Friday, May 07, 2010

An Alternative to Unemployment Payments

Fundamentally, economies thrive when everyone is engaged in productive work in the most efficient way. As disturbing forces arise to create unemployment, the most prevalent solution has been to pay unemployment benefits to workers until they can find employment. There has been no other course, since there has been no facility to employ them beyond the private sector. This is where it might pay to make a fundamental change in national policy.

The government is always engaged in funding projects to improve national infrastructure and defenses. These projects could be structured so that the pace of activities can be adjusted relatively quickly to accommodate the increase or decrease in employment needs. If a segment of the private sector is temporarily slumping, public projects could be accelerated to employ people facing layoffs in the slumping sector. Obviously, there will be mismatches in qualifications and mobility problems, but keeping people productively employed may be better than paying them to do nothing and then having to encourage them to seek other employment or forcing them off the unemployment rolls when they’ve been out of work for some time and their skills have deteriorated.

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