Possible ways to fight the looming problem of unemployment

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Possible ways to fight the looming problem of unemployment

Postby scwizard » Fri Sep 04, 2009 1:16 pm UTC

It seems that one of the trends of the post industrial world is towards increased unemployment. Places such as Western Europe and Japan have high and increasing levels of unemployment. This trend, if it exists, seems reasonable to me. Advances in technology have lead to increased wealth in those countries, letting one person grow enough corn to feed thousands for instance. The idea that everyone should have a job seems to be dying.

So the question is what should we do with these unemployed?

There's a saying that goes "the devil makes work for idle hands." If nothing is done then some people might do wonderful things with their free time (such as OSS), but there are also people such as the pranknet folks who use their free time for socially destructive purposes.

When I initially thought about this problem the first suggestion that came to my mind was a naive one. In the United States at least, parents aren't always there for their children. Due to my own experiences as a child, I think it would be a good thing if modern parents took a more active role in the upbringing of a child. However when I suggested this people pointed out to me that this could potentially erase the progress that women have made in the workplace recently. If people were compensated for staying home with their children, then employers would avoid hiring women or avoid giving them certain amounts of responsibility, because they'd be afraid that they might leave the workplace if the had a child.

A trend I do find encouraging is that people are perusing higher education in increasing numbers. However I don't think this is enough to combat this problem.

So what should the government, or some other agency do to ensure that people who aren't working put their hours towards something socially productive?
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Re: Possible ways to fight the looming problem of unemployment

Postby Sharlos » Fri Sep 04, 2009 1:38 pm UTC

Well, looking very long term, society will become so much more productive/automated that there will be very few jobs for people to perform. The only trend I can see occurring would be enforcing a limited number of hours worked per week and then hiring more people to compensate. But something like that would only work if all/most of the countries of the world were at similar levels of production or companies would simply outsource their labour to cheaper/less restrictive regions of the world.

Another mid-term alternative would be to slowly reduce the number of people being born, subsequently reducing the number of people looking for work.

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Re: Possible ways to fight the looming problem of unemployment

Postby scwizard » Fri Sep 04, 2009 1:46 pm UTC

Sharlos wrote:Another mid-term alternative would be to slowly reduce the number of people being born, subsequently reducing the number of people looking for work.

Hmm, this seems to work for South Korea, but I'm not sure it's working so well for Japan.

Also as China has demonstrated, birth control laws are no fun for anyone.

The only trend I can see occurring would be enforcing a limited number of hours worked per week and then hiring more people to compensate.

France has long vacations mandated by law, but it doesn't have anything radical enough to made a dent in unemployment. This is an interesting idea.
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Re: Possible ways to fight the looming problem of unemployment

Postby Jimmigee » Fri Sep 04, 2009 1:57 pm UTC

Unless our systems of society were to change, then I don't think it is just a matter of keeping the unemployed ocupied. Don't we need to keep them employed? Capitalism relies on people having money to live and to spend on the stuff being churned out on factory lines. Idle hands will be the least of your worries when we find ourselves with mobs of hungry and poverty-stricken hands!

I hasten to add that I don't know that this trend is inevitable. Advances in technology also create new jobs, and post industrial nations seem to have a knack of coming up with new jobs that can't (yet) be replaced by 'technology'.

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Re: Possible ways to fight the looming problem of unemployment

Postby scwizard » Fri Sep 04, 2009 2:40 pm UTC

Well that's the problem with capitalism. The fact is that in post industrial society there aren't enough jobs for that, and that will remain the case no matter how free the markets are. This is why every post industrial society, including America, has some sort of social protections for the unemployed.
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Re: Possible ways to fight the looming problem of unemployment

Postby Heisenberg » Fri Sep 04, 2009 2:48 pm UTC

scwizard wrote:
The only trend I can see occurring would be enforcing a limited number of hours worked per week and then hiring more people to compensate.

France has long vacations mandated by law, but it doesn't have anything radical enough to made a dent in unemployment. This is an interesting idea.

That's because to a certain degree this causes unemployment. Minimum wage, paid vacation, maximum hours per week, these are all disincentives to manufacturing in a particular country. Now, you can still argue that these are good things to have, but they do result in unemployment.

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Re: Possible ways to fight the looming problem of unemployment

Postby Zamfir » Fri Sep 04, 2009 3:05 pm UTC

scwizard wrote:It seems that one of the trends of the post industrial world is towards increased unemployment. Places such as Western Europe and Japan have high and increasing levels of unemployment. This trend, if it exists, seems reasonable to me.

You have to very careful with statements like this, because unemployment measures are tricky, differ from country to country, and do not always say what they appear to be saying.

Your mention about Japan and Western Europe suggests that you exculde the US from this trend. An important point is here that while unemployment figures for these countries are often high compared with the US, their employment figures are very similar to the US, in particular for men. In other words, the US has a higher number of men who are not working (or not working ful-time) and not looking for work, and are therefore not counted as unemployed. There is a wide range of explanations for this: people who only look for a job to keep their benefits, prisoner rates, different numbers and statistical measures for handicapped people, measures to count part-time employees, but the end result is that the US does not actually has a lot more men working full-time.

It does lead (or is in the leading group) when it comes to the number of women at work, and the amount of hours they work. Whether this is structural or simply one of those aspects where the US is ahead in a social trend is hard to say (I tend to think the second), but it does run against your thesis. One of the big effects of late industrialization was a move towards stay-at-home moms, but post-industrialization seems to be a steady force in turning that trend around.

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Re: Possible ways to fight the looming problem of unemployment

Postby scwizard » Fri Sep 04, 2009 3:12 pm UTC

Nonono, the US is definitely not excluded from this trend.

