ForumTouchy Subjects ► Why does unemployment exist?
Why does unemployment exist?
To clarify, are you asking why we provide unemployed people with unemployment assistance programs or why people can become unemployed in the first place?
Why not both? Very good question though, I was referring to the later the first time, however I feel we should cover both.
Part One: Unemployment (the condition of having no job) occurs because:

1. Not all people are qualified for all jobs

2. Not all people are able to move for open jobs

3. Not all people are willing to do all jobs

4. Some unemployment is good for economies and workers because it creates work mobility. By leaving my job, I open it up for somebody to be promoted into it.

5. Economies suffer exaggerated inflation under overemployment conditions, meaning the value of currency goes down.

6. There's not an unlimited number of jobs. Jobs are subject to resources -- people need to be paid, which means there must be money somewhere. Usually that money comes from revenue, but it can also come from other sources.

Important note, it's possible (and frequent) that there are more jobs than workers in an economic system, especially if you look at specific types of workers.

Part 2: Unemployment Benefits

Depending on your point of view, unemployment insurance/assistance exists for a variety of reasons:

1. Unemployment programs are moral

2. Unemployment benefits increases a system's ability to match workers to suitable jobs, because there is less urgency in the system to take any worker and place them in any job. This should, in theory, allow workers to earn more as they are able to select for higher-paying when in temporary unemployment.

3. Unemployment programs reduce structural unemployment, which is unemployment which happens when employers can't find prospective employees and vice-versa. This streamlines the economy and increases productivity

4. Assisting people during temporary unemployment is cheaper than not assisting them. People are more likely to commit crimes, have unpaid debt, drain medical systems and strain public resources when they don't have income.

5. Unemployment benefits are a stabilizing force for economic transactions (more unemployment benefits are paid out when more people are unemployed, thus making shifts in the business cycle less extreme)

6. Private unemployment insurance wouldn't work effectively as an opt-in program because the people who would pay unemployment insurance would be self-selecting as the people who are most likely to need payouts.
Personally I would like to start with part one, that being said I wonder if these are all of the reasons for unemployment. Would you say that these are all of the causes, or at least all the major ones?
These are all causes. There are many, many causes for everything in the world.
But are they all the causes?
I suspect Gorgon's list part one is exhaustive. If someone wants to be employed but isn't, I can't think of any other basic reasons besides 1, 2, 3, and 6. We could break each one down in more detail, but is there some other cause either of you is thinking of?
If I was to cram them all in a nutshell I'd say unemployment exists because there are more working-age people than jobs they can or will do.
To be quite frank I feel like the six reason above are not accurate, or at the very least not the main issue when it comes to unemployment. I personally see that we are being compelled by our employers to work long hours for less pay because they could easily replace us and we know this. So they use our fear to compel us. Isn’t there more than enough work to go around? Do me a personal favor, you don’t have to read the whole book, just read chapter five titled unemployment. I am genuinely curious if this is the real reason for unemployment.
Now assuming the book is correct, would that mean things like food stamps and unemployment checks are things our society doesn’t need? Things that could not exist if we did things according to chapter five?
R0b1n H. said:
I personally see that we are being compelled by our employers to work long hours for less pay because they could easily replace us and we know this. So they use our fear to compel us.
Pretty much, yes. For the more common, crappy jobs.
R0b1n H. said:
Isn’t there more than enough work to go around?
Yep. In both white collar and blue collar work. People don’t want to do the crappy jobs, but there’s a lack of qualifications for the not-crappy jobs.
Also, companies can fail without much warning, which could contribute to the unemployment rate.

There are some people who aren’t optimized by nature to the better jobs either. There was a teacher that was chided for being too efficient, because she would go ham on the requests to the point that the clients were unhappy about getting it too early.
From What Is Communist Anarchism:
It is in the interest of the people that there should be no unemployed, that all should have an opportunity to work and earn their living; that all should help, each according to his ability and strength, to increase the wealth of the country, so that each should be able to have a greater share of it.
Indeed, that is good. However, most don’t find the most opportune job for them. So, they end up working a job they don’t like.
From What is Communist Anarchism:
But the shoemaker of to-day does not know and does not care how many pairs of shoes are needed. Thousands of people may need new shoes in your city, but they cannot afford to buy them. So what good is it to the manufacturer to know who needs shoes? What he wants to know is who can buy the shoes he makes: how many pairs he can sell at a profit.
Actually, it could be in their interest. Giving excess shoes for free to homeless people has two benefits(though, no idea if this is actually executed):
1. Freeing up storage.
2. It makes the company seem more kind. People want to support kind companies, so more people will buy and recommend them, because they help people who need it.
Makes the company more attractive to consumers.
From What Is Communist Anarchism:
If we had a sensible system, we would produce the things which the people want and the quantity they need. Suppose the inhabitants of a certain locality needed 1,000 pairs of shoes; and suppose we’d have 50 shoemakers for the job. Then in 20 hours work those shoemakers would produce the shoes our community needs.
Try upscaling to 500,000 pairs of shoes and 100 shoemakers. How many hours would that take? If course, I’m making this up. But either way, it would be much less convenient for us, the consumer, to file in a shoe for people to receive in about a month, every month.
That sort of system only works for small-scale production. Where there’s a couple thousand people wanting it.
Employers need to cater to us, too. So, they produce as much as they can handle and store the remainders. Because it would be horrible if they were to produce too little, so producing too much would be the better way to go; there’s a much higher cap for that. And, hey, they could get a break if they produced too much.
From What Is Communist Anarchism:
‘Over-production’ this is called. But in truth it is not over-production at all. It is under-consumption, because there are many people who need new shoes, but they can’t afford to buy them.
Which is why people lower the price. However, people would be crazy to sell a $10 production cost at $5. That would be a net loss, correct?

