It's a plausible (temporary) solution, known as the "employer of last resort". It worked okay in the 1930s; even today, a lot of the national-parks infrastructure is stuff that was built in that era, because instead of just handing out welfare payments, the government hired people on short-term contracts instead. Same stimulus/welfare effect (people who can't find other work are paid for a few months), but the national parks got some useful work out of the deal too.
- They were forced (or tricked, or coerced) into working for private companies. We're talking about jobs in supermarkets and (the UK equivalent of) dollar stores.
- The taxpayer paid the wage (the same as jobseeker's allowance, I think). The private companies didn't pay anything.
- Companies could just sack their workers and enjoy the benefits of free labour.
So much for the minimum wage! How can minimum-wage workers compete with free labour? (Free from the company's perspective, that is.) And this was supposed to reduce unemployment?!
And anyway, if people are working, why aren't they getting minimum wage?