Even if the US is lagging behind Western Europe in terms of those not working (as as you demonstrate, it's not) it's moving in the same direction.
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Re: Possible ways to fight the looming problem of unemployment

Postby Zamfir » Fri Sep 04, 2009 3:22 pm UTC

scwizard wrote:Nonono, the US is definitely not excluded from this trend.

Even if the US is lagging behind Western Europe in terms of those not working (as as you demonstrate, it's not) it's moving in the same direction.


But the thing is, I am not really sure the trend exists, especially if the increased labor participation of women is taken into account.

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Re: Possible ways to fight the looming problem of unemployment

Postby scwizard » Fri Sep 04, 2009 3:33 pm UTC

Persons not in the labor force (US):

Image

Compare with US population: http://www.google.com/publicdata?ds=usp ... tion+graph

EDIT: Yeah, after running the numbers it seems that the portion of the population not in the labor force in 1980 and 2009 is pretty much the same.

However the graph does seem to be curving. Perhaps the number of people not in the labor force is accelerating?
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Re: Possible ways to fight the looming problem of unemployment

Postby Zamfir » Fri Sep 04, 2009 6:40 pm UTC

Again, be careful what you are exactly measuring. People not in the work force presumably includes children and retired people, so those trends might be demographic effects, including effects of immigration.

If people study longer, or retire sooner, those effects wll appear in the figures too. It might be that people spend more time studying as a form of hidden unemployment, and the same might be true for ealry retirement. But then again, they could be changes in preferences of people, or results of economic forces.

These kinds of question are fiendishly difficult, but if you dig deep enough you might find some interesting stuff anyway.

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Re: Possible ways to fight the looming problem of unemployment

Postby Dark567 » Fri Sep 04, 2009 7:20 pm UTC

scwizard wrote:Well that's the problem with capitalism. The fact is that in post industrial society there aren't enough jobs for that, and that will remain the case no matter how free the markets are. This is why every post industrial society, including America, has some sort of social protections for the unemployed.


I guess I completely disagree with the premise that as technology advances and we move into a post-industrial society increased unemployment will result.(Actually I am pretty sure I've read before that its an economic fallacy, but I can't seem to find a source)

Generally designing, engineering and maintaining new technology that replace workers also provides jobs, albeit less jobs then the workers it replaces. The reason for using those new technology though is to reduce cost, which leaves the consumer with more money to either be spent on other goods and services which will then provide more jobs, or invested which will also provide more jobs.

The problem tends to be that when a large workforce is replaced by automation consumers will want to spend there money somewhere else that we don't have enough trained individuals to fill. For example if all the automakers automate there factory lines completely, consumers would save money, and they might want to then spend that money on health care creating more demand for doctors and nurses. This same reasoning applies to something like TV's, now that consumers have more money they will want better TV's, so more engineers are need to design those TV's.

In general advances in technology doesn't necessarily mean less demand for jobs, it tends to just mean that there are less jobs that require lower levels of education. I would also like to point out that policies in these countries are also causing some of there unemployment, why would I pay an order of magnitude higher for an unskilled laborer in Europe to make widgets, when I can pay a unskilled labor in China a tenth of that? I think this clearly shows that these countries could have lower unemployment, but instead choose policies that move jobs from those countries to others.
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Re: Possible ways to fight the looming problem of unemployment

Postby Soralin » Sat Sep 05, 2009 7:44 am UTC

Ideally, in the long term, a transition to a http://en.wikipedia.org/wiki/Post_scarcity_society :)

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Re: Possible ways to fight the looming problem of unemployment

Postby nitePhyyre » Sat Sep 05, 2009 10:13 am UTC

This is going to be a theme of mine, my apologies.

It seems there is a notion going around that work is a good thing. That 'status quo' is a good thing. I posit that technological non-employment should be a goal, not something to be derided. There seems to be the assumption that if someone is working a machine it is inherently better than the machine working itself. If I go to McDonald's and get a burger, if someone makes it for me, the burger is no better or worse, no more valuable than if a machine made it. This is very, very important. Keeping someone tied to a machine, just cause otherwise they would be jobless, does not help society at large. It just maintains the status quo. If status quo was what we wanted, we never would have left the trees. Progress is the name of the game.
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Re: Possible ways to fight the looming problem of unemployment

Postby Sharlos » Sat Sep 05, 2009 11:48 am UTC

nitePhyyre wrote:This is going to be a theme of mine, my apologies.

It seems there is a notion going around that work is a good thing. That 'status quo' is a good thing. I posit that technological non-employment should be a goal, not something to be derided. There seems to be the assumption that if someone is working a machine it is inherently better than the machine working itself. If I go to McDonald's and get a burger, if someone makes it for me, the burger is no better or worse, no more valuable than if a machine made it. This is very, very important. Keeping someone tied to a machine, just cause otherwise they would be jobless, does not help society at large. It just maintains the status quo. If status quo was what we wanted, we never would have left the trees. Progress is the name of the game.

People who retire early, die sooner, people who are unemployed are more likely to join radical extremist groups. If almost all of humanity didn't have much in the way of work, I imagine our species would be fairly more depressed than they currently are.

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Re: Possible ways to fight the looming problem of unemployment

Postby the_stabbage » Sat Sep 05, 2009 12:27 pm UTC

Can anyone point me to some definite figures that demonstrate a trend toward higher unemployment? Or even lower participation in the workforce?

It might seem that society is heading to high unemployment to anyone observing the world-economy since the beginning of the recession. But when the recession ends, unemployment will fall soon after.

I'm a little rusty on the reasons why (and I study this in school.. whoops), but a certain level of unemployment is good.

