There is, evidently, plenty of agricultural work available in the state of California these days. It's hard work--the type of work most of humanity throughout history had little choice but to perform. And by modern standards, the pay is not that great ($10.25/hr); though our distant ancestors might have considered it astronomically high. Indeed, it is high enough even today to attract a large body of foreign workers (largely from Mexico).
What is it that makes a foreign worker willing to go through all the risk and expense of taking such jobs, when an unemployed domestic worker will not?
A labor economist might answer this question by appealing to differences in reservation wages (an individual's reservation wage is defined to be the lowest wage he or she is willing to work for). Evidently, Mexican migrants have low reservation wages relative to their American counterparts. Another way of saying this is that the former group are relatively "desperate." Yet another way of saying this is that American workers can better afford spells of unemployment--they are generally wealthier, and many can draw on UI to make their job search less painful (and presumably, more productive too).
What interests me about the anecdotal evidence reported in this article is what it implies about theories that explain the current high rate of U.S. unemployment as the consequence of a "lack of aggregate demand" leading to a lack of available jobs. I am not sure how well this hypothesis squares up against the sort of evidence reported in this article. On the surface, at least, it appears that jobs are clearly available; Americans just don't want them--they are searching, or waiting, for better opportunities to arise. To me, the rise in unemployment smacks more of mismatch following a structural realignment of sectoral demands, as opposed to an overall decline in aggregate demand (the latter might explain the decline in employment, but not necessarily the increase in job search activity).
Update 1
When I posted this, I was unaware of Paul Krugman's article this morning: Structure of Excuses. Steve Williamson comments on Krugman here: It's the Housing, Stupid. This is certainly shaping up to be an interesting debate. I would love to see Kocherlakota and Krugman square off against each other in a public debate, but that's not likely to happen any time soon. Too bad.
Update 2
I have work to do, really I do. But I can't quite lay this to rest just yet. Krugman does not put much currency in the "structural" unemployment view. He says:
After all, what should we be seeing if statements like those of Mr. Kocherlakota or Mr. Clinton were true? The answer is, there should be significant labor shortages somewhere in America — major industries that are trying to expand but are having trouble hiring, major classes of workers who find their skills in great demand, major parts of the country with low unemployment even as the rest of the nation suffers. None of these things exist.Well, I'm not sure if none of these things exist as he claims. Consider, for example, this WSJ article: Some Firms Struggle to Hire Despite High Unemployment. Here is an excerpt:
In Bloomington, Ill., machine shop Mechanical Devices can't find the workers it needs to handle a sharp jump in business. Job fairs run by airline Emirates attract fewer applicants in the U.S. than in other countries. Truck-stop operator Pilot Flying J says job postings don't elicit many more applicants than they did when the unemployment rate was below 5%.I read this and I ask myself why Krugman would think you or I an idiot for giving any credence to what Narayana is talking about? Or how about this:
Matching people with available jobs is always difficult after a recession as the economy remakes itself. But Labor Department data suggest the disconnect is particularly acute this time around. Since the economy bottomed out in mid-2009, the number of job openings has risen more than twice as fast as actual hires, a gap that didn't appear until much later in the last recovery. The disparity is most notable in manufacturing, which has had among the biggest increases in openings. But it is also appearing in other areas, such as business services, education and health care.
Hmm....that "Stuck in the Middle" figure sure looks like a negative aggregate demand shock alright. Or how about the next figure? How can it be that firms (not the government, you will notice) are having trouble filling their openings? Where does this show up in Krugman's IS-LM model, I wonder? Just asking.Here is some more stuff: America's Strongest Job Markets. But of course, it should not be possible to rank domestic job markets in this manner...it's aggregate demand, stupid.
What am I missing here? Is there a legitimate debate to be had, or not? Krugman appears to think not. He is acting more like someone who wants to stifle debate, rather than promote it.
Caveat emptor, I guess.
