Employ­ment hasn’t been recov­er­ing at a high enough rate sat­isfy any­one. Return to full employ­ment will likely take more than a few years. Many have been com­plain­ing about this, so here are a few rad­i­cal ideas to cre­ate jobs. I don’t think there’s any ques­tion they’d work for that pur­pose. But I can antic­i­pate a lot of opposition.

  1. Require that busi­nesses shorten their aver­age work week by a min­i­mum of five hours, set­ting the Amer­i­can “stan­dard” work week to 35 hours. Pro­vide tax incen­tives for going beyond that, by as much as an addi­tional five hours, low­er­ing the work week to 30 hours.
  2. Remove the age require­ment for Medicare, to allow all Amer­i­cans to get on a single-​​payer health care sys­tem, and allow employ­ers to drop all insur­ance coverage.
  3. Lower the retire­ment age for Social Secu­rity to 60. Encour­age Amer­i­cans to retire earlier.

It may not be obvi­ous how these mea­sures could cre­ate jobs. They could lead to full employ­ment, vir­tu­ally overnight, give a jolt to the econ­omy such as Amer­ica has never seen, make us all health­ier, and give us a lot more free time. Let me explain.

Reduc­ing the length of the work week would not reduce the num­ber of goods and ser­vices that Amer­i­can com­pa­nies need to pro­duce. The same num­ber of Amer­i­cans would need the same num­ber of meals and cars and iPods. But if you reduce the num­ber of hours that each per­son works, in order to get the same amount of work, you have to increase the num­ber of peo­ple. That means more jobs.

Going from a 40-​​hour work week to a 35-​​hour work week means you lose five hours of work for every employee. That means for every seven employ­ees, you lose 35 hours of work, and have to hire another 35-​​hour employee. Right away, we need one addi­tional for worker for every seven who are cur­rently work­ing. That’s an increase of 1/​7, or a lit­tle over 14 percent.

Cur­rently, accord­ing to the Bureau of Labor Sta­tis­tics, there are approx­i­mately 142,415,000 peo­ple employed. An increase of 14 per­cent means nearly twenty mil­lion new jobs. And they won’t have to wait, like wait­ing for sup­pos­edly “shovel-​​ready” projects. The demand exists right now, because the work is already there. Peo­ple are already needed to do it.

You might ask, How do we pay for that? How can cor­po­ra­tions and small busi­nesses afford to pay for one new employee for every seven they cur­rently have? That’s easy. With an increase of 14 per­cent in the num­ber of peo­ple actu­ally employed — earn­ing money, spend­ing money, want­ing stuff — demand for goods and ser­vices will imme­di­ately increase. Maybe not by the full 14 per­cent, but by a great deal. That means the sales of most busi­nesses would also increase. Income tax rev­enues and sales tax rev­enues would increase. So would rev­enues from most other taxes. It’s wind­fall prof­its for everyone.

The gov­ern­ment can, and should, pro­vide tax incen­tives for this, cov­er­ing most of the costs to employ­ers for adding to their work­force, includ­ing the excess cost (or a por­tion of it) of keep­ing all exist­ing employ­ees at their same income lev­els, even with reduced hours. (Yes, you deficit hawks, that might lead to tem­po­rary increases in the deficit. Too bad. It’s called, “invest­ment.” You’re sup­posed to like it when we run gov­ern­ment like a business.)

In other words, salaried employee should stay at the same salary, and hourly employ­ees should get an imme­di­ate 14 per­cent hourly raise, thus keep­ing everyone’s take-​​home pay what it is now. This also nec­es­sar­ily means increas­ing the min­i­mum wage, by at least that same 14 per­cent. (Every time a min­i­mum wage increase is pro­posed, Repub­li­cans scream that it will increase unem­ploy­ment. Every time the min­i­mum wage increases, unem­ploy­ment drops — because it means con­sumers have more money, and they spend it, thus increas­ing demand. All economies are demand-​​driven.)

In addi­tion to tax cred­its and tax incen­tives to reduce the work week and hire more work­ers, the feds can do one other enor­mous thing to lower costs to employ­ers — imple­ment Medicare For All, the job-​​creating single-​​payer sys­tem Amer­ica so des­per­ately needs. One of the biggest employ­ment costs to employ­ers is health insur­ance. This is also one of the biggest rea­sons Amer­i­can com­pa­nies find it dif­fi­cult to com­pete in the global mar­ket — com­pa­nies in other indus­tri­al­ized nations don’t have this expense. No other nation on Earth would even con­sider giv­ing up the health­care sys­tem they have, and sub­sti­tut­ing the ridicu­lous Amer­i­can sys­tem. There’s a rea­son no one copies us.

