An economic stimulus idea now gaining currency is a natural fit for the HR community.

The proposal is a payroll tax holiday, and it could be a win-win-win for workers, employers and the concept of a sustainable economy.

A payroll tax holiday would involve suspending for a year or two the federal taxes now levied to pay for Social Security and Medicare. These taxes are tied to wages, hit both employers and employees, and amount to more than 15 percent of much of the wages paid in America.

Because it’s a tax break, a payroll tax holiday appeals to Republicans. And as a means to put money in the hands of average workers, it appeals to Democrats.

Indeed, this approach to goosing the economy has found support among both camps. Senate Republican leader Mitch McConnell and the former Labor Secretary in the Clinton administration Robert Reich both have endorsed some version of the idea.

Recently, the lead commentary piece in The New Yorker magazine backed a payroll tax holiday, another signal that the notion is gaining momentum.

Fatter paychecks would put a smile on employees’ faces.

Pausing payroll taxes makes sense for employers, too. Businesses would have a lighter tax load and a happier workforce, which would get a de facto raise even amid salary cuts and pay freezes. Plus, workers are likely to spend more, stimulating the demand that companies desperately need these days.

Of course, there’s a catch to putting the kibosh on payroll taxes. It jeopardizes the funding for Social Security and Medicare.

But as Hendrik Hertzberg writes in The New Yorker, those programs are too well-entrenched to be imperiled by a payroll tax holiday. In fact, he calls for eliminating the payroll tax altogether and replacing it with taxes on things we as a society want to get away from, like pollution, oil imports and excessive consumption.

“This wouldn’t be just a tax adjustment,” Hertzberg writes. “It would be an environmental program, an anti-global-warming program, a youth-employment (and anti-crime) program, and an energy program.”

Advocacy group Get America Working! argues that shifting from payroll taxes to equivalent taxes on materials, energy and land ultimately “would create tens of millions of jobs, help the environment, and in all likelihood lead to a net tax reduction.”

Radically changing the tax structure is an ambitious goal. But as Hertzberg suggests, the economic crisis at hand opens the door to dramatic changes like eliminating what is essentially a tax on work.

HR folks could be among those saying this is change we can believe in.

President-elect Barack Obama and other political leaders have talked about taking swift action to get the economy back on course and aid struggling Americans. But missing from the debate is close attention to the skimpy, counter-productive U.S. safety net, even as hundreds of thousands of Americans are tumbling toward it.

The scale of that collective fall was made clear last week: Nearly a quarter-million payroll jobs were slashed in October, on top of some 284,000 jobs lost in September. The unemployment rate jumped from 6.1 percent in September to 6.5 percent in October. On Monday, a report from research group the Conference Board indicated employers will continue to “aggressively reduce payrolls well into 2009.”

On his campaign Web site, Obama calls for updating the federal Trade Adjustment Assistance system, which gives some workers dislocated by trade such benefits as income support and a health coverage tax credit. Obama would take steps such as extending TAA to service industries and creating flexible education accounts to help workers retrain.

These are worthy steps. But Obama’s plan appears to overlook the many folks who lose their job for reasons unrelated to global trade. Construction employment, for example, fell by 49,000 in October.

The push by Democrats in Congress to extend unemployment insurance benefits also is promising but only a partial solution.

In particular, U.S. political leaders seem oblivious to how paltry unemployment checks are. In California, for example, unemployment payments top out at $450 a week. That’s about half the income of someone earning annual wages of $46,700. It’s hard to get by on half your income. And in a way, the cap is tougher for someone used to making roughly $70,000—say a software programmer or accountant—who has to make ends meet with a mere third of their wages.

In the past decade, Americans have become more open to government helping the needy. But unemployment benefits in the U.S. still reflect a philosophy of rugged individualism, and they are among the most miserly in the developed world.

Apart from stingy payments, there are gaps in unemployment insurance coverage. And the federal law requiring firms to give advance notice of mass layoffs and plant closings is weak.

Obama is right to think about large-bore measures like a major public investment in a “clean energy” economy. But it would be a serious oversight to ignore America’s flimsy safety net.

The combination of sudden job losses and scant unemployment payments is sure to worsen the U.S. economy. People in such circumstances could well lose their homes, exacerbating the housing market collapse.

They would have little money to spend to boost the economy. And the stories of their hardship—retold through family, friends and the media—would further shake consumer confidence.

A more generous, taut safety net could help restore that confidence, underpin personal spending and lead to calmer, more productive employees.