David,
ReplyDeleteNaturally, I can't find the article now, but in the WSJ a few weeks ago there was a story about the middle-skill employment gap. The essential part is that the demand for people with so-called "middle skills" far outstrips the supply. Middle skills are defined as high-school algebra (real, not watered down), and ability to do "hands on" work. Like steel factory foreman or skilled laborer (carpenter).
Those jobs are available, but people with those skill sets are not. This is a long-run mismatch, a little different from what you're talking about. But, it leads me to the next point. Firms with these needs are trying to train people, but many are dropping out of the training programs as they wait for jobs to come back. UI benefits are supporting a higher reservation wage, in other words.
That's the article!
ReplyDeleteThe interesting question is the source of the gap. Although I have some thoughts on that issue too.
David,
ReplyDeleteWhat do you think of this argument for why firms can't find people to hire: people are tied down to their houses.
Basically, with ownership you are tied to the house much more than if you rented. People who own houses are, on balance, more likely to be locked down to a geographic area and wait for the job market to pick up where they already are than renters. So, this mismatch may be yet another result of misguided attempts to increase homeownership in America. I don't think it's the only factor, obviously, but it might be a big one right now.
Prof J:
ReplyDeleteSurely, there is something to this argument, though I agree that it cannot be the whole story. Steve Williamson recently posted on this here: http://newmonetarism.blogspot.com/2010/09/sectoral-reallocation-and-housing.html
David,
ReplyDeleteSteve has a good post, and generally nice blog.
What impresses me most, though, is his patience in dealing with rude nitwits in the comments section.
Here's the problem I have with the "structural unemployment" argument. It a post facto argument. It implies that this mismatch was there before and we didnt know it (those darn crystal balls.... who MADE those things any way?!)
ReplyDeleteWas anyone, who is now making this argument, telling everyone in 2007, "Hey, there is about to be a huge loss of jobs and your current skills are going to be mismatched to the job your going to need after this one goes away!" ?? No. Everyone (except the MMT crowd and Peter Schiff oh and Nouriel Roubini) was praising the great moderation and the bull market.
All the unemployed people now had jobs two years ago that they were fit to do skill wise, education wise etc. What happened? Everyone would still be employed in what they were doing (likely) if people who failed to make payments had more income then, right? It was a lack of ability by some consumers to continue making payments that precipitated the financial crisis, which led to state and local govts having higher funding costs and deciding to cut services (layoffs). These layoffs and the layoffs in construction (and ancillary to construction) sector ended up putting stresses on the retail sector......... I know you know the story but sometimes I think we need to retell it again and again. It was a financial crisis that caused all the upheaval, not any kind of structural mismatch.
This argument seems to be assuming that the poor structure was there all along and has been unearthed by this crisis. What about the idea that this poor structure is the result of this crisis? The structure was fine until finance blew up the place.
Greg:
ReplyDeleteYou ask some very good questions.
There is, in fact, a long tradition in macroeconomic theory (beginning at least with Schumpeter, and no doubt before) that stresses the role of "creative destruction" and costly sectoral/occupational reallocation and, more generally, the "cleansing effect" of recessions. No one pretends to know exactly when changes in technology, trade laws, price bubbles, etc., are likely to take place; but we can predict in general terms what will typically happen once a dramatic shock hits the economy.
You ask what happened? Well, obviously, we had a severe decline in the price of a very important asset class (real estate); a shock that reverberated throughout the financial system.
One interpretation is that while residential investment looked good from an ex ante perspective, it turned out to be a bad investment ex post. As the construction sector tanked, related sectors contracted alongside (this happens in a standard RBC model, see Long and Plosser, JPE 1983, for example). Intersectoral linkages of this sort can generate what looks like a negative "aggregate demand shock." I've worked in the construction sector myself, got laid off in 1982, and know how this feels like at a personal level. This is when I went back to school (a sectoral reallocation of labor).
