Kevin Hassett’s Puzzling Solution to Joblessness: More Government Jobs

Originally Published in RealClearMarkets on 11/2/17.

Back in 2010, and amid a particularly difficult stretch for the economy, a conservative economist teamed up with lefty economist Dean Baker in support of what they referred to as “work sharing.” As the duo put it at the time, “Under a work-sharing program, firms are encouraged by government policy to spread a small amount of the pain across many workers. In a typical arrangement, a worker might see his weekly hours go down by 20%, and his salary go down by about 4%.”

The economists viewed “government policy” as necessary to make what vandalized basic economics possible, and in this case the proposed policy was government checks to make up for some of the earnings lost by sharing workers. Salary declines under the arrangement wouldn’t match reduced work hours thanks to others; in this case American taxpayers who would fund a policy idea that just screamed Washington, D.C., and its distance from reality.