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Sunday, September 19, 2010

Unemployment:

The real cause of unemployment is because the effort it takes to do the job is no longer worth the pay offered for the job.  If a job is going unfilled, it means wages aren't high enough to attract potential workers.  If you can't raise wages because then the endeavor would be unprofitable, the economy is signaling that the work simply isn't worth doing and shouldn't be done.  Therefore both sides, the employer and the employee, agree that unemployment is superior to the work offered.  There is no reason to 'stop unemployment,' because unemployment is the healthiest alternative out of the three options.  The only way to reduce unemployment is to force people into one of the other two categories -- money-losing make-work, or inhumane slave labor.  Giving additional wages to low-wage work, like the earned income tax credit, is a subsidy, it artificially adds value to work that isn't worth doing and thus shouldn't be done.  If it isn't profitable to put lots of effort into an activity in the private market, making it worth the worker's while by sweetening the deal with subsidies only distorts the market.  The work, in fact, isn't worth doing and thus shouldn't be done.

The only way to raise the value of labor is the law of supply and demand.  If the supply of labor so exceeds demand that demand can only offer paltry wages to prospective employees, needing government mandates and subsidies to buttress their offers, then the market is unbalanced and inefficient.  The solution isn't to keep adding on more and more government programs to make work worthwhile, the solution is to reduce the supply of labor until it no longer exceeds demand.  The easiest way to reduce the supply of labor is to pay a citizen's dividend to those both in and out of the workforce, creating a viable alternative to work.  Then everyone whose work wasn't worth much in the first place will be content with the citizen's dividend and cease trying to find non-existent work.  The supply of labor will dramatically decrease, and then demand will have to start competing with higher wages for the remaining supply, thus giving those who are employed much better deals.

Another easy way to reduce the supply of labor is government pushing of birth control, especially for unmarried, poverty-stricken, low-IQ teenagers.  The school system could easily include within its normal roles the administration of birth control shots that work for six months at a time, thus preventing all pregnancies until these irresponsible mothers at least reach eighteen.

Another easy way to reduce the supply of labor is to end all immigration.  So long as immigration continues to pour in more ready, willing, and able workers, the supply of labor will always exceed the demand.  Basically, there aren't enough useful jobs in America to employ everyone at decent living standards-enabling wages.  This means we either have to turn into a third world country with third world living standards-enabling wages, or reduce the number of Americans until the value of labor meets a first world living-standards wage floor.
https://www.cia.gov/library/publications/the-world-factbook/geos/ja.htmlJapan has a low birth rate, no immigration, and high wages for even its worst jobs.  The GINI index for Japan is amazing.  The richest 10% of Japanese are only four times as rich as the poorest 10%.  Unemployment is 5%.   

Because people don't understand the law of supply and demand, they keep making stupid decisions to fight unemployment.  They think we just need to find more jobs people can do, or train people with more skills, or give work more subsidies in order to encourage work over welfare.  But if a job were really worth doing, the private market would already be paying top dollar for it to be done.  Any genuinely profitable job that a company would benefit enormously from, you can bet they would already be scouring the country for workers who would do it and pay top dollar for it to be done.  What the economy is signaling is that there are no such jobs, or no one is creative enough to think of them even if they are there.  Nor is there a lack of education in America to fill these 'phantom' jobs.  We have three times as many Ph.D's as we have job offerings for Ph.D's.  College education and unemployment are both at all time highs in America.  If education reduced unemployment, why is there no correlation between the two?  The dirty secret is that college does not prepare anyone to do useful work, and is thus irrelevant to the job market.  But even supposing college was a jobs training center that churned out nurses, doctors, electricians and the like, that would only make matters worse.  Think about it, none of these jobs pay very well in the first place, so if you flooded them with new supplies of workers, you would just make the entire field below-living-standards wages just like we've done with unskilled labor.  If you make all of our unskilled labor skilled, you create the exact same supply to demand glut you had before, only now the skilled labor wages are gutted and, apparently, the unskilled labor wages would start paying top dollar.  There are no wage signals showing that America could support twice as many nurses at the same wages they are paid today, or twice as many electricians, or twice as many car repairmen.  In fact, wages across the board have remained stagnant since 1970 except for the top 1%.  I suppose America could always use more financial analysts and derivatives traders, but that's the same as saying there's always a high wage for thieves -- it hardly helps the economy as a whole if everyone chooses that method of employment.  No job has been in such high demand that we've seen a wage bubble that would encourage workers to train in that field, gain said job, and thus compete over the wages and slowly lower them back to the standard course.  The last time we saw that phenomena was software engineering ten years ago, and America solved that by hiring cheap Indians from overseas.

You could say a country has reached a 'saturation' point when wages are not increasing rapidly anymore.  Basically, if there is no where in the country that isn't competing for hires by raising wages, the population has reached an equilibrium with the amount of useful work available in said country.  A country's 'useful work' is related to the natural resources it can exploit, the quality of its infrastructure, the quality of its laws, and the intelligence and virtue of its citizenry.  No matter how high you set these parameters, eventually the population will rise to meet this level and then all further workers are by default unemployable.  If a nation does wish to raise employment, it should concentrate on the factors above -- go conquer an empire in war and thus expand your claim to natural resources, or build better internet broadband and electric grids, or simplify the tax code and ban harassment lawsuits, or use eugenics to nurture the quality of our future generations.  Subsidizing work is not a lasting solution, it just kicks the problem down the road.  Education is not a solution, because education has no real value.  'Freedom', whatever that means, is not the answer, because freedom just means more illegitimate children and more low-quality immigrants continuously overpopulating an already overpopulated, employment-saturated country.

This gives a new reason to push for lower populations.  Not only are we overusing our natural resources, using up long-stored reserves that we can never get back of nutrients, topsoil, water, fossil fuels, phosphates, etc, but our job market is flat and wages haven't risen for thirty years.  The best thing that ever happened to wages in Europe was the black plague.  The only way to give our country full employment at first class living standards is to pursue something like the black plague -- stop immigration, deport the illegals, push birth control as hard as you can, and stop providing endless health care to the elderly.  We will know when population has returned to a sustainable level -- not only will we stop consuming resources we can't restore to Nature on an annual basis, but we will see a tight job market offering high wages and full employment to all high school graduates and above.  Useful work, capable of supporting a whole family, on a single income, was possible for high school graduates of the 1950's.  Then we went and tripled the population of the United States, and lo and behold, even two-income college graduates can't afford a home.  Could we possibly learn a lesson from this?  Is the lesson really "improve the schools"?  Is it really "lower taxes?"

Isn't it time to make a genuine difference for our children, and give them a hopeful future of full employment and high wages, like our ancestors before us?

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