Federal Reserve Examines Policy Options for Boosting Hiring
The Federal Reserve Bank of Minneapolis hosted an event to explore policy options for strengthening hiring when employers are reluctant to hire or labor market conditions are poor. Researchers and experts discussed potential benefits of labor demand programs, which target the employer side of the hiring equation.
Labor demand policies aim to help low-income individuals face employment obstacles such as education and skill gaps get hired. When these policies achieve their intended purpose, they can have positive effects on workers' families, kids' upbringing, and outcomes in the neighborhood.
Speakers discussed two major areas of labor demand policies: wage subsidies and public-hiring programs. Wage subsidies provide tax credits or direct payments to employers for hiring workers, while public-hiring programs create jobs through direct government employment.
An example of a wage subsidy program is the Minnesota Job Creation Fund, which provides eligible companies with financial incentives for creating or retaining high-paying jobs. An example of a public-hiring program is the Works Progress Administration (WPA), which created employment opportunities during the Great Depression and hired over 8.5 million Americans to complete public-works projects.