Now that the President has delivered his jobs proposal and the pundits have breathlessly discussed its pros and cons, the American public will see it for what it is— old approaches with a new label. I have a different suggestion, which utilizes incentives (something I know about in providing deferred compensation plans). We need to incentivize companies to provide training for 21st century jobs.
Think about the last time you did not use FedEx as a verb, that you used a phone to talk and not text or waited for the drug store to develop your photographs. We are in a very fast-moving period of our lives and those jobs that are being lost are jobs of the past and not the future. People need to be re-educated to address current and future technologies and they need to be paid while training.
So how do we do this? Herein lies my modest proposal. According to several reports, American companies have more than $1 trillion in cash outside of the United States. What if a one-time opportunity is offered to repatriate those funds to the U.S., subject to only a 10-percent tax rate. The tax will generate $100 billion, which will be used to further my proposal. Those companies that take advantage of this opportunity must agree to apply 15 percent of the after-tax funds to hire people into a training and internship program so that the unemployed can learn new skills that will result in full-time employment. But during the training how will the participants be paid? Using the $100 billion in tax receipts the U.S. could provide to the participating companies a dollar-for-dollar match for the costs of training and paying the trainees. This would result in each participant receiving a stipend while learning and thus not having to draw unemployment.
So what has my proposal accomplished? Cash that can be used as sorely needed capital is repatriated, many of the unemployed and under-employed learn new job skills that will create high-paying jobs resulting in more tax revenues; there is less money drawn from unemployment insurance, the U.S. does not have to spend more than what it receives from the tax on the corporate funds, and I haven’t interrupted Thursday Night Football. Not a bad result.
*With apology to Jonathan Swift
Michael G. Goldstein is president and CEO of Summit Alliance Executive Benefits in Newport Beach, Calif.