New Federal Solution For Economy: Put Workers On Federal Payroll

Bad economy forcing businesses to lay off workers? Let’s put them on the federal payroll, paying their wages with money the federal government doesn’t actually have.

(CNSNews.com) – The Labor Department announced on Monday that it will be awarding almost $100 million in grant funding to states to prevent layoffs by allowing businesses to pay employees as part-time workers and the federal government will pick up the tab for the cost of a full-time paycheck.

The “work-sharing” program was passed as part of a Republican-led bill in the House, H.R. 3630, and Senate Amendment 1465 to extend the payroll tax deduction and unemployment benefits. In February 2012, President Barack Obama signed the bill into law, which included the $100 million in funding.

“Establishing or expanding work-sharing programs nationwide will help business owners better weather hard economic times by temporarily reducing their labor costs while still keeping their existing skilled employees,” Labor Secretary Hilda L. Solis said in the press release announcing the grants. “This program is a win-win for businesses and employees alike.”

The work-sharing programs “allows employees to keep their jobs and helps employers to avoid laying off their trained workforces during economic downturns by reducing the hours of work for an entire group of affected workers,” according to the Labor Department.

We should just put all the unemployed people on the federal payroll. Economy fixed, am I right?

All joking aside, this is a really terrible idea. Not only does the federal government not have the money for this, but manipulating the labor markets like this will only result in unintended consequences. Such as stop the flow of skilled labor from declining industries to growing industries. A part of the economy that’s growing – like, say, the energy sector – might have trouble finding skilled workers if those workers are being kept in their current jobs in declining industries by federal subsidies.

If the government wants to help businesses, ease tax and regulatory burdens for all businesses and individuals, and then let the capital and labor flow to where they’re most needed.