If the trend is indeed toward higher unemployment, but not lower workforce participation, then the reason could be because of increased frictional unemployment. Frictional unemployment is what you have in those couple of weeks after you quit your old job and start your new one. It's generally a good thing to have it, because that means that people are looking for jobs they are better suited to.

It makes sense to me that a first-world society might have increasing frictional unemployment. People are going to school more often and for longer, so they will change between student jobs rapidly, as students are wont to do. People change careers very fast, and the in-between training or research periods might be longer than when moving forward in the same career. A rich society makes it easier, legally, financially, and technologically, to move somewhere new for work. Again, that might entail a short period of joblessness.

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Re: Possible ways to fight the looming problem of unemployment

Postby Vaniver » Sat Sep 05, 2009 2:16 pm UTC

Capitalism is very good at shifting people from useless employment to useful employment.

If you're worried about mechanization, make it cheaper to hire people. You don't need to give a French machine five weeks of vacation a year, but you do need to give a French person that. Decisions are made at the margin.

But the more serious problem is that as menial labor becomes less and less important, skilled labor becomes more and more important. Only in a well-developed capitalist society do you have people who make a living putting comics on the Internet- but not everyone who decides to leave their job can get a job putting comics on the Internet. People whose skill sets are limited to menial labor will not really have a place in a society where menial labor has low demand (and, coupled with high supply, will thus pay very poorly). What do you do with them?

Well, one option is government housing, food stamps, and a World of Warcraft account. Another is public works- but the problem there is that construction is heavily unionized, and thus heavily mechanized. Hiring the unskilled to make a wall out of rocks by carrying them seems cruel and pointless when you could hire skilled people with machines to do the same thing cheaper and faster. Another is the revival of servants- which is made troublesome by the fact that home life is already so mechanized. You don't need a washerwoman when you have a washing machine, and most homes don't need a maid more than once or twice a week.
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Re: Possible ways to fight the looming problem of unemployment

Postby karkaputto » Sat Sep 05, 2009 10:11 pm UTC

eh. this is a non-issue. if it hasn't been a problem for the last 1000 years as we've moved from 80% farmers to 2% farmers, then i don't think we need really to worry about it now.

you'll always need people to do something; we'll just move from farmers to factory workers to writers and artists (which are not liable to be replaced by mechanization in the near future). As people need to work less (in manufacturing), that gives them time to read more, watch more TV/porn, whatever, and that will create additional demand for these jobs. For people with few skill sets, well, innovation ain't coming that fast, but even for them we'll want more Wal-Mart greeters, faster checkout lines, etc, and we'll be willing to pay for the privilege. We'll be just fine. And if we're ever really desperate for jobs, we can always legalize prostitution.

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Re: Possible ways to fight the looming problem of unemployment

Postby cerbie » Sun Sep 06, 2009 11:54 am UTC

Sharlos wrote:People who retire early, die sooner, people who are unemployed are more likely to join radical extremist groups. If almost all of humanity didn't have much in the way of work, I imagine our species would be fairly more depressed than they currently are.
Not having much in the way of work does not mean not having much in the way of work. it just means not having much in the way of other people's work to do.

How would having enough leisure time to satisfy all of your intellectual and emotional desires cause depression? If you are unemployed, or at least not working >40 hours a week (I'm considering commute to count as basically work hours spent by the employee), but do not have to worry about necessities because of it, why would there be a real problem? Unfortunately, it's just hypothetical, as practically no nation of any real size has tried this sort of thing.

I don't think it's a non-issue, because of society becoming disrupted during transitional periods, but generally agree with karkaputto, that less need for work to produce and serve for basic things will mean greater demand, and greater leisure time for, those things that our modern work ethics have put on the back burner, like arts.
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Re: Possible ways to fight the looming problem of unemployment

Postby nitePhyyre » Sun Sep 06, 2009 12:59 pm UTC

Sharlos wrote:
nitePhyyre wrote:This is going to be a theme of mine, my apologies.

It seems there is a notion going around that work is a good thing. That 'status quo' is a good thing. I posit that technological non-employment should be a goal, not something to be derided. There seems to be the assumption that if someone is working a machine it is inherently better than the machine working itself. If I go to McDonald's and get a burger, if someone makes it for me, the burger is no better or worse, no more valuable than if a machine made it. This is very, very important. Keeping someone tied to a machine, just cause otherwise they would be jobless, does not help society at large. It just maintains the status quo. If status quo was what we wanted, we never would have left the trees. Progress is the name of the game.

People who retire early, die sooner, people who are unemployed are more likely to join radical extremist groups. If almost all of humanity didn't have much in the way of work, I imagine our species would be fairly more depressed than they currently are.

That's a depressing view. Source? I find your extremist group idea retarded. If people join extremist groups, they were either already extremist, but now have free time, or something has driven them to extremism. Something like being called a loser for being jobless and not having money to buy food or shelter. If society was setup in a way where you need a job to live, yet society can't supply you with a job, going to extremes against said system seems logical. The point here is we see this problem on a large scale looming.
karkaputto wrote:you'll always need people to do something; we'll just move from farmers to factory workers to writers and artists (which are not liable to be replaced by mechanization in the near future). As people need to work less (in manufacturing), that gives them time to read more, watch more TV/porn, whatever, and that will create additional demand for these jobs. For people with few skill sets, well, innovation ain't coming that fast, but even for them we'll want more Wal-Mart greeters, faster checkout lines, etc, and we'll be willing to pay for the privilege. We'll be just fine. And if we're ever really desperate for jobs, we can always legalize prostitution.
I think there are several of us here that disagree with "you'll always need people to do something". It is becoming less true everyday. Society has already shifted immensely to a service-based economy. IIRC, 75% of people have service jobs. There aren't alot more people we can shove in to serve us as a full time career. In addition, the service job are already becoming obsolete. Ever seen those self-serve checkout lines at the grocery store? Automation has allowed them to have one person watching 5 cashes. Walmart has already begun experimenting with RFID tags and scanners that will tally everything in your cart instantly as you walk by. By doing so, they could eliminate all of the cashiers. And what will we do when even the greeters could be robots that do the job for better and less? Tech support is already a practically non-skilled job, you punch in the clients problem, the computer tells you the likely solutions. How long will it take before the computer can just read the screen to the phone? And as for writers or other typer of "intellectual" work, there are only so many books, blogs or articles, someone can read. The market would be so over saturated there would be almost to signal amongst all the noise.
Vaniver wrote:Capitalism is very good at shifting people from useless employment to useful employment.

