1. Chapter 15: Employment Policies

2. Increasing Demand PolicyExamples, Dates, Targets General Fiscal PoliciesTax Cuts Non-targeted increases in government spending General monetary policiesLowering the discount rate Government buys bonds

3. Increase the demand for low income workers and welfare recipients PolicyExamples, Dates, Targets Employer tax credit TJTC, 1978-1994, disadvantaged youth, ex- convicts, veterans, welfare recipients (40% of first $6K) Work Opportunity Tax Credit, 1996-97, welfare recipients (40% of first $6K Welfare-to-Work Tax Credit, 1997-present. Focus on long- term welfare recipients (first year: 35% on first $10K; second year: 50%)

4. Increase the demand for low income workers and welfare recipients PolicyExamples, Dates, Targets Public employment programs Civilian Conservation Corp, 1936, unemployed workers CETA, 1974-1983, low income and minority workers and youth JTPA, 1982, Youth Workfare under JOBS, 1989-1996, AFDC recipients

5. Supply Side Policies PolicyExamples, Dates, Targets Teach skills that match job openings: Training Programs MDTA,1962, displaced and unemployed workers CETA, 1974-1982, low income and minority workers and disadvantaged youth (max yr, 1981: 4 mil., $8 bil) JTPA, 1982-2000, dislocated and disadvantaged workers (max yr:.5 mil, $1.5 bil) Workforce Investment System, 2000-present—serves displaced homemakers as well

6. Supply Side Policies PolicyExamples, Dates, Targets Mandate Labor Force Participation WIN, 1968-1989, AFDC recipients, youngest child >6 yr.) (14% participation) JOBS, 1989-1996, AFDC recipients (youngest child >3 yr.) TANF, 1996-present, welfare recipients (more emphasis on experience than training) (youngest child >60 days

7. Supply Side Policies PolicyExamples, Dates, Targets Increase Incentives to Work Employee Credits EITC, 1975-present Raise Minimum Wage Last raised in July, 2008

8. General Problems PSE jobs are “make work” that teaches few skills. CETA and JTPA have very modest impact on earning (not cost effective) CETA, JTPA, and WIS cream and do not adequately help the neediest Employment programs are expensive and therefore inadequately funded. Low percentages of the target population actually participate. Information gaps hinder placements.