Obama Calls for Rethink of Unemployment Insurance

http://www.futureofcapitalism.com/2011/08/obama-calls-for-rethink-of-unemployment-insurance

Remember that Reason.com forum with 15 different people on "What would you do to improve job growth?" My suggestion was "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."

So how about this: at a town hall meeting in Atkinson, Ill., today, the president, unprompted, during the question and answer part, said:

We do also have to look at some programs, because they may not be well designed, as well designed as they could be. I'll give you an example. Unemployment insurance, the way it's designed -- it was designed back at a time when you'd have layoffs and then people would hire you back when the business cycle went back.

The economy is changing so fast right now, people are having to re-train; companies move to an entirely different state. We've got to rethink how we do unemployment insurance. There is a smart program in Georgia. What they do is they say, all right, instead of you just getting unemployment insurance, just a check, what we're going to do is we will give a subsidy to any company that hires you with your unemployment insurance so that you're essentially earning a salary and getting your foot in the door into that company. And if they hire you full-time, then the unemployment insurance is used to subsidize you getting trained and getting a job. (Applause.) And so those kinds of adjustments to programs -- we've got to be more creative in terms of not doing things the way we've always done them.

This follows last week's Republican debate, in which Governor Romney said, "Unemployment benefits, I think they've gone on a long, long, long time. We have to find ways to reduce our spending on a lot of the anti-poverty programs and unemployment programs. But I would far rather see a reform of our unemployment system, to allow people to have a personal account which they're able to draw from as opposed to having endless unemployment benefits. So, again, let's reform the system, make the system work better by giving people responsibility for their own employment opportunities and having that account, rather than doling out year after year more money from an unemployment system."

I don't want to get my hopes too high — President Obama or even President Romney, not to mention the governors or the Congress or the state legislatures, may find a way to foul up unemployment reform. The Georgia program the president mentioned, which seems to have been created by, of all people, Zell Miller, leans toward "training" rather than actually working. But this is an idea that has the potential to be huge, and it's encouraging to see it getting some attention at the highest levels in both parties.

by Ira Stoll  |  Aug 17, 2011 at 10:51 pm Related Topics:  Politics, President Obama, Unemployment receive the latest by email: subscribe to the free futureofcapitalism.com mailing list