Public Service and Replacing Lost Jobs: Two For One Solution (Guest Voice)
Feb 10th, 2009 | 3 responses
So what should the government do now to try and boost employment? In this Guest Voice, TMV reader Marc Pascal, an independent business and management consultant in Phoenix, offers some specific ideas which include reinstituting the draft. Guest Voice posts do not necessarily reflect the opinion of TMV or its writers.
Public Service and Replacing Lost Jobs: Two For One Solution
by Marc Pascal
The Labor Department reported the U.S. economy employed almost 155 million people in the public and private sectors at the end of 2008. It also stated there were over 11 million without work, resulting in a 7.2% unemployment rate. Job losses continue to mount in 2009 and many expect that unemployment may rise above 10% by the end of this year.
Many experts argue that actual unemployment should also include the many individuals who (1) used up their unemployment benefits and are still not working, (2) gave up looking for work, (3) worked in positions without unemployment coverage and are not working now, and (4) are working in temporary or part-time positions well below their experience, education or skill levels. Adding these individuals, the official rate may be 50 to 100 percent higher, or actually 10 to 14.5 percent unemployment nationwide.
With around 20 million unemployed and under-employed people now, and if the economy continues to tank and shed jobs, the total number of Americans out of work by early 2010 may exceed 30 million. Things could get very ugly for the long-term prospects of recovery with so many people essentially not spending any money. The remaining employed people would also be scared of job losses and would reduce their spending even further. The vicious cycle would continue ever downward without significant governmental intervention.
After 9/11/01, many lamented the fact that Americans were ready but were not called to any public service. Two ongoing wars have shown the limits of Defense policy when there are not enough active troops or reservists to accomplish multiple military missions. In this downturn, many state governments are slashing their own programs and terminating many state employees and public school teachers to balance budgets. Donations to most non-profit entities have fallen so they cannot hire people to address many public needs.
This country should re-institute the draft, but in a modified form. Simultaneously it should encourage Americans to sign up for federally-funded public service positions.
The new draft would require all citizens to provide 2 years of public service sometime between their 18th and 30th birthdays. The first 8 weeks would consist of boot camp in one of the 4 branches of the military. However, most draftees would not continue in the Military. Instead, they would be assigned to various governmental and non-profit entities across the U.S. All draftees would be paid approximately $25,000 a year (about $500 a week gross) with all student loans during the 2 years held in abeyance without incurring interest charges. Their healthcare would all be covered under the Military or Medicare.
The idea of an 8-week-long boot camp is two-fold. It generally requires 6 weeks to establish any new habits. With millions of obese and inactive Americans, instituting 8 weeks of new eating and exercise regimes in boot camp would start to address this nationwide health problem. It is also important for a society with a constitutionally-protected right to bear arms to have its citizens fully educated in the safe and proper use of firearms.
Draftees could always re-enlist for additional 2-year terms at slightly higher annual salaries. Subsequent terms could reduce outstanding student loans by at least $5,000 each year of service. Those individuals who did not wish to provide the 2 years of public service could contribute $100,000 to the U.S. treasury and obtain a complete exemption.
Publicly-minded individuals, and those unemployed and under-employed over the age of thirty would be encouraged to join this public service program but for renewable 1-year periods. They also would be paid $25,000 annually and would be covered under Medicare. Their student loans would also be suspended while working in the program. Without a boot camp requirement, and having more work experience and education, the volunteers would have a greater choice in their governmental and non-profit assignments. They could also be placed within private enterprises that applied for and proved a financial need for such publicly-funded interns. For example, private enterprises with annual revenues under $1 million could request at least one but not more than 2 interns.
Each state already has a job assistance program associated with their unemployment operations. These state programs would become the principle clearinghouses for all public service jobs, along with the Federal Departments of Labor, Commerce, Interior, Transportation, and others designated by Congress. These 12 to 24 month public service jobs would essentially be opportunities for Americans to (1) retrain for new jobs through direct internships, (2) continue their educations while working at a minimal income to support themselves and their families, or (3) start a new business on the side, which would become their new source of income after they left public service.