If you're worried about mechanization, make it cheaper to hire people. You don't need to give a French machine five weeks of vacation a year, but you do need to give a French person that. Decisions are made at the margin.
Are you saying the options are unemployed with mechanized labour or sweat shops?
Vaniver wrote:But the more serious problem is that as menial labor becomes less and less important, skilled labor becomes more and more important. Only in a well-developed capitalist society do you have people who make a living putting comics on the Internet- but not everyone who decides to leave their job can get a job putting comics on the Internet. People whose skill sets are limited to menial labor will not really have a place in a society where menial labor has low demand (and, coupled with high supply, will thus pay very poorly). What do you do with them?

Well, one option is government housing, food stamps, and a World of Warcraft account. Another is public works- but the problem there is that construction is heavily unionized, and thus heavily mechanized. Hiring the unskilled to make a wall out of rocks by carrying them seems cruel and pointless when you could hire skilled people with machines to do the same thing cheaper and faster. Another is the revival of servants- which is made troublesome by the fact that home life is already so mechanized. You don't need a washerwoman when you have a washing machine, and most homes don't need a maid more than once or twice a week.
Also we would eventually invent "Rosie" from the Jetson's. So then is your conclusion the government WOW account option? That is the only thing you mentioned that you didn't rebut. I think it is a swell idea. A Star Trek typed society.
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Re: Possible ways to fight the looming problem of unemployment

Postby Vaniver » Mon Sep 07, 2009 2:19 am UTC

nitePhyyre wrote:Are you saying the options are unemployed with mechanized labour or sweat shops?
Those are the extremes, yes. They're hardly the only options (as I said, decisions are made on the margin- each increase in the cost of labor will make some jobs cheaper if mechanized).

nitePhyyre wrote:Also we would eventually invent "Rosie" from the Jetson's. So then is your conclusion the government WOW account option? That is the only thing you mentioned that you didn't rebut. I think it is a swell idea. A Star Trek typed society.
I wouldn't call my consideration of the subject complete enough to have a conclusion. There are certainly some problems with welfare designed to turn the unskilled into gamers, and there's most likely a better plan out there.
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Re: Possible ways to fight the looming problem of unemployment

Postby negatron » Wed Sep 09, 2009 7:15 pm UTC

scwizard wrote:So the question is what should we do with these unemployed?

If there is no demand for increased employment, nothing. It's easy to forget, unemployment is desirable not undesirable. It's the common consequence of unemployment which is undesirable. If higher per-capita productivity is capable of reducing employment to yield the same output, that is a favorable achievement. Artificial jobs (government employment in many cases) in an attempt to increase employment, increase labor without increasing productivity, contradicting the whole purpose of human labor.

For the time being, a civilian is a desirable element under government and civic principle, hence immigration. When per-capita output becomes so high as to create excess abundance and thus deplete the need for work, the government would be forced to financially sustain it's civilians rather than the other way around. A superfluous citizen is one which the government does not seek to protect and secure. The human is now a parasite rather than in symbiosis to civic order. Clearly the entire concept of government and artificial boundaries will soon need to change. The current system's necessity for employment despite it's utility will increasingly contradict the principal purpose of human achievement.


scwizard wrote:but there are also people such as the pranknet folks who use their free time for socially destructive purposes.

Entertainment is sometimes materialistically destructive, yet destructive pranks are in some sense culturally constructive. It's a matter of structural precedence.
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Re: Possible ways to fight the looming problem of unemployment

Postby derick » Wed Sep 09, 2009 7:34 pm UTC

Let's remember that it's chronic unemployment, not unemployment we're really trying to fight. It's natural that some percentage the population will be out of work at any particular time, because sometimes it just makes good economic sense for people to leave their field and enter a new one, and the transition will never be seamless in a market economy (*not* that I'm opposed to one). And sometimes young people entering the workforce will be considred "unemployed" while they're looking.

It's when people who need work can't find it for economic reasons that we're in trouble. In a very fundamental way, there is always something productive someone could be doing, and therefore benefactors of this production who should voluntarily want to pay them for it. And here's where our basic view of economics is revealed in the discussion. If the federal reserve were taken out of the picture, so that interest rates weren't based on what side of the bed Ben Bernanke wakes up on, and credit+banking system regulations were removed (other than ones for fraud and such), to make it a lot easier and simpler for economic growth to take place, there would no longer be economic obstacles to new work being created.

Unemployment as a consequence of geographical and industrial market shifts are a "non-issue," as someone put it (i.e. we survived the transition from an agricultural economy). It's silly to say that mechanization will make unemployment rampant. We're always going to want more, so there will always be an economic incentive to provide that more for others. If for some reason mechanization "capped" human wants, so there were no more markets for anything and all our desires were filled by pre-existing pre-programmed machienes, then we'd have no need for employment! The luddies who wanted to burn down factories in the 19th century were just as wrong as the people in those factories, who want to burn down Asian cars, are today.