Weaving a stronger net also would be humane and embody the sense of national solidarity that Obama has spoken about so eloquently.

If change is coming to America, shouldn’t it come to our economic safety net too?

As this Labor Day holiday approaches, American workers are simultaneously satisfied and uneasy about jobs and the economy.

Americans tend to feel OK about their own employment and economic situation, according to a report from the American Enterprise Institute for Public Policy Research. The conservative-leaning think tank cites an August Gallup survey finding that 48 percent of working Americans said they were completely satisfied with their jobs, and another 42 percent somewhat satisfied. Only 9 percent were dissatisfied with their jobs.

The institute report also cites a recent CBS News/New York Times poll, in which 15 percent of Americans described their household’s financial situation as very good, 56 percent fairly good, 20 percent fairly bad, and 8 percent very bad.

But there are chinks in the optimism. Health care is one. A Kaiser Family Foundation poll in April found slightly more than seven in 10 Americans worried about having to pay more for their health care or health insurance, according to the Institute study.

Pain at the pump is another cause for anxiety. Gas prices are causing financial hardship for three in four Americans according to Gallup’s July 2008 survey, the institute said. In 2000, only 40 percent of Americans said gas prices were causing them hardship.

And Americans see big problems with U.S. economy overall. A Rockefeller Foundation/Time survey released in July found that 52 percent of Americans believe the American dream is no longer attainable.

It also found that Americans believe the social contract they could once depend on has deteriorated and nearly eight in 10 want a new one.

The pessimism is not surprising given workplace trends over the past few decades. Job security has shrunk amid outsourcing and employers have pushed retirement risk onto workers. And the economic recovery of recent years has not felt great to many Americans.

A study from the liberal-leaning Economic Policy Institute examined the recession-recovery cycle that started in 2001 and found that for the first time on record, middle-class families are at or near the end of a recovery without ever having regained the ground they lost during the recession that preceded it. The study also said job growth has been slower and unemployment stints longer.

In addition, the unemployment rate rose to 5.7 percent in July, and payroll employment fell from January through July.

The overall portrait that emerges of America’s workers is one of resilience. But America’s workers are facing strains—which may be hurting productivity. And they’re voicing frustration. American employers are starting to take economic insecurity concerns seriously. But with support for international trade declining and consumer confidence low, are businesses doing enough?

The common-sense notion that economic stress dents worker productivity now has some research behind it.

In a Workforce Management story about the impact of high gas prices, writer Patrick J. Kiger cites findings from Florida State University management professor Wayne Hochwarter. Hochwarter discovered that workers stressed out about gas prices tended to be “less attentive on the job, less excited about their work, less passionate and conscientious and more tense.”

It will be interesting to see if employee disengagement caused by economic anxiety drags down official U.S. productivity figures, which have grown like crazy in recent years.

According to the Economic Policy Institute, after growing 1.4 percent per year since the mid-1970s, U.S. productivity jumped to 2.5 percent a year from 1995 to 2000, and then climbed to 3.1 percent a year from 2000 to 2005.

If productivity does drop this year, it might be a sign that the trend among U.S. businesses to treat employees with minimal loyalty and generosity has a cost.

That trend can be seen in shrinking benefits coverage and stagnant overall wages. The Economic Policy Institute found that between 2000 and 2004, real median family income fell by 3 percent, or about $1,600 in 2004 dollars. U.S. companies also have shown a willingness to outsource, offshore and lay off—even in good times.

I don’t think businesses have a responsibility to provide lifetime employment. But U.S. employers are discarding workers and otherwise squeezing them in a country with a skimpy safety net. And only recently have companies really gotten off the sidelines on the issue of economic insecurity in the U.S.

U.S. employees hold relatively positive attitudes toward their employers, according to a report published this week by HR software firm Kenexa. Kenexa studied organizational confidence, defined partly as employees having confidence in their organization’s future, believing their organization is managed effectively and feeling that the products/services are of high quality. The study of more than 16,000 workers from 12 countries found that employees in India have the highest overall level of organizational confidence, followed by those in the U.S., Russia and Brazil.

I wouldn’t be surprised, though, if we see an erosion of U.S. employees’ organizational confidence and their trust in their employers–which plays a serious role in business effectiveness. Gas prices that remain near $4 in many parts of the country seem to be acting as a tipping point. They may be prompting average workers to ask hard questions about why they haven’t been sharing more in the prosperity that fast productivity growth enables.

Skeptical, financially stressed-out workers may well translate into less-productive ones.