Your last sentence: The structure was fine until finance blew up the place. Question: what if the heath of the finance sector simply reflects the underlying characteristics of the real sector? Or do you think that the finance sector operates independently of real considerations? Perhaps the sector is controlled by Martians? (No disrespect intended to all you Martians out there!)
Greg and David,
ReplyDeleteNot for nothing, but the basic assertion of the Austrian theory is that the bust is because of structural problems.
I think that if you go back and examine the data, the middle-skill mismatch has existed for a while. Certainly where I live the manufacturing firms have always had a hard time finding good people for the middle-level jobs, like factory foreman and press operator and whatnot.
The main victim, if you will, of the boom was construction. People were drawn in to housing construction jobs because of overdevelopment in that market, and away from other jobs they might have taken. As housing construction has fallen off, those jobs have gone away. But the trick is, they were never "sustainable" in the first place. True demand was never there. It was a misdirection of resources that caused a boom, and now a bust.
David
ReplyDeleteWasnt the severe decline in the important assets' price caused by something? Caused by people unable to service their mortgages and having to default.? Caused by credit levels beyond what income levels could support? If incomes were say 10% higher would there not have been fewer defauts a smaller, fall in prices and a sector that didnt look so out of balance?
To be sure, there was also a lot of speculative activity in housing. Using it as wealth generating tool rather than a shelter was the MO of waaay too many people.
What IF the financial sector simply reflects the underlying characteristics of the real sector? Its obviously a reflection, nothing gets financialized that isnt real or quantifiable. The real question is how accurately does it reflect. Considering what the financial sector is able to do with derivatives I think the reflection can end up being distorted and amplified, not necessarily an arithmetic relationship but more a logarithmic. As has been noted by many, a simple blow up in subprime AND house flippers wouldnt have caused this level of financial distress on its own, if our financial system were properly hedged.
So I am saying it does reflect because it needs "real" things to financialize but that it is now capable of operating on a new level completely outside the real economy, becoming largely destabilizing and predatory. Especially since the financial system is global and can synthesize CDSs, essentially selling insurance to people who dont own the thing being insured.
Greg:
ReplyDeleteOK, so your view is basically "bad behavior in the financial system caused our mess." There is, no doubt, some truth in this (though I believe the blame should be distributed much more widely).
But this is all off topic, is it not? Your initial query was doubting the "structural" unemployment hypothesis.
Well the financial system covers a wide swath for sure so its not really a narrow claim. The financial system involves insurance Cos, ratings agencies, brokerage firms, banks, GM and Ford financial. This involves over 50% of the Dow valuation.
ReplyDeleteI think this is exactly in line with my claim of doubting structural unemployment, at least as its presented. The structure that is/was bad is/was not the labor structure as much as the capital structure. The supply side is/was the screwed up structure and it wrecked the labor side.
In thinking about your earlier question some more...
" what if the heath of the finance sector simply reflects the underlying characteristics of the real sector? Or do you think that the finance sector operates independently of real considerations?"
is this not asking me if prices reflect real value? Finance is all about prices is it not? Nothing gets financialized unless it can be priced, so it seems your asking me if I think prices ARE real value. I say yes they are, because prices are the only way in a financialized economy we can measure/quantitate value. There is no other way.
Greg:
ReplyDeleteWell, I can't tell if we're agreeing with each other or not.
I contend that, ex post, there were too many workers allocated to the residential construction sector (to take just one example). We can debate why this happened, but let's take your view and assume it was primarily the fault of the financial sector (broadly defined to include the Fed).
Now, something happens. People cannot pay their mortgages, etc. The price of housing reflects this sudden change in economic fundamentals. Asset prices collapse. Construction workers lose their jobs.
Is it your contention that these construction workers should, in fact, continue to build homes? And that the reason they are not presently doing so has nothing to do with any "structural" change (a change that requires a reallocation of labor across sectors)?
If that is what you think (and please correct me if I have mischaracterized your views), then I think you're wrong. (Or, at least, not entirely correct).
