1. We need to distinguish between dealing with the current unemployment crisis and dealing with our long-term labor market problems. Some policy solutions may do both, but many may be more appropriate only as short-term solutions, or only as long-term solutions.
2. The current unemployment crisis is severe enough that we need to explore a variety of solutions. Work-sharing should be considered. Public service jobs should be considered. Some sort of employer tax credit for new job creation should be considered. Counter-cyclical revenue sharing should be considered. The issue for all of these is: what job creation impact are they likely to have, and at what cost.
3. Dean Baker recently has an interesting policy brief at CEPR that presents some numbers on work-sharing as a solution to the short-term unemployment crisis. My colleague Sue Houseman at the Upjohn Institute has an article with Katherine Abraham in our July newsletter that looks at short-time compensation via the UI system as a way of encouraging work sharing.
4. As for work-sharing and our long-term economic problems, I am less convinced than the Sandwichman seems to be that work-sharing is "the answer" to our long-term economic problems. I think this claim requires a high standard of proof, as most deeply rooted economic and social problems do not permit one "answer". I do think there is merit in trying to move towards shorter annual work hours as in much of Western Europe, not so much because it solves our long-term economic problems, but because it would increase the quality of life.
Senior Economist, Upjohn Institute
Thursday, October 22, 2009
Hoisted From Comments
From Tim Bartik, Senior Economist, Upjohn Institute