Archive for July, 2011

Hausmann-McNally asks readers to share their opinion.

Do you think it is a good idea to channel people’s unemployment benefits through businesses so they can create jobs and hire those unemployed?

As a country in a deep economic hole, we need new ideas. The demand for fresh thinking has never been higher (or more scarce).

Arguably, THE main problem fueling the recession is unemployment. People don’t have jobs. Instead, they get limited unemployment benefits that barely cover their family expenses.

Hausmann-McNally S.C. president Charles Hausmann is calling for the government to give unemployment benefits directly to businesses to hire those collecting unemployment insurance.

Please respond to this article by clicking here and let us know what you think.

What’ s wrong with the outdated unemployment insurance model?

• Unemployment benefits are expensive. As a nation, we spent $109 billion on federal unemployment benefits between fiscal 2008 and 2010…and billions more at the state level. The average length of unemployment is at an all-time high of 37.1 weeks According to Bureau of Labor statistics. Many of those receiving unemployment benefits live paycheck-to-paycheck along with mounting bills, the prospect of foreclosure and the depression that comes with losing a job and career. Nationwide, the average amount of money paid out to the unemployed is $295 per week.
• While no one is questioning the need for this type of benefit, taxpayers are not getting any return on their investment. The “investment” does nothing to advance our nation’s productivity. Nothing gets made, developed, fixed, solved or created by those collecting the benefits.
• Unemployment is demeaning and emotionally harmful to the large majority of Americans who want to earn a paycheck. It is simply not good for our morale.

Hausmann asks, why not just give businesses the unemployment funds directly and watch as the unemployment rate dips dramatically?

His idea is that instead of a laid-off worker receiving $590, (the average nationwide unemployment payout), every two weeks from the government, a business would receive that money and use it to hire and pay the same unemployed worker. That business would (according to the Hausmann model) pay their new worker an extra 25-50 percent on top of the unemployment wages, thereby adding its own money to the economy.

The government would contribute the benefit for a year, but the business will be obliged to keep, and pay for, the worker for an additional six months after that.

Besides pouring money to the economy, this plan would immediately increase job growth. Employers would scramble to create jobs knowing that the government was footing most of the bill. An added benefit is that there will be more money in the unemployment fund through taxes on the new workers’ wages.

There would have to be strict rules and penalties, Hausmann notes, to prevent businesses from abusing the benefit—like firing someone so they can hire a new, subsidized worker. The fines for violating this policy would have to be stiff enough to scare off any potential fraud.

The best thing is that the cost to taxpayers would be zero. The Hausmann Plan merely re-directs benefits, does not create new ones. Hausmann says that by spending the same money we already are, we could reduce unemployment and pair workers with employers in the hopes that many of these jobs would turn into permanent positions down the line. “What have we got to lose?” Hausmann says. In no way is he advocating dropping unemployment benefits. He just wants to see them going to something that would produce long-term benefits, not just a bandaid for families in trouble. And, he feels that working is better for Americans than lengthy periods of unemployment that can result in lost incentive to return to gainful employment.

“Tens of billions of dollars are already being spent on unemployment benefits without any productivity being required by the unemployed, so why not just apply the money already being used to this idea?” Hausmann said. “The United States is more than $14 trillion in debt, and new courses of action need to take place.”

This plan encourages support from all political ideologies, he said. It takes money out of the government’ s hand and gives it to the private sector to increase jobs. Unemployed folks get the chance to make a contribution to society while still getting help from the government.

“Both financially and ethically my plan benefits all Americans.”

“We need new ideas so we can give our neighbors their identity, dignity and self-sufficiency back,” Hausmann said.

We want your ideas on the subject of unemployment benefits. Please feel free to comment in the marked section under this article if you would like to weigh in. Bad idea? Great idea? Have you been unemployed? Tell us what you think? We are planning to forward responses to legislators to see if we can inject some energy into the creative problem solving we so desperately need.