Hey David
ReplyDeleteI would have liked to respond sooner but sometimes work gets in the way of my leisure time ;-)
Obviously to simply tell the construction workers to build homes that no one is buying would be...... wasteful..... silly.... but there is no doubt that plenty of them could be put to work making many existing homes more energy efficient or just repairing and increasing the value of existing homes. So I guess I'm arguing that people with construction skills are no less in demand now than 3 yrs ago IF you measure the "demand" of construction workers by the amount of things that need building/ remodeling, separate from wether or not a private party CAN pay for it now. There is a NOTIONAL demand that doesnt have the NOMINAL means, is part of my argument. So is there a way to make that notional nominal, and I say yes. Is it "perfect" in its utility..............NO. But OBVIOUSLY it is not uncommon for our want-to to supercede our can-do to varying degrees.
So the reason those home construction workers are no longer doing home construction is largely because the home construction business owners were unable to transition to the home improvement business. Mostly because they lost their asses in some of their home construction ventures and became financially constrained.
I guess where the "structural unemployment" argument sticks in my craw as well is that its another example of "blame the victim"; "You just arent smart enough" "You just arent skilled enough" "You just arent flexible enough" "You're too expensive" The thing is, there was a day in 2007/2008 when none of their bosses would have said that to them, and 24 hrs later?.......................... Does every worker need to be like the guy in the Dos Equis commercials (You know the guy who would hit you and you would have to suppress the urge to say "Thank you") for us to have a healthy economy?
I know that shit happens, but it doesnt happen because the "loser" just aint good enough.
There has been a steady and, according to some people, a systematic decrease in the buying/bargaining power of the middle class worker over the last few decades and these workers have increasingly used debt to live to the standard they were used to living without the debt. Well the debt bubble broke, and that debt WAS the demand and its now absent.
I'm not trying to make the argument that if we just get everyone some income, any way possible, everything will be hunky dory, I am however saying that it would be a huge first step to restoring some growth AND that only one entity CAN do that.
Greg,
ReplyDeleteYou make a good point about the construction workers and transitioning to home improvement. This can be hard, depending on state regulations (some are pretty strict about licensing).
Now, I think you can imagine how painful this is for me to say, being an anarcho-capitalist, but I do see a role for government here at this time. In particular, I think we the people should offer travel/relocation grants for construction workers, and others, who have skills that are in demand somewhere in the U.S., but not where the workers actually are.
That was hard to say, and I maintain it was government intervention that got us into this fix.
Greg:
ReplyDeleteWork -- scourge of the leisure man. ;)
Well, I usually have some sympathy for what you say, but given that our self-described anarcho-capitalist Prof J is leaning your way, I feel compelled to play devil's advocate.
[1] You say that having construction workers continue to build homes would be wasteful and silly. You realize that the standard "Keynesian" prescription really does not care -- things would be better if we simply paid these people to dig holes and fill them up again.
[2] Your argument about simply reassigning construction workers across activities is noble, but reveals to me that you probably do not know much about the construction sector. I worked for many years as a journeyman taper (drywall finisher). It would have been very difficult to make me into an electrician, or pipe fitter, or tin basher, or carpenter, or even dry waller, for that matter. These construction skills are not as substitutable as you suggest. And that's just within the construction sector!
[3] There is no logical connection between the "structural unemployment" view and "blaming the victim." This is a figment of your imagination. We are supposed to be scientists here. Let's try to figure out what happened, before offering solutions. Much of what you say has merit. But there's probably more to it than that.
Not sure I see how this post refutes the deficient demand story. What I mean is, has their been an increase in the demand for agricultural workers in California? Presumably not.
ReplyDeleteSo, while the fact that this sector continues to employ Mexicans instead of Americans is interesting it's beside the point. Surely the appropriate response is to recognize that those Mexicans are part of the American labour force and so if Americans replace them in these jobs that's not an increase in employment.
