Monday, 6 February 2012

The Paradox of Unemployment

     I have always found something a little bit paradoxical about the whole issue of unemployment. When unemployment is high, we often say there's no work available. This is a problem, of course, because without work, the unemployed cannot earn the money needed for food, shelter, clothing and so forth. Therein lies the paradox, because it seems to me that if there are people without adequate food, clothing and shelter, there's work to be done: people to feed, clothe and shelter.

     So the problem isn't really unemployment itself; if there were really no work to be done, then we'd all have cause to celebrate, relax, engage in leisure activities and so forth. Rather, unemployment is a market problem; no one is willing or able to pay for the work that needs to be done. Or more generally, it's a distortion introduced by a market system that only measures value in certain ways.

    Let me be clear: I'm not condemning free market capitalism here. Any economic system involving more than one participant will introduce some kind of market distortion, and the overall gains in productivity and general welfare that accrue from free markets usually outweigh the costs of the distortions, often by a huge margin. But it does seem obvious that we can make our system better in various ways, some of which I expect I'll talk about in future posts.

     Talking about unemployment is further complicated, though, by some unconscious biases associated with the work ethic, which made perfect sense in a time when communities desperately needed every available hand to help out bringing in the harvest, threshing the grain, and with countless other tasks that needed to be done to ensure people wouldn't starve that winter. It was entirely appropriate to condemn idleness, when there was so much work to be done. And, to be sure, laziness is still properly considered a vice (of which I am dreadfully guilty).
     This attitude, condemning idleness as a moral failing, is rather misplaced in our current economy, and I suspect it gets in the way somewhat when we try to think about solutions, because it attaches a stigma to unemployment that is inconsistent with the economic reality. We just don't need everyone to help out with the harvest anymore to ensure that no one starves this winter. And as the enormous growth in the labour-efficiency of agriculture spreads to manufacturing and other industries, it's actually possible in principle to support the entire population at a reasonably high standard of living on the labour of a relatively small number of people. So the historical reason for condemning idleness is now irrelevant.
     That's not to say I believe a few people should support the rest of us, free of charge. That would be unfair to the few working, and bad for the freeloaders' psychological health as well. However, there's clearly something wrong when large numbers of people have only their labour to sell, and no one's buying.


  1. There are also several assumptions in place surrounding unemployment. I mean, if you don't have a job, you are less employable. If you live in poverty, it's hard to get a job that pays all the bills. You can be working at a low paying job and still be impoverished. And yet, the response people have is "you must be lazy".

    I *think* it has a lot to do with people assuming that since they had to work hard to get where they got to, others should work just as hard. It's hard to understand the barriers that others face and it's easy to ascribe what we think must be the problem. The reason that you or I might become unemployed would either be by choice or out of laziness. So either those who are unemployed not by choice must be lazy, right? Because they are like us, right? They are, but the barrier is different.

  2. That's certainly part of it. People do have a tendency to overlook handicaps other people face while making excuses for their own failings. "Just say no to drugs!" is a good example of that; it's easier for some people to say no than for others, yet we tend to assume that if we can say no, it should be just as easy for someone else to do so, and any failure to do so can be chalked up to simple immorality rather than different circumstances and personality strengths/weaknesses.

    I just think we need to be aware of and set aside these moral biases when we think about how to deal with problems like unemployment, drugs, and so on. But a lot of the time, these biases are completely unconscious.

  3. I'm going to try this again. I posted responses to two of the February posts last night, and they appeared to show up, but then, *poof* -- vanished.

    I can't tell if Shi No is serious or sarcastic by the tone, but assuming serious, then:

    "The reason that you or I might become unemployed would either be by choice or out of laziness. "

    is definitely a biased statement.

    Most experts will indicate that a job search is the most difficult job anyone will ever have: and the compensation is deferred.

    So, an avid work seeker is far from lazy and that dispenses with the 'laziness' argument.

    However, that also doesn't guarantee results. I sent out a number of inquiries that other writers have gotten 'X' percent response on and although I eventually did get some interest from one party, that took about three or four months after the inquiries went out.

    The collateral I used is good, since I had it reviewed by others who gave it high marks; and different collateral has gotten "Wish I did have something for you" types of response so I know I know how to present myself.

    That dispenses with the 'choice' argument.

    In reality, there are many other things that play a part including giving summer or internship to the boss's kids [or kids of the boss's friends], and internal corporate politics, among many others.

    The U. S. employment system has always been rather a crock. There are more rigid laws protecting workers in the U.K. for example. Not sure where Canada fits in the spectrum.

  4. To be fair to Shi (if it is who I think it is, someone who knows me personally), I suspect the "you or I" was really literally intended to mean specifically me or her, and is therefore less biased than you might think. Arguably my being unemployed, given my education and credentials, IS a result of choice or laziness (although the chemotherapy over the last few months has also been a factor).

    But your point is certainly valid. Jobhunting IS a gruelling ordeal, and draws on skills often quite different from those for which one is presumably being hired. Just one of many ways in which the market process leads to distortions and inefficiencies. That's not to say that centrally directed economies would be more efficient, but we should be realistic about the imperfections of the Invisible Hand.