Creating Jobs Without Using Money

by Francis P. Koster, Ed.D.

According to the feds, around 1 in 10 potential workers in America are unable to find paid work.ⁱThis contributes to rising crime, domestic violence, and an increase in mental health issues. 

Because of declining tax revenues, badly needed government social services programs have been cut. Private donations to organizations helping the less fortunate have also dropped over the past few years.ⁱⁱThe net effect is that we have more people needing help and fewer charity dollars available. These are hard times.

Fortunately, there is a creative non-cash based solution that can be used locally to put people to work. It is a barter system, trading work for goods, or work for work, with no cash involved. And thanks to new computer programs, it can be implemented locally.

It is possible to jump start a local economy without using United States currency.

To make the system work, an organization sets up a computer program that does a "Barter Exchange". This works like Craigslist, or Matchmaker websites. It connects unemployed willing workers to folks or organizations who need work done, but don't have any money to pay the worker. Instead of receiving cash, the worker is compensated by receiving either a certificate with value (could be a "gift card"), or items of value such as food, or a night of shelter.

They can take this credit and spend it, just like cash, with other members of the barter exchange who have committed to accept barter, and have posted goods or services they will trade.

Imagine a soup kitchen charity needing surplus vegetables picked up at a supermarket each Monday evening. They are matched with an unemployed person who has a refrigerated truck. The charity would get the food, the grocery would get a tax deduction for making a charitable gift, and the truck driver would get a redeemable coupon that they trade for other things - like furniture at Goodwill, or food at the local food bank. The driver gets their self-esteem back. And tons of food would feed people, and not go in the landfill.

Using barter, instead of having each charity recipient become a remover of wealth from the charity system, they become a contributor to it - the pool of help available to the community actually expands while the for- profit company increases its bottom line!

You can have direct trades - "I will take Mrs. Jones to the doctor in exchange for free groceries from the food bank" or the trade can involve creation of credits which are portable - "I get 4 credits for taking Mrs. Jones to the doctor, which I can apply toward having Mr. Smith (another labor exchange member) coming to fix my rotten front steps". The only requirement is that everyone involved be a member of the system, and agree in advance to play by the rules.

There are hundreds of systems like this working in the United States right now. Some involve exchanges between for profit organizations like motels which can trade empty rooms with charities, thus creating emergency overnight shelter for battered women.

One good example of this is a charity called Resources for Human Development, in its Philadelphia, Pennsylvania location. Last year they bartered one and a half million dollars worth of goods and services without a penny of U.S. currency changing hands. The charity got labor it needed, the charity recipients who could work did so, the barter workers got value in exchange for their labor, and the community safety net expanded. You can learn more about this at www.equaldollars.org.ⁱⁱⁱ

The same barter technique has been used for years by the for-profit sector. According to the International Reciprocal Trade Association, annual barter transactions exceeded 12 billion dollars in cash value in 2009/2010.^iv

The Internal Revenue Service recognizes barter exchanges as a legitimate economic activity, and has simple rules in place, just as if the workers were paid in cash.^v Surprisingly, barter income can result in a family becoming eligible for an Earned Income Tax Credit.^viThe tax reporting requirements are easily managed by the computer systems.

In these highly politicized times when agreeable solutions are hard to find, barter does not require government action.

It is easy to become overwhelmed by all the issues facing our society today, but we do not need to be helpless or hopeless. It just takes a willingness to learn from others success, leadership, and some internal stamina to try something new. Are you willing to create a better future for all?

i Bureau of Labor Statistics March 9 2012 Economic News Release Table A-15