Government’s role in stopping job losses

It seems that every day that goes by, another large corporations or two announce that they’re laying off tens of thousands of workers. This process (cutting costs) is absolutely necessary to ensure that our businesses are viable and creditworthy. However, cutting workers isn’t the only option.

One avenue that has been largely ignored in this labor market is cutting salaries for a entire company’s workforce. Clearly, this would be negative for the workforce’s morale, but many employees would prefer a pay cut rather than risk being laid off. This is an option that MUST be put into practice in all cost-cutting efforts to stop the tsunami of layoffs.

Now, I’m not usually one for more government regulation, but I think the government should urge or potentially even require businesses to attempt to cut compensation before they reduce their headcount. Businesses should have an incentive (a tax incentive?) to do so.

Massive layoffs create a positive feedback loop that promotes recession. Layoffs need to be attacked immediately with a common sense solution. Unemployment is spiraling up and will soon be in double digits (it already is, depending on who you ask).

We can’t just spend our way to permanent jobs. We can surely create temporary ones with a massive infrastructure spend, but in the end, tax cuts have shown to create 3 times as much prosperity as government spending, so why attempt to spend public money it’s known that such an attempt is only a stopgap solution?