Wednesday, December 26, 2012

Proposal for job growth in our economy

Unemployed receive points for being unemployed that can be redeemed for goods and services. Companies and small business, voluntarily, can use these points to contract services or buy goods - only from the unemployed.

But once an unemployed person gets work - he/she must give all excess points equally to businesses that accepted these points. Thus, businesses will consistently get added redeemable points from time to time and be able to run a shadow part of their business that helps the unemployed.

We do not need to touch the fiscal debt this way. It will provide relief but not hurt the books. It will an essence do the same as what a direct payment would do without political and psychological constraints associated with such direct transfers of cash.

The value of how many points a service is valued will be left up to the market. Window washing, 10 points an hour? Sure, but another business can choose to pay 15, no restrictions, the market will decide and the unemployed will have a choice of where to spend their points.

But doesn't this incentivize businesses from laying off workers who earn real wages and rely on the employed ? But then in order to continue paying their point system based staff, businesses will have to continue to accept and court points from the unemployed. Thus the new unemployed would have points to buy services and join the new point based economy.

Things probably wouldn't take this absolutist turn, given the attraction and faith in real money.

And many of the point based employees, would build skills and experiences that would make them competitors for wage jobs - far easier to get another job when you already have one and have built skills and references.

It would provide a competitive edge for early adopter companies as well with low cost labor and a way to utilize surplus and perhaps would add a boost in production for local consumption and , eventually, everyone would have to adopt this to survive and it would be a way to get people employed without a government hand out. The investment would come from the private sector.

In order not to cause severe havoc to the system, as of course there are unknowns and Unintended consequences, the program should be run as a pilot in a local geographic area - much thinking will have to be whether this is an urban area or an area with high or moderate unemployment.

Tuesday, December 11, 2012