Unemployment as a consequence of the government signing itself blank checks and living in a whimsical fantasy world of infinite credit and a consumption-driven economics however, isn't a non-issue.

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Re: Possible ways to fight the looming problem of unemployment

Postby Yakk » Wed Sep 09, 2009 9:36 pm UTC

One possibility I like is to remove the huge marginal incentive for the unemployed to work.

Imagine someone who loses their job, and gets 60% of their salary top-up for 30 weeks after they lose their job (45% after taxes).

Suppose they found a job that would pay them 80% of their old salary (or 57% after taxes).

In exchange for 8 hours a day of work for 30 weeks, they gain 12% of their old salary in income (after taxes). This is a marginal incentive rate of 15% -- roughly equivalent to an 85% total tax rate for working. While much of it is in the form of clawed back benefits, the effects on a somewhat rational person are quite similar.

Similar things happen with welfare rolls. If you get 15,000$ a year on welfare, and can work full time and get paid 20,000$ (18000 after taxes), that is an effective hourly salary of 1.50$ (assuming 2000 hours of work per year). You can see how someone would be tempted to stay out of the workforce.

At the same time, caring for the poor, and smoothing the income of the unemployed, is a good idea.

We can fix this by introducing a dividend-based welfare system, where everyone gets 1000$ per month, and gets to keep it even if they get a job, and drop things like a minimium wage.

Or similarly, we can institute an income smoothing system that doesn't reward going unemployed -- 50% of your after-tax income goes into a running total unemployment insurance fund, and 50% of the unemployment insurance fund is given to you every year in the form of income smoothing (naturally, it earns interest). Then if you are unexpectedly unemployed, your income drops about 50% the first year (plus welfare dividend), then down to 25%, then 12.5% -- but your marginal incentive to get a job remains unchanged.

(Note that this income smoothing effect also acts as an automatic stabiliser on the economy. One would have to know more control theory than I do to determine if this is likely to dampen oscillation in the economy...)
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Re: Possible ways to fight the looming problem of unemployment

Postby Carnildo » Thu Sep 10, 2009 2:27 am UTC

the_stabbage wrote:I'm a little rusty on the reasons why (and I study this in school.. whoops), but a certain level of unemployment is good.

Having a certain level of unemployment allows employers to be selective in who they hire. For a few years, I lived in a city that, for a variety of reasons (mostly stupidity on the part of the city council), had a shortage of unskilled service labor. Places like McDonalds were offering twice minimum wage and even so were forced to hire people who were unsuited to the position, resulting in increased prices, reduced quality of service, and reduced profits.

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Re: Possible ways to fight the looming problem of unemployment

Postby zug » Thu Sep 10, 2009 3:32 am UTC

Carnildo wrote:
the_stabbage wrote:I'm a little rusty on the reasons why (and I study this in school.. whoops), but a certain level of unemployment is good.

Having a certain level of unemployment allows employers to be selective in who they hire. For a few years, I lived in a city that, for a variety of reasons (mostly stupidity on the part of the city council), had a shortage of unskilled service labor. Places like McDonalds were offering twice minimum wage and even so were forced to hire people who were unsuited to the position, resulting in increased prices, reduced quality of service, and reduced profits.

There's really no such thing as a shortage of unskilled labor, because skilled laborers are more than capable of unskilled labor. It's just a lack of inclination.

My town has a similar problem, though. Mcjobs pay pretty well around here (compared to min wage and national average), but they're only taken by people who can't speak or understand English well and consequently, contribute poor service in a snobby mostly-WASP area. So the food costs more here than it would at a Mcdonald's in a smaller town, and the service is shittier.
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Re: Possible ways to fight the looming problem of unemployment

Postby Zamfir » Thu Sep 10, 2009 7:09 am UTC

Carnildo wrote:
the_stabbage wrote:I'm a little rusty on the reasons why (and I study this in school.. whoops), but a certain level of unemployment is good.

Having a certain level of unemployment allows employers to be selective in who they hire. For a few years, I lived in a city that, for a variety of reasons (mostly stupidity on the part of the city council), had a shortage of unskilled service labor. Places like McDonalds were offering twice minimum wage and even so were forced to hire people who were unsuited to the position, resulting in increased prices, reduced quality of service, and reduced profits.

Sure, having desparate people around who will work for any wage you offer them is good for the rest of the people. But that will work for any form of labour. What are you doing yourself? Odds are there is someone out there who claims there are not enough people like you, and they can't get good people anymore (for the wages they are willing to pay).

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Re: Possible ways to fight the looming problem of unemployment

Postby Carnildo » Fri Sep 11, 2009 2:46 am UTC

zug wrote:
Carnildo wrote:
the_stabbage wrote:I'm a little rusty on the reasons why (and I study this in school.. whoops), but a certain level of unemployment is good.

Having a certain level of unemployment allows employers to be selective in who they hire. For a few years, I lived in a city that, for a variety of reasons (mostly stupidity on the part of the city council), had a shortage of unskilled service labor. Places like McDonalds were offering twice minimum wage and even so were forced to hire people who were unsuited to the position, resulting in increased prices, reduced quality of service, and reduced profits.

There's really no such thing as a shortage of unskilled labor, because skilled laborers are more than capable of unskilled labor. It's just a lack of inclination.

Since you insist the problem can't exist, I'll have to go into more detail. The city in question is a middle-class bedroom community suburb of Detroit. The city council is generally upper-middle-class to upper-class, and for several decades has guided policy to keep working-class people from living in the city, generally by preventing the construction of apartments and lower-cost housing (a well-known quote from one of the council members while voting against the construction of a tract of $300,000 homes: "We don't need any low-income housing in this city!"). A few years before I left, the city withdrew from the regional mass-transit organization, and the busses stopped running.

