A few weeks ago I mentioned the growing support for some kind jobs tax credit, and now it looks like the Economic Policy Institute has come up with a template for the actual policy -- two, in fact. The proposal promises to create 2.8 million jobs in 2010 with a 15 percent refund of the wages of new workers, and 2.3 million in 2011 with a 10 percent refund of the wages of new workers before the credit is phased out. It will also, EPI says, give a temporary advantage to entrepeneurs looking to get a new business off the ground during the recession. This seems like smart policy, but the key is making sure it is temporary so that the government doesn't end up subsidizing workers for years. However, considering the amount of money the government has spent subsidizing various markets, from housing to student loans to securities trading, it's time for the government to subsidize the labor market as well. It'll cost $27 billion over those two years -- not much in bailout world -- "but half of these costs would likely be recouped in lower spending on unemployment insurance, Medicaid spending, and other safety net programs." That would be nice.
-- Tim Fernholz