If you want to say that the unemployment is due to the problem of real frictions interferring with a sectoral reallocation then you need to show which sector is out there trying to expand employment relative to what it was when economy wide unemployment was under 5%. I don't think you've done that.
The defficient demand story just says that there are, in aggregate, fewer jobs available at the prevailing wage (whether it's too high or not is a different argument). That appears to be true.
Just read to the bottom (the updates). In update 2 you're getting somewhere with the graph about openings and hires from July 09 to June 10.
ReplyDeleteStill, there isn't enough information here to refute the defficient demand story. We need to know if total labour demand is as high as when economy wide unemployment was under 5%. In particular, manufacturing probably had a big drop off during the worst of it so there may still be fewer total manufacturing jobs available. If that's the case then though the graph shows the mismatch story to be relevant, it doesn't refute the deficient demand story.
Also, the fact is that even in the employment boom you could probably always find one sector that had lots of openings and few hires. Nobody ever said that their were no search frictions at all.
Adam P:
ReplyDeleteI was not offering this anecdotal evidence as leading to any definitive conclusion. It is suggestive, however, in the sense that there are employers seeking to expand their (American) employment base in a particular sector, but being unable to do so at the wages they are offering.
Your concluding paragraph is so way off as to deserve a separate post. Even in an RBC model, there are fewer jobs available at the prevailing wage. Deficient demand theory says more than you suggest here.
yes, you're correct about my last paragraph, though that's beside the point.
ReplyDeleteDavid
ReplyDeleteWhen I say wasteful and silly I mean wasteful of "real" resources and silly because those skills are still needed elsewhere. The digging and refilling of holes would waste NO resources, would provide exercise, an income and 8 hours of non destructive behavior. I AM NOT advocating we start such a program (I have much more imagination than that) but as Bill Mitchell quips, even in such a program they would be no LESS productive than NOW. Especially if they signed up voluntarily.
Interestingly enough many places are talking about tearing down some of the over supply of houses. How 'bout THAT private sector program, build houses for $100/sqft in 2007 and tear em down in 2010!! Could anyone argue that the salaries which were made in the process of building those houses, the laborers, the real estate agents, the bank loan officers, the developers, the insurers were NOT stimulatory at the time? Did they not bring forth real production when they went out and spent their money??
So IF you agree that these glorified hole diggers/fillers were in fact stimulatory and did bring forth real production with their salaries even by doing "work" we NOW judge to be unproductive, how could ANY make work program not have some productive value?
Greg:
ReplyDeleteThe validity of the Bill Mitchell quip depends on whether one views unemployment as "wasted resources" or "productive job search." (See my post on the subject).
Yes, how about that private sector building program (with incentives skewed by govt policy)? At least the resources acquired were done so by investors willing to gamble with their own money. An ex ante good investment turned out to be a poor one, ex post. So what? Now that the private sector wants to be careful, you propose that the government take other peoples' money and invest it for them?
The resource allocation problem is not solved simply by making people work. We know how to make people work. That is not the objective. The objective is to get peoples' skills properly matched to the best work available, and to get out of the way of businesses keen on creating good employment opportunities.
Unemployment is wasted resources, our people are our most valuable resource. Can you imagine an economy without people?
ReplyDelete" At least the resources acquired were done so by investors willing to gamble with their own money."
I hope you cringed when you wrote that. The risks were definitely NOT privatized but my real point was regarding the real production that was brought forth by the spending of those people over their time as employees. One can say in retrospect that there was some waste but real jobs were supported and created by these earned salaries. Money being spent BUYS things and it is ONLY sales which lead to job creation. If no one is selling anything no one is hiring anyone. I propose that the govt take THEIR OWN money and buy stuff with it. They dont need to borrow it FROM anyone! Thats where you're mistaken. Until the govy spends money, there isnt any in circulation. A bank only can issue DEBT.