This cut off the main source of unskilled labor: residents of Detroit proper. You can't replace them with skilled labor because adult residents of the city generally already had jobs earning them 10-20 times what McDonalds would pay. The other traditional source of unskilled labor, high-school students, was similarly unavailable: students with an inclination to work would usually get higher-paying jobs working for their parents (yay nepotism!). This led to, believe it or not, a shortage of unskilled labor, an increase in labor costs, and the hiring of unsuitable employees: high-school students who are rude, lazy, and impossible to fire, because if you don't have somebody flipping burgers, you don't have a business.

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Re: Possible ways to fight the looming problem of unemployment

Postby nitePhyyre » Fri Sep 11, 2009 4:29 pm UTC

derick wrote:Let's remember that it's chronic unemployment, not unemployment we're really trying to fight.
NO, no, no, no! We are trying to not experience the EFFECTS of of chronic unemployment, that we've seen in the past. The effects are death, poverty, disease, despair, homelessness, etc. Look to the 1920s for more info. But unemployment rate is not the cause of those things. It is just a gauge as to when those things will happen. If I can make a bad, over-stretched analogy, it is like the gas gauge in your car. When the gas gauge points to empty, you fill up your car, not because of where the arrow was, but because there was no gas in the tank. You don't *really* care where the arrow is, you just don't want the car to stop. This is almost pointless, except for when the gauge breaks. A broken gauge sits at full (or empty). Do you never refill the car? No you just ignore the gauge, and do your best to not stall. Or you get a new/fix the old gauge. In this analogy, uhh, the car would be society, it running would be productivity/production/social progress. People being productive would be gas, I think. And unemployment rate would be the gas indicator. What I am (and I think others are) saying is that the gauge is breaking, or broken.

-Auto Workers: Most people working for car manufacturers would have lost their jobs a long time ago, if not for the union. Are people who are sucking down large salaries when they could be replaced by machines a net plus for productivity/production/social progress? Any other metric? Besides employment rate, obviously.

-Service: Self-serve vs Full-serve grocery lanes. Does having a person checkout you food make it tastier or more nutritious? No. Improve the grocery experience? Could go either way. Depends on whether they are in a good mood. So are they more productive than machines? Well, a person takes a lot of resources to maintain. A machine may take some repairs every once in a while. An unskilled labourer receives several dollars in pay an hour. A machine takes a couple of cents of electricity an hour. So, one take massive inputs of resources to function, the other almost none. They both contribute the same thing back to society.

All this means is that we should start to celebrate and fully utilize the attributes that truly make humans special. In the 21st century, opposable thumbs doesn't cut it any more. Human kind's greatest trait is to think and ponder. If your job doesn't require thought, if you aren't producing new knowledge, you are a drag on civilization. Humans can plan for the future,using the experiences from our past as a guide. If your job requires you to think only about the next and last quarter, you are squandering you gifts.
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You don't become great by trying to be great. You become great by wanting to do something, and then doing it so hard you become great in the process.

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Re: Possible ways to fight the looming problem of unemployment

Postby Dark567 » Fri Sep 11, 2009 4:57 pm UTC

nitePhyyre wrote:NO, no, no, no! We are trying to not experience the EFFECTS of of chronic unemployment, that we've seen in the past.
...

-Auto Workers: Most people working for car manufacturers would have lost their jobs a long time ago, if not for the union. Are people who are sucking down large salaries when they could be replaced by machines a net plus for productivity/production/social progress? Any other metric? Besides employment rate, obviously.

-Service: Self-serve vs Full-serve grocery lanes. Does having a person checkout you food make it tastier or more nutritious? No. Improve the grocery experience? Could go either way. Depends on whether they are in a good mood. So are they more productive than machines? Well, a person takes a lot of resources to maintain. A machine may take some repairs every once in a while. An unskilled labourer receives several dollars in pay an hour. A machine takes a couple of cents of electricity an hour. So, one take massive inputs of resources to function, the other almost none. They both contribute the same thing back to society.

All this means is that we should start to celebrate and fully utilize the attributes that truly make humans special. In the 21st century, opposable thumbs doesn't cut it any more. Human kind's greatest trait is to think and ponder. If your job doesn't require thought, if you aren't producing new knowledge, you are a drag on civilization. Humans can plan for the future,using the experiences from our past as a guide. If your job requires you to think only about the next and last quarter, you are squandering you gifts.


You have it exactly right. All of society tends to benefit when a worker gets replaced by a cheaper machine except for that one worker(and maybe their family). As technology increases we will need to be doing a lot more thinking jobs, and unskilled jobs will disappear; and that is a good thing!
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Re: Possible ways to fight the looming problem of unemployment

Postby nitePhyyre » Fri Sep 11, 2009 5:52 pm UTC

Dark567 wrote:You have it exactly right. All of society tends to benefit when a worker gets replaced by a cheaper machine except for that one worker(and maybe their family). As technology increases we will need to be doing a lot more thinking jobs, and unskilled jobs will disappear; and that is a good thing!
It is just that as we do this more and more, the classic model of supply-and-demand might begin to break down. Supply-and-Demand is all about setting a fair & appropriate price to the value of a product. You can only set a price once value has been established. The underlying thought processes goes as follows:
1) People die.
2) Because people die, they have limited time.
3) Because time is limited, our time has value to us.
4) Because our time has value, things that take up our time have an intrinsic value.
5) People make/acquire products.
6) It takes a person's time to make/acquire products.
7) Therefore, products have value.
Product == Time == Value

As I see it, the question is: what happens if you remove step 5? How do we derive value (not price) from a product? Supply-and-Demand requires scarcity. Supply-and-Demand cannot function with absolute abundance (look at the market for air). I do personally believe we are approaching a point where we will have to artificially keep abundance down, just so that we can a maintain the status quo. I don't like that idea.
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sourmìlk wrote:Monopolies are not when a single company controls the market for a single product.