So, and perhaps I’m not connecting the dots properly, what do you suggest? I personally would try to get those in school to explore further, perhaps having a class specifically designed for exploration, versus on the very little free time they have.
That way, they can start optimizing school for that job earlier, and therefore be able to join the job market sooner.
R0b1n H. said:
Now assuming the book is correct, would that mean things like food stamps and unemployment checks are things our society doesn’t need? Things that could not exist if we did things according to chapter five?
Also, Chapter 5 never gave anything other than “Capitalism is a broken system”. At least, that’s how I read it. Feel free to correct me on that.
Oh hell this is thread number three you've made to get us to read your anarchist bible, you asked a question, Gorgon answered. If this isn't going to be different to your other two odd threads I'm going to lock it.

If you can't entertain the possibility that there are more compelling reasons than "evil capitalists" I could introduce you to several actual no hopers who put Orwell's Proles to shame.

Largely unemployment exists because jobs that need filling aren't desirable/easy and jobs that are desirable don't need filling. New Zealand needs fewer architects than we train and far more fire engineers than we do train, thus there is massive underemployment in a well paid boom sector and massive unemployment in another, nothing to do with evil capitalism.
But if capitalism is the system by which the economy is organized, why isn't it capitalism's fault that some jobs remain undesirable?
To an extent it does require blame, some fields remain undesirable as a result of pay or treatment, others absolutely do not.

As an abstract example: why is there a massive shortage of physics and maths teachers and a massive oversupply of English and history teachers? The honest reason funnily enough is unionisation and the democratisation of pay in teaching: a teacher can expect a starting salary (in NZ) of 40-50k and expect to cap out at maybe 70-80. Most jobs requiring a science degree have a far higher payscale and most requiring an arts degree do not. Can I now say that unions are shit because they stifle one industry?

Why is fire engineering (highly paid with a good lifestyle since it's largely consulting) undesirable even though student for student dozens of scholarships are available to make study desirable in comparison to majors with objectively little in the way of career prospects?

Genuinely, a large reason for unemployment in modern economies is not wanting to train for sought after fields.

Edit: for reference, I have a friend who teaches at one of the worst schools in the country because that was the only viable option for teaching history; as she has an education degree she is qualified to teach maths and could if she switched teach at any school in the country with better career prospects, but she opts for a worse lifestyle and for a year opted to work retail rather than accept a "better" job. Individual choices matter in the unemployment equation.
Capitalism doesn't care about unemployment, homelessness, monopolies, slum landlords or financial inequality. I don't have a problem with blaming Capitalism: any problem within an economic system is ultimately a flaw in that system. Should people fit the system or should the system fit people?

But we might as well blame the Agricultural Revolution while we're here. Living in settled communities is what led to the concept of jobs, which led to the concept of a lack of jobs. Prior to that, people got food from nature and everyone was homeless. Instead of doing a job to get money to buy food, we cut out the middle-man and got the food ourselves. I imagine there were still people who were lazy, unskilled, elderly, sick or disabled, but hunting-gathering had an infinite number of vacancies.

In post-industrial societies, jobs are under pressure from outsourcing, automation and immigration. Companies like Google invent driverless cars, and we marvel at the technological progress and how clever we are for removing the need for labour, even though labour is how we make our living. What happens to the millions of people who make their living from driving? A driver is not going to magically become interested in robotics, and even if they did, I doubt automation creates as many jobs as it destroys.
Those are fair criticisms of capitalism I'd agree with in a long term sense, what I wouldn't accept is that our current unemployment is a result purely of evil capitalists. No longer having window knockers and streetlamp lighters seems like an odd criticism of capitalists. Not retraining people would be.
You know, if someone cited to me a scientific paper from almost 100 years ago, I would take every conclusion it drew with an enormous grain of salt.
Economics is barely science sometimes, but I don't think you can take economic theory written before the Great Depression with no caveats.
The chapter you've cited talks about working people to the point of ill health and death. It talks about local shoe manufacturing and strikebreakers.
The economy of today has some marked differences to that of 1929. A much smaller percentage of the population actually does physical labor. An increase in automaton is a bigger cause for unemployment than things like accidental overproduction.

I also find it funny that the book holds this example of overproduction as a capitalist issue, like collectivized economies aren't notorious for poor planning.
Just to quickly point out: in a previous thread I criticised this exact book posted by this exact user for its historical inaccuracies and how outdated it is for a modern economy.

As a historical sidenote Coldfrost: most of what we call Modern Physics and all of the theories we work off were established or being established around 1929 so not technically true ;p
There's truth in that. I didn't mean to imply that everything (or even most things) from the 1930s is bad science, just that our view of the world has evolved significantly since then. Freud was still writing about Oedipus Complexes in 1929. You gotta find more recent sources too. A lot of theories haven't stood the test of time.
Almost anything biology or health from 1929 you can take with half a grain of salt.
Coldfrost said:
There's truth in that. I didn't mean to imply that everything (or even most things) from the 1930s is bad science, just that our view of the world has evolved significantly since then. Freud was still writing about Oedipus Complexes in 1929. You gotta find more recent sources too. A lot of theories haven't stood the test of time.

I was being well and truly tongue in cheek don't worry. When the book we're talking about was written Keynesian policies didn't exist and half the world still used the LSD (I'm not kidding that's the old fashioned British system's name) system and the gold standard.
On the other hand, nobody was using LSD because it wasn't made and studied until the 1940s.
Unless we count ergot poisoning
Not really important but ergot doesn’t actually contain lsd but some of its alkaloids are psychoactive.
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