The resource allocation problem isnt solved ONLY by making people work but making people work will maximize resource production. In a monetized economy things need to be sold. For something to be sold someone needs money to buy. To have money to buy you need to sell something (something you produced or a service you can do). There is only one buyer of last resort. Only one entity doesnt need to raise money to have money. We are not in ordinary times we need extraordinary answers.
Greg:
ReplyDeleteThe equilibrium unemployment rate may be too high or too low, but to equate full-time active job search with "waste" is going a little too far, I think. You should read my post on Theory Ahead of Language in the Economics of Unemployment.
No, I did not cringe when I wrote that. The risks may not have been privatized, but to the extent this was true, it is not the fault of the private sector.
I am familiar with the argument you present in your concluding paragraph. I have some sympathy for the idea. But there are other ways to interpret what happens in a recession. I guess I am just not as convinced as you that I know with certainty what afflicts our economy.
Economies have in the past recovered from deep recession without any intervention from the "buyer of last resort." Moreover, the first time the US economy went into prolonged depression was associated with intervention from the buyer of last resort. Interesting coincidence, don't you think?
Fulltime active job search that is most likely to be futile IS a waste. It wastes time, becomes demoralizing and results in no acquired income while costing the drainage of savings (those savings that Austrians and neoliberals find so valuable). There is like 6-8 to 1 of job applicants per job opening now.
ReplyDeleteWhy is it so hard for you and others to admit that there isnt enough jobs in the private sector? In fact there never has been. Its not a "failure" unless one insists on the private sector being the only employer.
What in my last paragraph is even remotely controversial? Do you not think people working are necessary to maximize resource production? Maybe you dont think the currently unemployed have anything to add to production but how will we know when they are absent from the workforce? Do you argue with my contention that things need to be sold in our economy? We arent simply engaged in fancy barter. Our monetized economy is as different from a barter economy as a monkey is from a horse. Do you argue that people dont need money to buy things? Can we acquire money without selling something? You say you have some sympathy with my ideas here but where am I treading on something even remotely controversial?
I'm not sure the fact that an economy recovered in the past without intervention from buyer of last resort is an argument against using buyer of last resort powers. People recovered from infections before antibiotics as well. Pre GD economies were first off not very well measured, were not exactly paragons of virtue regarding how workers were treated nor were they even remotely comparable in terms of complexity notably due to international trade factors. Now, you'll never hear me argue that our CBs have always operated in a totally consistent nor helpful manner BUT having a buyer and lender of last resort is quite a valuable tool if used properly. Especially when you understand the true nature of money (Problem 1, I think, is that too any people wrongly equate money to something like gold). Would you go back to a time where your bank deposits werent insured? You think that would lead to a better banking system?
Dont you think its also intersting that we had decades of stability financially til after the 80s when RR decided to try and undermine all New Deal programs. We then had S&L crisis, LTCM, Asian crisis, Mexican financial collapse, Enron and most recently GFC.
Greg:
ReplyDeleteIf fulltime job search is likely to be futile, it is not likely to be undertaken; the individual will either take a crappy job, or drop out of the labor market. In either case, the unemployment rate would decrease. People who are fixated on the unemployment rate as a measure of social welfare are not thinking straight.
You say "Why is it so hard for you and others to admit that there isnt enough jobs in the private sector? In fact there never has been."
It is difficult for me to say something like this because I have no idea what it means.
The history of humankind shows that work has always been plentiful and that leisure is wanting. When the pilgrims landed at Plymouth Rock, they did not get off the boat and ask "Where are all the jobs?"
In modern economies as well, work per se is not scarce. What is scarce are job opportunities that are judged to pay well. When I lost my high-paying construction sector job in the recession of 1981, I could have still found work (for example, delivering newspapapers). Instead, I finally chose to go back to school. Most of my unemployed colleagues continued to choose unemployment. I presume that they chose wisely (and indeed, things have worked out very well for most of them).
