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Get Hired, Get a Bonus

The easiest part of President Bush's economic plan that Democrats can support is an innovative idea to give the long-term unemployed cash to find a job - and allow them to keep the leftovers.

This idea of a government incentive for people to reenter the workforce has proven somewhat successful in a few state experiments, and now it's ready for a nationwide launch.

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Here's how Mr. Bush's two-year, $3.6 billion plan would work: First, states identify the jobless most likely to exhaust their unemployment benefits and offer each of them up to $3,000 to spend on job-search expenses. If they find a job within 13 weeks, they can keep the balance - 60 percent when they take the job, and 40 percent after six months of working.

The money could cover, for instance, training, transportation, child care, and relocation costs.

Illinois experimented with a bonus program nearly 20 years ago, when, like today, the labor market was slack and unemployment benefits were renewed. It offered just $500, if work was found in 11 weeks. The state saved over a week's worth of benefit payout per person.

Pennsylvania and Washington also tried a version of this idea, but the results were not as good. Still, people who used the program spent less time on unemployment than those who didn't. These states also tried various bonus levels. The higher the bonus, the less time an individual spent on unemployment insurance.

Congress should support this idea, though it may want to reconsider awarding so much of the bonus up front to avoid abuse. And if the plan starts, it should be watched to see if it deserves a life beyond two years.


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