You don't become great by trying to be great. You become great by wanting to do something, and then doing it so hard you become great in the process.

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Re: Possible ways to fight the looming problem of unemployment

Postby Dark567 » Fri Sep 11, 2009 6:01 pm UTC

nitePhyyre wrote:As I see it, the question is: what happens if you remove step 5? How do we derive value (NOT PRICE) from a product? Supply-and-Demand requires scarcity. Supply-and-Demand cannot function with absolute abundance (look at the market for air). I do personally believe we are approaching a point where we will have to artificially keep abundance down, just so that we can a maintain the status quo. I don't like that idea.


Keep abundance artificially down? That seems completely counter productive. If we have absoulute abundance isn't that a good thing? That means everyone can have everything they ever wanted and we can all sit all day around discussing whether or not god exists and other philosophical things on the SB boards, because there will be nothing else to do. The value of a product when absolute abundance is reached is 0. That's it, everything is free. We don't need economics anymore.

But, I think the whole thing is a moot point as I don't think we are coming anywhere close to that point.
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Re: Possible ways to fight the looming problem of unemployment

Postby nitePhyyre » Fri Sep 11, 2009 8:44 pm UTC

Dark567 wrote:
nitePhyyre wrote:As I see it, the question is: what happens if you remove step 5? How do we derive value (NOT PRICE) from a product? Supply-and-Demand requires scarcity. Supply-and-Demand cannot function with absolute abundance (look at the market for air). I do personally believe we are approaching a point where we will have to artificially keep abundance down, just so that we can a maintain the status quo. I don't like that idea.


Keep abundance artificially down? That seems completely counter productive. If we have absolute abundance isn't that a good thing? That means everyone can have everything they ever wanted and we can all sit all day around discussing whether or not god exists and other philosophical things on the SB boards, because there will be nothing else to do. The value of a product when absolute abundance is reached is 0. That's it, everything is free. We don't need economics anymore.

But, I think the whole thing is a moot point as I don't think we are coming anywhere close to that point.

It is only completely counter productive if your goal is to maximize happiness in some form.
Given that production is controlled by entities whose main goal is profit, not happiness, the aspects of supply and demand come into play. Essentially there is a sweet spot between Supply, Demand, and Profit. That sweet spot, as far as any one looking to make money is concerned, will NEVER be absolute abundance. Especially when you consider, that corporate management is held legally responsible to make as much money as they can, you can see why people think the corporate world is evil. :evil: But I think we may be tretcherously close to 'conspiracy theory land'. 8)
sourmìlk wrote:Monopolies are not when a single company controls the market for a single product.

You don't become great by trying to be great. You become great by wanting to do something, and then doing it so hard you become great in the process.

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Re: Possible ways to fight the looming problem of unemployment

Postby Ixtellor » Fri Sep 11, 2009 8:50 pm UTC

To the OP.
You might be better served trying to arrive at the natural rate of unemployment.
You can't have 100% employment because X % (Most think 3.5-4.5% in the industrial west) will always volunetarily quit their jobs for a variety of reasons. (Hate their job, move, go to school, etc)

If you figure it out, you win a nobel prize. So there is a lot of incentive for you.


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Re: Possible ways to fight the looming problem of unemployment

Postby nitePhyyre » Sat Sep 12, 2009 10:14 pm UTC

Ixtellor wrote:To the OP.
You might be better served trying to arrive at the natural rate of unemployment.
You can't have 100% employment because X % (Most think 3.5-4.5% in the industrial west) will always volunetarily quit their jobs for a variety of reasons. (Hate their job, move, go to school, etc)

If you figure it out, you win a nobel prize. So there is a lot of incentive for you.

I'm still going with the 100% unemployed with robots doing all the work. :lol:
sourmìlk wrote:Monopolies are not when a single company controls the market for a single product.

You don't become great by trying to be great. You become great by wanting to do something, and then doing it so hard you become great in the process.

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Re: Possible ways to fight the looming problem of unemployment

Postby Vaniver » Mon Sep 14, 2009 6:51 pm UTC

Scarcity means very, very different things. Imagine telegrams and texts, for example- there still is a technological limit to how many texts can be sent, but it's higher than the limit of the number of texts people want to send, rather than the technological limit to the number of telegrams that could be sent in 1880. The economic model for them is rather different- for the telegraph, the company that built the infrastructure charges you per usage, and the cost is high enough to dissuade some usage to keep the usage below the limit. For texts, the company that built the infrastructure charges you a subscription fee (or, if you use a very low number of texts, charge you per usage, mostly to encourage you to get the subscription), and then lets you text as much as you want, because there's no need to limit usage.

Just because I've got a virtually unlimited telegraph office in my pocket doesn't mean that the telecommunications industry is obsolete- and that's what scarcity is going to look like in the future.
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Re: Possible ways to fight the looming problem of unemployment

Postby Ixtellor » Tue Sep 15, 2009 1:47 pm UTC

Vaniver wrote:Scarcity means very, very different things. Imagine telegrams and texts, for example- there still is a technological limit to how many texts can be sent, but it's higher than the limit of the number of texts people want to send, rather than the technological limit to the number of telegrams that could be sent in 1880. The economic model for them is rather different- for the telegraph, the company that built the infrastructure charges you per usage, and the cost is high enough to dissuade some usage to keep the usage below the limit. For texts, the company that built the infrastructure charges you a subscription fee (or, if you use a very low number of texts, charge you per usage, mostly to encourage you to get the subscription), and then lets you text as much as you want, because there's no need to limit usage.

