This conservative economist cares more about unemployment than Obama does

August 8, 2013

Obama does his Fonz impression at Knox College. (The Washington Post)

President Obama's big economic speech at Knox College in Illinois last month was short on specific new policy proposals in general, but it lacked, in particular, any new plans to help the millions of Americans who remain unemployed. Indeed, the word "unemployment" only showed up once, to brag about its (extremely slow) downward trend.

So what would Obama be proposing if he actually made reducing unemployment a priority? Michael Strain, an economist at the American Enterprise Institute, has a great set of suggestions, many of which (perhaps surprisingly for an AEI guy) involve new government spending programs:

• "Offering relocation vouchers to the long-term unemployed in high-unemployment areas"

• "Allowing firms to hire the long-term unemployed at less than the current minimum wage and supplementing their income with an EITC-like payment"

• "Reforming our disability insurance program so that it doesn't serve as a permanent exit from the labor market"

• "Publicizing and encouraging worksharing as an alternative to layoffs"

• "Getting the government off the backs of entrepreneurs"

• "Reducing occupational licensing requirements"

• "Encouraging domestic energy production"

• "Providing lump-sum bonus payments to unemployed workers who find a job"

"Some of these suggestions involve more government action," Strain notes. "Some involve the government getting out of the way; all should be considered." Indeed. Also worth looking at is the proposal of Kevin Hassett, another AEI economist, to have the government engage in direct hiring of unemployed people.

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Neil Irwin · August 8, 2013