WSJ: Programs to Urge Hiring, Reduce Unemployment Fall Flat

September 28, 2012 by Talmadge Coley • Blog Posts • Tags: National Review, Unemployment, WSJ • 4 Comments

Yesterday, National Review published an op-ed by our CEO Pete Hegseth that argued that special programs to spur veterans hiring may be well-intended, but they aren’t getting the job done.

Here’s something that sheds a little more light on that argument. A recent report in the Wall Street Journal examines the government’s efforts to encourage private sector hiring of  the unemployed through special incentives. The result is predictable: the program hasn’t gotten off the ground due to high costs and too much red tape.

The WSJ reports:

Under the federal law, states were invited to submit ideas for “re-employment demonstration projects”—initiatives that motivate companies to hire people who are collecting unemployment checks. The government plans to initially pick 10 winners and reward those states with waivers to federal unemployment-insurance and labor allows, allowing them for the first time to fund programs out of their own unemployment-insurance trust funds.

But seven months after the federal law was passed—with bipartisan support as part of the tax relief act—many states say they won’t apply because they don’t have the funding to set up and comply. This situation has surprised some original sponsors and frustrated some employers.

It’s an all-too-familiar story. We’ve focused here on shortfalls of special programs and incentives aimed at encouraging veterans hiring, which for those who served in Iraq and Afghanistan is higher than the national average at 10.9 percent.

Here’s the problem: While these targeted programs and incentives are politically popular, there’s little evidence that they actually deliver on their promises. So let’s try something else.

That’s our argument in the National Review piece. Rather than trying to develop gimmicky solutions that effectively seek to “bribe” private sector firms to hire the jobless and unemployed veterans, our elected officials would do better to direct their energies toward implementing solutions that will spur confidence—such as reducing federal spending and debt, reforming bloated entitlement programs and embracing pro-growth tax reforms.

After nearly four years of stagnant unemployment rates, it’s time for a fresh approach.

Talmadge Coley is a Policy Analyst and a member of the Concerned Veterans for America team