Just because I've got a virtually unlimited telegraph office in my pocket doesn't mean that the telecommunications industry is obsolete- and that's what scarcity is going to look like in the future.


Yes but in both scenarios, the scarity is the machine. There are a lot more machines today, but they are still scarce. And since activation is a necessary componant of the machine, they become even more scarce.

Good point, but not the perfect example IMHO.


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Re: Possible ways to fight the looming problem of unemployment

Postby Zauderer » Tue Sep 15, 2009 2:27 pm UTC

Vaniver wrote:If you're worried about mechanization, make it cheaper to hire people. You don't need to give a French machine five weeks of vacation a year, but you do need to give a French person that. Decisions are made at the margin.


Yeah. Because it makes for a better society when everybody works long hours doing menial tasks for almost no pay.

I believe trying to stop mechanization and outsourcing to countries where labor is cheaper is futile and unnecessary. All you can do is lowering standards - it might lead to lower unemployment, but you'll still have a lot of people you need to subsidize for no economical gain. It makes more sense to concentrate on jobs that can't be mechanized or outsourced (yet). An US bus company needs bus drivers in the US, not robots or bus drivers in China.

In sum: don't increase demand, reduce supply. Have 30-hour work weeks (without reduction in pay). Eight weeks of vacation per year. Subsidized sabbaticals. Subsidized colleges and universities and stipends for students. Make education mandatory until age 18. Allow retirement with 55.

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Re: Possible ways to fight the looming problem of unemployment

Postby zug » Wed Sep 16, 2009 12:16 am UTC

Zauderer wrote:
Vaniver wrote:If you're worried about mechanization, make it cheaper to hire people. You don't need to give a French machine five weeks of vacation a year, but you do need to give a French person that. Decisions are made at the margin.


Yeah. Because it makes for a better society when everybody works long hours doing menial tasks for almost no pay.

I believe trying to stop mechanization and outsourcing to countries where labor is cheaper is futile and unnecessary. All you can do is lowering standards - it might lead to lower unemployment, but you'll still have a lot of people you need to subsidize for no economical gain. It makes more sense to concentrate on jobs that can't be mechanized or outsourced (yet). An US bus company needs bus drivers in the US, not robots or bus drivers in China.

In sum: don't increase demand, reduce supply. Have 30-hour work weeks (without reduction in pay). Eight weeks of vacation per year. Subsidized sabbaticals. Subsidized colleges and universities and stipends for students. Make education mandatory until age 18. Allow retirement with 55.

And where does the money for these programs come from?
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Re: Possible ways to fight the looming problem of unemployment

Postby Yakk » Wed Sep 16, 2009 2:27 pm UTC

An US bus company needs bus drivers in the US, not robots or bus drivers in China.

No, a US bus company needs robot bus drivers. The robot makers just haven't built the robots that can drive buses yet.

...

Unemployment is caused because those with money don't desire anything from those who are unemployed, at least not enough to bother paying them enough money to make the unemployed people do the thing for money.

This is independent of the problem of not having enough resources to provide for the people who are unemployed -- the question "where does the money come from" is answered by "from those with money".

Now, there is some overlap. When you take away a large percentage of the money you earn for doing any task in order to provide for other people, and you provide for the unemployed really well, you decrease the threshold of "what I will do for money". This increases unemployment, and makes money worth less (as you can convince people to do less stuff in exchange for your money).

Other processes make money worth more -- if people are far more efficient when they do work, this makes money (all other things being equal) worth more.

But imagine a situation where we have a relative handful of people -- less than 1 in 1000 -- who have the majority of money. They have limited needs -- they can live in luxury using only a small fraction of their money at any one time. The rest of their money they don't have a need to spend.

If they stick the money into a sock, then they reduce the money supply, which increases the price of money to make up for it (roughly), with the fear that if there are too many socks that the system can be flooded with money later (which depresses the price of money).

Suppose they invest that money. Then they are trying to figure out ways to spend money to make money later. But the thing is, most of the money is owned by people who don't have any real need for money. The rest of the population only has a small amount of money. So they have to figure out a way to get money out of a stone. One way to do this is to lend money to the rest of the population, then demand that they pay back that money later -- lend money to the population, giving them more money to spend, then fund the building of goods to sell to the population, and make a profit off of this.

However, the population you lend money to needs to somehow get more money, or they cannot pay off your loan (remember that?). You can kite for a period of time -- lend them more and more money in order to make your investments in factories and good production profitable -- but eventually you need to figure out what the population can do for the people with money, or redistribute the money to the population in some way. Or you could exponentially increase the size of the money economy (be it by inflation, immigration, birth, increases in efficiency and salary, etc).

Another approach is to move money from those who have it, to those who do not, via whatever means (charity, taxation, robber, revolution).

...

Or another way of looking at it: unemployment is caused when people with money don't want the worker's efforts. Poor people are people who desperately want money to get other people to do things. Giving money to poor people thus helps unemployment -- on the other hand, poor people tend to be more desperate about earning money, so giving them money increases unemployment as they decide not to be employed.

My earlier post was an attempt to give poor people money (and the poor are more likely to want to hire others to do things), while not massively discouraging them from working with ridiculous marginal disincentive rates (welfare claw-backs).
One of the painful things about our time is that those who feel certainty are stupid, and those with any imagination and understanding are filled with doubt and indecision - BR

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