NCPA - National Center for Policy Analysis


November 11, 2005

Federal policymakers are considering many proposals to assist the hundreds of thousands of workers displaced by the recent Gulf Coast hurricanes. Many have merit, especially those that utilize market forces by getting government bureaucracy and regulations out of the way, say Tim Kane and David B. Muhlhausen of the Heritage Foundation.

Congress should avoid policies that delay workers' return to work and exacerbate unemployment, say Kane and Muhlhausen. For example:

  • Congress should begin by securing stable homes for evacuees in real communities, not concentrate them in mobile home camps; there are no jobs in artificial communities because there is no market either for goods or for the employment behind provision of those goods.
  • Worker Recovery Accounts (WRAs) could be failed job-training programs in new packaging; most displaced workers simply need a place to work, not new skills or redundant training.
  • If WRAs are simply added to the existing Unemployment Insurance system, UI will continue to encourage workers to stay unemployed, while the new system will encourage them to become unemployed.

Housing vouchers would empower individuals to live in homes that are already on the market. Indeed, the location of housing is the foundation upon which individuals will base their employment decisions, say Kane and Mahlhausen.

Additionally, the government's role in job creation is to provide a stable environment of physical security, property protection and law enforcement. Government becomes a hindrance to private-sector job creation when it becomes a direct employer or if it overextends labor rules in such a way that stifles private sector activity, they say.

Source: Tim Kane and David B. Muhlhausen, "Should Federal Labor Policy Be Any Different After the 2005 Hurricane Season?" Heritage Foundation, Backgrounder No. 1893, November 4, 2005.


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