Consider this observation from Hochwarter about high gas prices: “[T]his is happening at a time when corporate profits are down and nobody is getting the 4 to 5 percent raises of the past, which might have helped them to keep up. Instead, they’re falling behind and struggling financially, and they’re thinking, “The company isn’t stepping up and helping me out. The days of me busting my butt for my employer are over.’ “

In this time of shrinking payrolls, the U.S. safety net is being tested. And it is failing, in ways that ultimately could hurt employers.

I’ve previously touched on skimpy unemployment payments in America as well as gaps in U.S. unemployment coverage. Yet another weakness in our web for catching displaced workers centers on notification of plant closures and layoffs.

There is a law designed to give workers 60 days’ warning when their employer shuts down a plant or lays off a large number of employees. Such advance notice can play a crucial role for both workers (who can prepare financially for unemployment and take steps to find new work) and local governments (which can reach out quickly to affected workers with job services).

But the Worker Adjustment and Retraining Notification (WARN) Act, passed in 1988, has proved to be fundamentally flawed and increasingly unhelpful to displaced employees.

In 1993, a federal study on WARN found that about half of the employers with 100 or more workers that closed or had a layoff in 1990 were not required to provide notice.

Ten years later, a similar federal study found that about one-quarter of the 8,350 plant closures and mass layoffs in 2001 appeared to be subject to WARN’s advance-notice requirements.

Not only does the law seem to be protecting fewer workers over time, but employers appear to violate the law frequently. The 2003 study found that employers provided notice for only about one-third of layoffs and closures that appeared subject to WARN requirements.

Among the explanations for these alarming statistics is employer confusion over the law.

Loopholes also play a key role. One provision in particular gives many employers a pass on WARN. Firms are exempt from WARN’s requirements if they lay off 50 to 499 full-time workers at a single site and the number laid off is less than one-third of the full-time workforce at that site.

That “one-third” rule may have made more sense during dramatic manufacturing job cuts of earlier decades. But in contemporary corporate restructurings, where 10 to 15 percent of the workforce often gets lopped off, the rule amounts to a major barrier to giving workers and governments a heads up.

It also should be said that employers in many instances are giving advance notice of layoffs. In fact, the 2003 federal study found employers provided 5,349 WARN notices, but there were only 1,974 plant closure and mass layoffs that appeared to meet the WARN criteria.

That discrepancy may result from the way the study relies on unemployment insurance claims to determine the number of mass layoff events, yet there’s evidence that fewer than half of unemployed people apply for unemployment insurance benefits.

As a result, it may be the case that employers are complying with the law more like 80 percent of the time. Still, a 20 percent rate of breaking the law on notification is a problem.

Last year, the Toledo Blade newspaper examined the WARN Act and concluded the law “is so full of loopholes and flaws that employers repeatedly skirt it with little or no penalty.” The newspaper also said that since WARN was passed, “employers have laid off tens of thousands of workers nationwide with little or no notice.”

There are plenty of ideas for fixing WARN. A bill to lengthen the notification period, broaden the number of businesses subject to WARN requirements and authorize the Department of Labor to enforce the law was introduced last year by Sens. Sherrod Brown, D-Ohio; Hillary Rodham Clinton, D-New York; and Barack Obama, D-Illinois, the presumptive Democratic presidential candidate.

Legitimate employer concerns surround proposed WARN reforms. Lowering the layoff threshold to as few as 25 employees could cause hardship to struggling small businesses.

And we ought to put at least as much if not more emphasis on helping workers rebound from job loss—steps such as better unemployment insurance benefits and retraining programs.

But ultimately, a sound safety net requires some measure of advance notice for major job cuts. Without that, worker transition to new employment—possibly with higher skills—is less than optimal. The level of economic insecurity felt by workers is heightened—which translates into lower consumer confidence. And there’s an effect on the already tattered fabric of trust between workers and employers.

It seems that fabric tore quite literally for Joe Aguiar last year.

A maintenance worker at a fabric company in Massachusetts, Aguiar was given just a day’s notice that his company was shutting its doors. Aguiar, who testified at a congressional hearing in May, said that after a 27-year career at Quaker Fabric he now works a few hours a week cleaning out factory buildings where he used to have a regular job.

“Employees should not be treated like the trash that I take from the empty Quaker factories and put out on the street,” he said in his written testimony.

If employees can be treated like garbage when they lose a job, it may be hard for them to develop the kind of loyalty and engagement that today’s employers seek the next time around.