college professors, who by threatening to raise the issue can extract ampler severance packets than might otherwise be offered them. Much legal talent is wasted in the resulting exit negotiations, which seldom seem to rouse the ire of critics of gaudy executive pay, golden parachutes and so forth.
It blatantly backfires on those it tries to help. Once cut loose from the old job, those same buyout recipients find it harder to land the next high-level job because of the perception that older hires are more likely to need buyouts not far down the road.
It generates pointless avoidance mechanisms. Ask your HR director about the costly stage in layoff strategy known as "age-balancing the RIF" or about the many small-talk questions you're not supposed to ask at job interviews for fear of seeming interested in the subject ("I notice you're a veteran. Which war?") or about the brain-cracking legal headaches that arise from the premise that (at least in some situations) the design of pension plans is supposed to take no notice of age.
Its intellectual basis is lighter than helium. Race, sex, sexual orientation and disability each form the basis of a major identity politics movement. But really: "ageism?" It's one thing to abridge liberty to expiate the national guilt of antebellum slavery, but can anyone keep a straight face in proclaiming persons of late middle age a historically oppressed class?
Please, I want to see this law repealed before I'm too old to enjoy it.
To make the greatest impact on persistent unemployment, the government should pursue policies that allow the free market to set wages, benefits, and all issues related to employment. Just as employees are allowed to leave jobs for whatever reason, employers should be allowed to hire and fire based on any criteria without fear of litigation. In other words, liability cost for hiring employees should be minimized. Employees become easier to hire once employers know that their downside risks are minimized. In addition, all labor laws protecting employees from employers, including minimum wage laws, should be repealed.