Now, the fact that there are jobs out there (and official job postings grossly understates the true number of available job opportunities) should not lead us to diminish the difficulties experienced by unemployed or underemployed workers. We have to think hard about the circumstances that lead people to choose unemployment and what might be done to help improve these circumstances. The simplistic notion that "there are not enough jobs, and that the government can create them" is shallow and misleading, in my humble opinion.
Why do you adopt, as a social goal, the desire to "maximize production?" U.S. employment rates have, until recently, been at historically high levels. Maybe there were too many people working. Generating market output is not the only ingredient in the recipe for happiness.
The sympathy I expressed for your thoughts revolve around the notion that the economy may find itself in a low-level equilibrium (along the lines expressed by Nick Rowe, in case you follow his posts at WCI). I can see how something like this might happen in theory. But I am aware of other theories that are broadly consistent with observation, and which lead to very different interpretations and policy conclusions. It is the knowledge of these competing interpretations that leads me to be more cautious in professing any definitive statements about what is wrong with the economy and what might be done to rectify the situation.
And so, I respect your opinion and think it should be taken seriously. But I am not going to accept your opinion as "self-evident truth." We have to be aware, and respect, the limits of our knowledge. There is still much to learn.
So unemployment isnt a measure of social welfare? More and more people failing to pay their mortgages, failing to be able to provide their families proper health care and nutrition ISNT a social welfare issue? I cant see how it is any other issue.
ReplyDeleteYour comment about the pilgrims would certainly be true if they came today. You're right about the 1600s but things are a little different now.
You seem to be arguing from the money as neutral veil idea, that our monetary economy is different from the real economy only in the fact that one has prices denominated in dollars. I cant see how there is any real lesson in how the pilgrims reacted in a time with no corporations, no timeclocks, no mass production, no cost of living and really almost nothing that can be compared to todays economy. They each grew their food and built their homes after that is was pure spare time activities.
I agree with this statement.. "In modern economies as well, work per se is not scarce. What is scarce are job opportunities that are judged to pay well"............ There is plenty to do but there is also a cost of living, just being able to exist that too many jobs dont meet.
Theres a real good test to do David. Start a JG program and see how many people sign up. Its totally voluntary. Assume that we CAN find a queue of jobs that communities will find valuable and then lets see how many are accepted. If no one signs up for the jobs than you are probably correct that people "prefer" unemployment. I'm betting you are wrong. People who are hired for good jobs are overwhelmingly already employed. Employers dont usually hire people without some record of promptness, good work habits or some verification of getting along with other employees. Being unemployed hurts your chance of finding a job in the future. Thats pretty well documented.
----------------------------------------
"Why do you adopt, as a social goal, the desire to "maximize production?"
I think the social goal is to maximize our participation. To try and help people discover their ........ purpose if you will. I have a hard time even defining production . A masseuse can be as "productive" as a miner.
Trouble is without a certain amount of income to begin with one cannot even begin to participate. Using a poker analogy, they are simply putting in the ante and being unable to play. Living is what happens after youve been fed, clothed, had healthcare and put a roof over your head. Before that you are just surviving.
I fail to see how there could have been too many people working, since even you have pointed out all the work that could be done. I totally agree about generating market output not leading to happiness. Do you not think there is a link between happiness and employment?
Thank you for taking the time to differ with me, you are very gracious and I feel you have been very respectful of where I differ from the orthodox view in these economic discussions. I am coming from a non economist background but I actually think that may give me some insights that people trained in the specialty have"learned" not to use. I know this, as a healthcare provider, I sometimes get questions/comments from patients and other non professionals that make me look at what I do very differently.
I agree there is much to learn. I also think there has been much truth ignored because its inconvenient politically. Mainly I'm speaking of how we treat money. I wish we could stop talking about not being able to afford things as a country and simply honestly discuss why we dont want to pay the price for certain things. One thing I do know is we have as much money as we want. Yes that will change "prices" but so what. Personally I think its time for the prices of some things to change.
Cheers
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ReplyDelete