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If you're looking for a job, the best asset at your disposal is who you know. Your personal network of friends, families, alumni, and past work associates is extraordinarily valuable. Those are the people you turn to for your job leads, career advice, and sometimes even start-up funding. Most careers grow out of personal connections. But once you get the career you want, your personal network instantly becomes a semi-stranded asset. It's nice to have it waiting for you if you need it later, but during the dormant time it does you little good. My idea for today involves a way to monetize your personal network and reduce unemployment at the same time.

My key assumption is that the long-term unemployed have relatively ineffective personal networks. This is obviously a gross generalization, but I think it is close enough for my purposes. Stated simply, rich people usually have valuable friends (in economic terms) and unemployed people often don't.

Suppose the federal government creates a plan in which any citizen in a high tax bracket can volunteer to mentor a person who has been unemployed for one year or more. To start, the government would randomly assign a local unemployed person to each mentor. The deal would be that if the mentor can find a job for the unemployed person, the mentor's own taxes would be reduced by the amount of taxes paid by the newly hired person over five years. I'll include payroll taxes in the calculation because many employed people don't pay federal income taxes. Serial mentoring would be allowed too, so one mentor could help find work for multiple unemployed people, one at a time.

We want to keep the government bureaucracy to a minimum, and keep freedom to a maximum, so let's assume the entire program is optional for all participants, and the mentors fill out simple tax forms once a year that list the Social Security number of the unemployed person, a log of what steps were taken to help him/her find work, and the date of employment. It's about the same amount of paperwork you might do to claim a home office deduction. And it would carry the same penalties for lying to the IRS. All the government needs is the Social Security numbers of both the mentor and the newly employed person in order to keep track of taxes paid and tax credits given.

In theory, getting more people working will stimulate the economy enough to compensate the national treasury many times over for the tax benefits given to the mentors. The newly employed will be buying more goods and services and they won't be a drain on unemployment insurance and social services. Everyone wins.

To make this plan work - and this is probably the most important part - you also need some sort of online system where mentors can "trade" their randomly assigned unemployed people with mentors more suited for the task. For example, one mentor might have better contacts in the technology industry and another mentor might have better contacts in the construction industry. The government should also make it legal for mentors to trade unemployed people for cash, the same way major league baseball players are traded. If I'm a mentor with extraordinary contacts in the technology field, I might be willing to buy from another mentor an unemployed person who has technology skills. I'll make my money back plus more through tax credits.

Let's also assume that mentors have no restrictions on how they can prepare their unemployed people for work. For example, a mentor might find a training program and offer to fund it personally if the potential tax credits down the road are tempting enough. Another mentor might fly an unemployed person to North Dakota for an interview in the oil industry. A generous mentor might even cosign on an apartment lease and pay the first month's rent to make relocation feasible for the unemployed. For the mentor, anything that is legal is fair game. I think you'd see a lot of creative schemes emerge.

Obviously this concept needs a lot of work to tweak the math, plug loopholes, deal with exceptions, and reduce the potential for cheating. All tax policies are imperfect, and this would be no exception. The best you can hope for is that the benefits outweigh the new problems.

A major assumption at the core of this idea is that enough jobs exist to accommodate far more of the unemployed if only we had a better way to match candidates with openings. If you look only at published job openings, you might think the real problem is that the unemployed have the wrong skills. That's certainly an important part of the larger story. But I think you could still take a big bite out of unemployment by doing a better job matching candidates with openings. Keep in mind that your personal network has invisible, i.e. not published, openings that are exactly the sort you would fill if you were looking for a job yourself. The job you get is usually the job that no one else knew about.

You may now shred this idea.

[Note to Gawker, Salon, Huffington Post, and Jezebel: The best way to take this idea out of context and turn it into fake news is to claim I am advocating that rich people should buy and sell the unemployed just like modern day slave traders.]
 
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Jul 10, 2012
Somebody said "The upper classes create jobs". No, they don't. This is a myth. They actually steal more jobs than they create, for instance by off-shoring the whole of industry (which once gave full employment) to the Far East.

They also prevent social ownership of means of production from ever being realistic. If I try to team up with my buddies to to start a factory, we would have to compete against the factories of the upper classes. This scheme, nipped in the bud by the upper classes, would improve working conditions and incentive to work by many orders of magnitude, and could easily generate full employment.

I suspect the main problem with Scott's "mentor" scheme is that charlatans don't want the outside world to be privy to their scumbaggery. Birds of a feather flock together. Did the Wizard of Oz do mentoring?
 
 
-15 Rank Up Rank Down
Jul 10, 2012
Yes, good post. Most of these scumbag businessmen libertarians are just obviously taking excessive credit for the pure accidental, blind fortuity of happening knowing the right people at the right time.

There might be a few highly creative people like Scott Adams who are capable of creating something from nothing. Scumbag businessmen libertarians are not that talented. They just happen to know businessy people. Or they have the right personal attributes (like being !$%*!$%*!$%* mediocrities with inflated egos and nice hair) that attracts businessy people. Such businessy people give them the right ideas and get them started on the businessy path.
 
