Friday, August 20, 2010

Require a return on investment from unemployment

A community can’t afford to make an investment and not expect a return. Sometimes communities make investments for direct economic return. They encourage a company to locate in the community with tax breaks because it brings in jobs. The return on investment from the increase in tax revenue from the income created can be calculated.

Sometimes, a community makes an investment knowing there will not be a direct economic return. A park in the center of town makes the living space much more pleasant. It may have economic value in the rise in housing prices, but many will not benefit from it because they will never sell their home.

In both cases, there is a expectation of a return on investment.

But, the investment a community makes in unemployment and welfare has little expectation of return. Part of that is because of the current system is a compromise between those that want to continue it and those that would like to end it. Some money is provided to help individuals and families, but not enough to have any real effect on solving the problems.

The reality is we need to invest more in unemployment and welfare. That would enable the community to expect much more in return and not just wait for things to fix themselves.

Consider; individuals are expected to live a law abiding life. But, some don’t. If we just asked them to stop committing the crime, nothing would happen. But, if we threaten them with punishment and carry out those threats when they commit a crime, it will reduce crime.

If we give individuals that are unemployed little money and ask them do a few things they won’t if there are no sanctions. But, if we provide enough money for them to make real change in their life and hold them accountable to it, most will.

Let’s make that change.

Make a sizable investment in unemployed individuals. Provide enough income to take care of some of their concerns like keeping up with the house payments, provide health care, pay the bills and provide nourishing food. This would enable them to devote their attention to improving their lives.

At first, they would be given enough time to solve their problems on their own. If they are not able to, then assign them a manager that will both guide them and hold them accountable. Make an evaluation of their life and skills. Find markets that can employ them. Train them for their new jobs. Help them move if necessary to those markets. Now here is the catch, if the unemployed individual doesn’t do everything to help themselves while the community is making the investment, drop them from the program.

The investment needed and the sanctions for not taking full advantage of the program need to be worked out. It was not the purpose of this post to provide all the details – perhaps at a later date, one detail at a time. It is meant to examine the way we invest in the individuals that live in our community and what the expectation of return should be.

We formed communities because there is a benefit in living with others that will help in times of need. If we don’t receive any help, then why are we in a community? In reverse, if the individual that is asking for the help doesn’t help themselves in equal proportions (if not more) then they haven’t earned the community’s help.


Wednesday, August 18, 2010

Invest more in unemployment and welfare

The value of an investment is based on the return. If little is invested with little expectation of return, that is what will happen. But, if a larger investment is made with expectations of a larger return, it will be there. If the return isn’t, investments will be made elsewhere.

Right now we are investing little in unemployment and welfare. With that little investment we are asking little in return. Both are suppose to be used to get people through a difficult time. Perhaps the economy is in a downturn and companies understandably need to layoff some workers. It might be a family tragedy that means the primary wage earner is injured, unable to return to work or has died. Many more situations may exist that demands help from the community.

To those individuals and parties that are market driven, pro-business side of the equation, there is a belief that there should be no need for unemployment and welfare. They believe that individuals should save more of their income for economic downturns or they should continue to retrain for future jobs. The reasoning in the perfect world is sound.

On the other side of the equation, those that may focus entirely on the needs of workers and families, believe in something different. They believe the individual has little or no control over events and would help for as long as the economy takes to come back. If the individual truly had little control, evolution would not have been so kind to our species.

The answer in the Responsible Community is taking the benefits of both and addressing the downside of both.

That is for the next blog post.