Attempts to reduce inequality wind up hurting the rich a little and everyone else more. If New York Mayor Bill de Blasio raises taxes on those earning $500,000 or more in order to fund universal preschool, as he promises, here's a prediction: The lot of the poor will not improve one iota. In fact, if de Blasio succeeds in making New York less hospitable to businesses and yes, wealthy individuals (note the exodus of wealth from France), there will be fewer jobs for the poor and middle class. Venezuela's Hugo Chavez focused on income inequality, too. How's that working out for the poor? (Hint: Don't try to get oil, flour or electricity in Caracas.)
This is not to say that government policy should not focus on jobs. Under Obama, the government has focused on making joblessness less painful. It's been sending checks -- through Medicaid, unemployment insurance and disability payments -- and congratulating itself on its compassion.
Republicans should be focused on policies that will put people back to work instead. Long-term unemployment -- defined as being without a job for six months or more -- has doubled under Obama's presidency. In addition to writing checks, the Obama administration now urges an increase in the minimum wage and defends the honor of the unemployed. ("They are not lazy," the president said, responding to an accusation no one made).
Long-term unemployment is devastating. The longer people have been without work, the less likely it becomes that they he will be hired. Time out of the workforce means atrophying skills, loss of self-esteem, depression and, of course, a declining standard of living. Strain, writing in National Affairs, proposes a number of reforms that could assist people in this situation. Providing information about job openings in other parts of the country might help, along with relocation grants. North Dakota's energy boom has created a labor shortage. Washington State needs agricultural workers. Massachusetts is hiring in the hospitality industry.
Instead of increasing the minimum wage, reducing the minimum wage for the long-term unemployed might encourage employers to take the risk of hiring them (62.6 percent of minimum wage workers receive a raise within one year, reports the Employment Policies Institute). This could be paired, Strain argues, with an expanded earned-income tax credit aimed at the long-term unemployed. The key goal is to put people back to work -- adding skills, building a resume, getting access to professional networks and reintegrating into the work world.
Democrats continue to focus on cushioning joblessness. Republicans should focus on helping people get back to work.
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