Desperate to bring down the historically high unemployment rate of 9.7 percent, lawmakers of both parties are actually working together to craft a bill that would provide incentives for jobs creation. However, according to Timothy J. Bartik of the Economic Policy Institute, the current proposal would be highly inefficient – creating very few jobs at a relatively high cost.

The current proposal, crafted by Sens. Orrin Hatch (R-UT) and Chuck Schumer (D-NY), would provide a 6.2 percent tax credit awarded to businesses for new hires. If, at the end of the year, those employees are still with the company, it would be rewarded with a $1,000 tax credit.

The proposal is problematic for a number of reasons, according to Bartik. For one, the credit is applied to companies for new hires rather than net hires. Even in the midst of a steep recession, there are currently four million hires every month. Given that, it is likely that many companies will be awarded for keeping their payrolls at the same level or for hiring that would have occurred anyway.

Another potential problem is the fact that only those hired who have been unemployed for at least two months are eligible. That drastically shrinks the pool of potential hires and may lead many businesses to forgo the idea altogether. Many will take the tax credit if they happen to hire someone that fits that mold, but will not go out of their way to hire such an employee.

“Employers are happy to claim such credits if they happen to meet the credit’s rules, but they are reluctant to change their behavior in response to such targeted tax credits,” Bartik writes.

Finally the financial incentive for businesses is questionable, with little cash upfront and a meager tax break. It will, however, be extremely costly for taxpayers. According to Bartik, the plan would create up to 200,000 jobs. At a cost of $13 billion, that is $65,000 per job created. The worst part is that the plan will do little to dent the extremely high unemployment rate.

Baartik was not the only economist assailing the plan. Dean Baker, economist at the Center for Economic and Policy Research, slammed the plan as well, calling it “money for nothing.”

“If a 15-20 percent rise in the cost of labor does not reduce employment, then no one can believe that a 6.2 percent decline in the cost of labor (only for the rest of 2010) would increase employment. In other words, there is little reason to believe that the Schumer-Hatch tax credit would create any noticeable number of jobs,” he said.

Instead, he promotes a program based off of the quite successful work-sharing systems set up in Germany in the Netherlands. In both those places, companies are provided with tax credits in exchange for shortening a workers hours instead of firing them.

“We could do that here if we weren’t determined to waste money,” he writes at the Web site Talking Points Memo. “Anyhow, for now it looks like we have to throw out money in the garbage with Schumer-Hatch. Where are the deficit hawks when we need them?”

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