A job-​​creating single-​​payer health care sys­tem removes one of the biggest bur­dens on employ­ers. That alone could be expected to cre­ate mil­lions of new jobs, lower costs, encour­age entre­pre­neur­ship on a mas­sive scale, and make Amer­i­can prod­ucts once more com­pet­i­tive over­seas.  The prof­its of Amer­i­can com­pa­nies would increase, demand would increase, sales would increase, employ­ment would increase, and tax rev­enues would increase through vastly expanded eco­nomic activ­ity. It’s another win-​​win for the Amer­i­can peo­ple and for Amer­i­can jobs.

The third leg of my pre­scrip­tion is to lower the retire­ment age to 60 for all Amer­i­cans. Older work­ers are the most expen­sive kind of work­ers for Amer­i­can com­pa­nies. They have the high­est incomes, the high­est health care costs, the high­est level of addi­tional ben­e­fits (such as accu­mu­lated vaca­tion time). By low­er­ing the retire­ment age, we are free­ing up more jobs which need to be filled — and fill­ing them with younger, lower-​​cost work­ers. This is an enor­mous win for employ­ers (many of whom actively force work­ers into early retire­ment already for pre­cisely these rea­sons). Fir­ing every­one over 60 might be the best thing that ever hap­pened to America.

How do we pay for that? Easy enough. Remove the cap on FICA pay­roll taxes. Medicare and Social Secu­rity are both paid for through pay­roll taxes, but income over about $106,000 is cur­rently not sub­ject to the tax. Remov­ing the cap will nearly keep both of these pro­grams sol­vent for­ever, even with expanded ben­e­fits. Any short­fall can eas­ily be made up by tak­ing the money Amer­i­cans cur­rently spend on heath care (mostly through insur­ance poli­cies arranged by their employ­ers) and fun­nel­ing that money — that same money, no addi­tional pay­ments — into Medicare. We’re already spend­ing the money. We need to spend it more wisely, chan­nel­ing it into a job-​​creating single-​​payer sys­tem instead of the hodge­podge of inef­fi­cient sys­tems we have now.

With Medicare and Social Secu­rity altered to pro­vide a safety net for older Amer­i­cans, early retire­ment becomes a com­fort­able and attrac­tive propo­si­tion. With more free time — and at a younger, and there­fore, health­ier age — we can expect higher rates of con­sump­tion (more vaca­tions at the Grand Canyon, for instance), which means higher demand for goods and ser­vices, thus still more eco­nomic activ­ity, mean­ing higher prof­its for every­one. And more jobs. With more free time and with­out the bur­den of health care wor­ries, we’d expect many of these active expe­ri­enced peo­ple to cre­ate more small busi­nesses, thus employ­ing still more peo­ple and gen­er­at­ing still more goods and ser­vices, more tax rev­enue, more innovation.

These three steps — a shorter work week with incen­tives to keep pay where it is and to hire more work­ers, job-​​creating uni­ver­sal single-​​payer health care, and a lower retire­ment age — would lead to an explo­sion of eco­nomic activ­ity, cre­ativ­ity, con­sumer demand, GDP growth, and inno­va­tion, an incred­i­ble boost to the tourism indus­tries, and improved health care for all Amer­i­cans. It would par­tic­u­larly increase employ­ment among younger work­ers, who have been par­tic­u­larly hard-​​hit by the Great Repub­li­can Recession.

Has such a rad­i­cal pre­scrip­tion ever been tried? Oh, yes. This basi­cally is how Ger­many has oper­ated for the last forty years — a shorter work week (with much more gen­er­ous vaca­tion ben­e­fits than Amer­i­cans have, I might add), uni­ver­sal health care, and a lower retire­ment age. It’s why Ger­many weath­ered the Great Reces­sion far bet­ter than any other indus­tri­al­ized nation. France used a sim­i­lar pre­scrip­tion until Sarkozy came along — who pretty much repealed it, lead­ing to the eco­nomic prob­lems France is cur­rently suf­fer­ing, thus lead­ing now to a new Social­ist gov­ern­ment promis­ing to return to these pro-​​growth, pro-​​employment policies.

Is Amer­ica ready for such a rad­i­cal pro­posal? I doubt it. We’re too tied to the idea that work­ers gotta work harder, longer, and be grate­ful for what­ever scraps are thrown to them in the way of ever-​​worsening ben­e­fits (like unem­ploy­ment insur­ance or health care) that they already paid for. We’re too mar­ried to the idea that only the rich­est among us get free time, and that wealth trick­les down from on high, instead of being the result of eco­nomic activ­ity gen­er­ated by con­sumer demand (which is the truth of it).

It really is time for Amer­ica to move into the twen­ti­eth cen­tury. Or is that too rad­i­cal a proposal?

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