Apr 11 2010

Permanent High Unemployment – Time to change the game

Kal @ 11:34

In the US somewhere between 10% and 20% of the working age adults are out of work and there are no realistic prospects of this changing any time soon. Many other parts of the world have way higher unemployment rates.

How it works now

To the unemployed individual this is devastating. At first, for the lucky few, there is unemployment insurance providing some fraction of the person’s former wage. After unemployment insurance runs out there is some form of charity, either from the community of from the family.

The unemployed person has had a change of status and in most cases a sever change in the amount of available resources, but these unfortunates do not go away. Many have families dependent on them for support and these support needs continue whether or not the person is working. Someone has to pay the rent and supply the food and other necessities of life.

In times of near full employment the unemployment insurance system works relatively well. The newly unemployed gets enough to get by but not so much as to be too comfortable while finding a new job. Jobs are easy to find and the earnest applicant finds one quickly with only a small disruption to life.

In times like these unemployment insurance really does not work at all. For every available job there are hundreds of over qualified applicants. The government keeps extending the unemployment insurance period, but nothing changes to make finding employment more likely. The working resent those looking for work and those looking can clearly see that the system is not treating them fairly.

Unmet needs

In the US we have classrooms with 30 to 50 students per teacher. Almost everyone agrees that much smaller ratios would produce better results.

All over the US parks and libraries are closing because there are not enough people to keep them open. Almost everyone agrees that these should not be closed.

All over the US we have streets and bridges that are falling apart. Almost everyone is in favor of preventive maintenance.

Unrealized opportunities

Obviously not every unemployed worker is qualified by either training or temperament to help solve our education problems, but a lot of the unemployed right now are young people just out of college. And a lot of the rest are former office workers who would be qualified to tutor elementary students. Unemployed scientists and engineers could do a lot of good in the upper grades.

Parks and libraries could probably productively use additional help, but just keeping on the existing staff would be a great start. There can not be much benefit to society in shifting a productive person to the unemployed status. No doubt there is a lot of deferred maintenance that could absorb a good many others as well.

Streets, bridges, and other infrastructure needs are pretty obvious. We can put quite a lot of folks back to work bringing these back up to speed. Unlike the student, parks, and libraries needs, this maintenance would use new resources so it is not quite as obvious which infrastructure should be continued and which discontinued. Building new roads appears to me to be mostly folly, but bringing the railroads up to first class condition is probably money well spent. How that priority discussion eventually shakes out aside, a lot of our unemployed should be doing something useful.

It is time to change the game and put most of our unemployed back to doing something productive.


Category: Conventional Economics | Guaranteed Wage | Politics | Recession | Sustainability
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