Unemployment—Why?
IN SEVERAL countries many people are forced to support themselves by hard physical work for long hours at an exhausting pace, perhaps even doing a dangerous job for little pay. Until recently many in other lands were certain that once hired by a large company or by a state-run department, they would have a secure job until retirement. But today there no longer seem to be businesses or corporations that are able to offer desirable employment and security at any level. Why?
Reasons for the Problem
Thousands of young people cannot even find their first job—whether they have a college degree or not. In Italy, for example, more than a third of the unemployed are people between the ages of 15 and 24. The average age of those who are already working and are trying to keep their jobs increases, and so it is more difficult for young people to get into the labor market. Even among women—who are more and more present in the labor market—there is a high rate of unemployment. Thus, an exceptionally large wave of new workers is now struggling to be absorbed.
From the time of the first industrial machines, technical innovation has reduced the need for workers. In the face of long grueling shifts, laborers hoped that machines would reduce work or even abolish it. Automation has increased production and has eliminated many dangers, but it has also reduced jobs. Those who become redundant risk long-term unemployment unless they learn new skills.
We risk being submerged by an overabundance of commercial products. Some feel we have already reached the limits of growth. In addition, with fewer employed, there are fewer buyers. The market thus produces more than can be consumed. No longer economically viable, large plants built to handle expected increases in production are being closed down or converted. Trends like these reap victims—those who become unemployed. In economic recession, demand for workers diminishes, and jobs lost during recessions are hardly ever re-created during times of expansion. Clearly, unemployment has more than one cause.
A Social Plague
Since it may strike anyone, unemployment is a social plague. Some countries provide various mechanisms for safeguarding those who are still working—for example, a reduced workweek with reduced pay. This may, however, damage the prospects of others looking for work.
Both the employed and the unemployed protest more and more frequently about job-related problems. But while the unemployed call for new jobs, the ones having a job try to protect their own security—two objectives that are not always compatible. “Those with a job are often invited to work longer hours. Those who are out stay out. There is the risk that society may split in two . . . on the one hand, the superemployed and on the other, the alienated unemployed, who are almost completely dependent on the goodwill of the others,” says the Italian magazine Panorama. In Europe, say experts, the fruits of economic growth have been absorbed principally by those already working, rather than by the jobless.
What is more, unemployment is tied to the state of the local economy, so that in certain nations, such as Germany, Italy, and Spain, huge differences exist between the needs of one area and those of another. Are workers willing to learn new skills or even to move to another area or to another country? This can often be a decisive factor.
Are There Any Solutions in View?
For the most part, hopes are set on an economic upturn. But some people are skeptical and think that such an upturn will not occur until about the year 2000. For others, recovery has already begun, but it is slow in producing results, as is evident from the recent drop in employment in Italy. Economic recovery does not necessarily mean a reduction in unemployment. While growth is modest, businesses prefer to utilize better the staff they already have rather than to employ others—that is, there is “jobless growth.” Further, the number of unemployed often grows faster than the number of new jobs created.
Today national economies are undergoing globalization. Some economists think that the creation of great, new supranational trading areas, such as those of the North American Free Trade Agreement (NAFTA) and Asia-Pacific Economic Cooperation (APEC), may also give impetus to the world economy. However, this trend induces large corporations to establish themselves where labor is cheaper, with the result that industrialized nations lose jobs. At the same time, workers who are not as well-off see their already meager earnings diminish. It is no coincidence that in a number of countries, many have demonstrated, even violently, against these trade agreements.
The experts suggest many recipes for fighting unemployment. Some are even contradictory, depending on whether they are suggested by economists, politicians, or workers themselves. There are those who propose offering companies incentives to increase personnel by reducing the tax burden. Some advise massive state intervention. Others suggest distributing work differently and reducing hours. This has already been done in some large companies, even though during the last century, the workweek has been systematically reduced in all industrialized nations without a reduction in unemployment. “In the long term,” maintains economist Renato Brunetta, “every policy turns out to be ineffective, with costs that exceed benefits.”
“We should not delude ourselves,” concludes the magazine L’Espresso, “the problem is difficult.” Too difficult to resolve? Is there a solution to the problem of unemployment?
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An Ancient Problem
Unemployment is an old problem. For centuries people have on occasion found themselves involuntarily without work. Once the job was finished, tens of thousands of workers used in large construction projects then became unemployed themselves—at least until they were absorbed elsewhere. In the meantime they led a rather precarious existence, to say the least.
During the Middle Ages, “even though a problem of unemployment in the modern sense did not yet exist,” the unemployed did. (La disoccupazione nella storia [Unemployment in History]) In those days, however, any who did not work were considered, more than anything else, to be good-for-nothings or vagabonds. As late as the 19th century, many British analysts “associated the unemployed primarily with the ‘roughs’ and vagrants who slept out or walked the streets at night,” explains Professor John Burnett.—Idle Hands.
The “discovery of unemployment” took place near the end of the 19th century or the beginning of the 20th. Special government commissions were instituted to study and resolve the problem, such as the Select Committee of the British House of Commons on “Distress From Want of Employment,” in 1895. Joblessness had become a social plague.
This new awareness grew dramatically, particularly after the first world war. That conflict, with its frenetic arms production, had practically eliminated unemployment. But beginning in the 1920’s, the Western world faced a series of recessions culminating in the Great Depression that began in 1929 and struck all the industrialized economies of the world. After the second world war, many countries experienced a new economic boom, and unemployment dropped. But “the beginnings of today’s unemployment problem can be traced back to the mid-1960s,” says the Organization for Economic Cooperation and Development. The labor market suffered a new blow caused by the oil crises of the 1970’s and the computerized information explosion with its consequent layoffs. Unemployment has begun a relentless ascent, cutting into even those white-collar and managerial sectors once considered secure.
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Demanding more jobs will not solve the unemployment problem
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Reuters/Bettmann