To fix it you need to adress the problem at the root: employees are too expensive because of all the tax laws involved, so businesses started to game the system

To fix it you need to adress the problem at the root: employees are too expensive because of all the tax laws involved, so businesses started to game the system by turning employees into contractors. Because of this the IRS had to develop a whole set of complicated rules to avoid this abuse. Solution: abolish all the taxation overhead for employees which was the problem in the first place. Result: Companies will be motivated to hire more people as employees again reducing the number of unemployed, at the same time there will be no worries about having actual contractors, since there will be no more draconian tax laws to begin with. This is just another example where an originally good idea(all the taxes on the employer which were supposed to help the employee) turned out to have disastrous consequences.