It is much better to keep people working rather than languishing in unemployment, and not fully contributing to our society. The U.S. can little afford such an immense waste of human capital and brain power if it is to compete globally.
How much would this program cost? If 10 to 20 million people were both drafted and volunteered into this new public service program, the total cost would be around $300 to $600 billion per year. If our current national goals are to (1) quickly jump-start our worsening economy, (2) improve the readiness of our military, (3) encourage public service, (4) get people back to work, and (5) prepare our population to be competitive globally, then this proposal accomplishes all of these objectives.
Marc Pascal has J.D. and M.B.A. degrees from Case Western Reserve University in Cleveland, Ohio 20 years ago. He worked for many years as an in-house legal counsel for several large business enterprises and later started 4 new ventures with partners. He now lives in Phoenix with his wife and young song. He is an independent business and management consultant who provides consulting services to various privately-held business enterprises in the Phoenix area.
3 Responses to “Public Service and Replacing Lost Jobs: Two For One Solution (Guest Voice)”
Here's Sil's magic solution “Sil's Bill” if you like…for the creation of jobs. It is a bill that seeds the economy at its base, in the soil, the very bottom ranks. The Bill as it stands now is trying to sew seeds too far and wide, and too high in the air. The birds will get them all..
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For a period of a year or so, relieve existing homeowners of their mortgage interest…just carte blanche. Uncle Sam reimburses the banks this way, through the little people. Then, home values would stabilize, the bad paper would regain strength, banks would regain their financial strength and no longer fear making loans. Loans to small businesses would start up again, the economy would be stimulated creating new jobs. If they did nothing else in the Bill, this would be the magic bullet. Personally, for now, they should do nothing else but this one thing and funding for alternative energy refurbishing for our infrastructure. OK, so those two things would restore our economy and our national security. Leave money for the ballerinas and national parks for next month's Bills.
AND all that money saved monthly would, in fact, go to spending sprees which would create demand for things like, oh, I don't know, like NEW CARS, furniture, widgets, gadgets and food…all things that would further stimulate the economy and create more jobs, creating more of a tax base and kicking money back to Uncle Sam in the end. I want to buy a new truck, I need to buy a new truck for the business I'm trying to start. But I will take on neither burden if it means having to choose between those payments and keeping my land in these troubled times. There are millions upon millions making the same decisions today. That's why christmas '08 sucked and why christmas '09 will suck too…and all the months between. People are scared shtiless that they will lose their homes if they spend…they've seen it happen to their neighbor for crying out loud.
Both republicans and democrats would gain in this scenario. But the crucial hinge is that they must unclench their tightened fists and let the money go to subsidize mortgage payments for a year or so. And sharing money with the little people is like asking Satan to go take Mass at church. It is a visceral and reflexive revulsion with the rich (politicians).
The GOP would rather die than do this and this is what all the fighting is about since I've heard that a watered-down version of my mortgage-relief plan is in the Bill. The thing is they're going to fiscally die when the economy grinds to a halt, and they cannot even see that masses of poor people suddenly finding “found” money is their key to returned financial strength for themselves. I think if Obama just forced GOP Congressmen to sit down and go through a simple economic lecture and didn't let them out of the classroom until they thoroughly understood the concept of how the little guy having money to spend keeps them rich, we'd have a hella lot more support for this on both sides of the aisle and this Bill would already be Law by now.
Sil, your plan raises some objections but it's better than the “service” nonsense. (Note that many people would _not_ spend the money they were effectively given, but save it or use it to pay down debt instead.) I could easily do better than the guy and his “service” plan: we should hire citizens across the USA and form them into two groups, paying them to work as follows. The first group would stuff money or special federal certificates into bottles, cans, boxes, or other containers, and bury them all over the USA. The second group would (be paid to) search for these, dig them up, and retrieve them. Full employment!
The base pay of an E1 (private/seaman/airman) is $16,794 a year! If we ain't willing to pay volunteers 25K a year, what leads you to believe that we would pay draftees 25Ks a year?