 
Jul 10, 2012
Interesting, with a lot of the same strengths and weaknesses of privatizing education. For schools, it's the ability to pick and choose bright kids with supportive families. For mentors, there's a powerful incentive to pick the easy ones -- say, college graduates whose student loan debt qualifies them as poor; or trained specialists with some easily resolved (with money) obstacle, like geographic distance from willing employers; or even friends and relatives who can be made poor on paper. And as Whtllnew pointed out, persons an employer was about to hire anyway. Imagine if McDonalds or Starbucks incorporated the mentor paperwork with their job applications, the way publishers once placed a "buy all rights" blurb on checks where freelancers had to sign to endorse them. The real trick would be preventing mentors from selecting or accepting ONLY the slam dunks and/or kith & kin who were in the boat already.

Maybe if there was a way to adapt this to incorporate trade schools, too many of which seem to enroll anybody, collect the cash (either from desperate individuals, the government, or both), and wash their hands the moment they hand out the worthless diplomas. These institutions are already attracting mostly motivated jobless; imagine making the schools more responsible (for the quality of actual graduates, at the very least) and a screening mechanism for mentors. Naturally, the schools producing the most employable grads would attract the most active mentors (either out of profit motive or an interest in that school's field). Mentors might even find it profitable to underwrite students at a particularly successful school.
 
 
+8 Rank Up Rank Down
Jul 10, 2012
The "Who-you-know" would work for the person in the know only - it would stop working the moment we stretch it beyond that.

I may help a friend because I know his strengths personally, or even as a favor - but I definitely won't do it for an unknown person coming on his recommendation, specially since I know his motive behind it (the tax break).
 
 
Jul 10, 2012
Rich people wouldn't find it worth their while to sift through the hordes of the unemployable. A lot of the chronically unemployed are in that situation because they lack basic skills. I'm not even talking about computer or technical skills. I mean the basic social skills, self control, and personal hygiene required to hold down a job.

I have spent years in factories watching a constant stream of losers come and go. Most companies in America are so afraid of getting sued that all a person has to do to keep a job is show up on time and refrain from committing any crimes (assault, drug use, etc.) at the workplace. You might be surprised how many people can't even rise up to that standard.
 
 
+2 Rank Up Rank Down
Jul 9, 2012
"Suppose the federal government creates a plan..."

I stopped reading right there.
 
 
+19 Rank Up Rank Down
Jul 9, 2012
The reason that our system has worked very well, up until very recently, is because we haven't had to necessarily resort to cronyism to find work. Many European countries operate more on how to curry favor with an important /useful person rather than any type of meritocracy. To the detriment of the dynamism of their economies.

Also, many countries without a strong & clear rule of law result in people only trusting relatives & close friends, limiting their ability to grow their companies/economies.

We would be better off trying to find our way back to a meritorious and law based economy rather than accept this type of defeat.
 
 
Jul 9, 2012
That same thought occurred to me too speaky2k, but decided not to include it in my list of problems because theoretically that same problem could apply to employers. You have to entrust your SSN to someone to get a job and its not unreasonable to do so to someone you meet in person.
 
 
Jul 9, 2012
The only thing I could see fundamentally wrong with what you are proposing is the Social Security number sharing. I think it would be better if a job seeker would have a "labor code" which he would give to the mentor, who would enter that information. That way there is no identity theft issues to worry about. That and the labor code could only be used once, so that after a trade, only one of the mentors would be able to claim that job seeker.
 
 
Jul 9, 2012
You want me to shred this idea? Okay, here I go.

Problem #1: What is to stop someone from 'mentoring' someone he was about to hire anyway, thus getting a sweet tax free bonus?

Problem #2: Why stop there? Why not 'mentor' a hundred people with minimal effort (if you're keeping the bureaucracy to a minimum you're also keeping the policing of this system to a minimum) and then collect on the ninety or so that get jobs?

Problem #3: Poor connections are often not the only problem long term unemployed have. A mentors heart can be in the right place and still discover the person he's mentoring isn't worth his very valuable time, even if it means a tax break.

Problem #4: And for that matter just how many rich people do you think will want to deal with people who, from their point of view, must appear to be losers? Correct me if Im wrong, Scott, but is not one of the points of being rich the ability to dodge unpleasant experiences like that? Making rough assumptions on human nature and the number of working rich (as opposed to idle rich, who aren't likely to have the kind of knowledge and connections we want for this plan) my generous guess would be maybe 100,000-200,000 rich people would sign on to this plan wholeheartedly. Result: if we're lucky a 0.1% uptick in the employment rate.
 
 
Jul 9, 2012
This is actually a pretty good idea. One of the often forgotten about benefit of the upper classes is they help create and provide jobs for everyone else. If you allowed them a way to capitalize on getting as many people employeed as possible in jobs they can keep for 5 years, that's a good thing.

1. You'd get instant savings in unemployment payments and food stamp claims
2. The number of people who'd need medicaid would decrease, saving the taxpayers money there.
3. If 25% of the people who got jobs were able to transfer their kids over to private schools or pay for their kids college that would mean either lowering the costs of public education or being able to spend more per child if the expenses stay the same.
4. Those people who got jobs would be able to get a new network of people so if they need to switch careers or something happens, they'd now know more people.
5. It fits with Christian beliefs: give a man a fish and he'll be hungry tomorrow, teach him to fish (get him into a good network) and he'll never be for want. Or if you've read Thoreau the best form of government (welfare) is the man who can govern himself (see to his own welfare).
6. It could diffuse class warfare: if the rich are seen to be getting people long lasting jobs, people will like them more.
7. More technological progress: the top 10% buying things like TVs and Ipads early on are why the rest of us can afford them now. This is turn could fuel more jobs.
 
 
+8 Rank Up Rank Down
Jul 9, 2012
Why does it need to be run by the government?
 
 
 
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