Tuesday, September 21, 2010

Is Paying 10 Million People Not to Work Really a Good Idea?

Paying 10 million unemployed to be unproductive makes no sense for society or for the unemployed. There is much to be done, it just isn't paid. It's called The End of (Paying) Work.


Welcome to The End of (Paying) Work, when unemployment checks are mailed out to 10 million people so they can be unproductive and lose their job skills and habits.


Some economists such as Kenneth R. Beauchemin (senior research economist at the Federal Reserve Bank of Cleveland) are claiming that this "recovery" is consistent with previous post-1983 recessions.


I would suggest that looking at selected data from carefully selected timeframes can yield the conclusion you sought from the start, i.e. confirmation bias. I would also suggest that these economists step into the real world of corporate America and U.S. small business for a real-world lesson on employment trends.


Corporate America is not even halfway through downsizing. Anyone who thinks hiring is about to explode higher is not just in an ivory tower, they are wearing blinders and earphones in the dark cellar of the ivory tower. This is the story in much of corporate America: divisions are being consolidated, closed or sold, support staff are being laid off and replaced by temps, travel budgets are being trimmed further, etc. etc. etc.


Small business is hanging on by a thread. OK, so Twitter went from 200 employees to 250--whoopie. As I have often noted here, you have to be insane to add employees in this environment. Remaining employees are working longer and harder.


The solution? Require all unemployed drawing benefits to sign up for unpaid work at a non-profit, church, temple, city agencies desperate for volunteers, etc. The fiction is that the unemployed are devoting 40 hours a week to looking for work. Since there are so few job openings out there, it doesn't take more than a few minutes a day to look for what doesn't exist (paying work).


Being out of a productive work environment is a disaster for the unemployed; their confidence sinks, their job skills and habits deteriorate, and they are unlikely to find circumstances which offer new on-the-job skills and training.


Lacking a productive work environment, the unemployed have not just lost an opportunity to contribute--the foundation of self-worth and confidence--they have lost the comradeship of working with others.


While many have enjoyed the "vacation" from work for a time, a year or more out of the workplace is generally a disaster for the individual who hasn't launched an enterprise to replace paid employment with their own profitable livelihood (no easy hat-trick in this economy).


As noted yesterday, the standard-issue ideologies are incapable of grasping the inconvenient realities of The End of (Paid) Work. "Progressives" are horrified by the prospect that some duty or obligation to serve the community/nation would be expected of the unemployed; the "progressive" agenda is always what is being given for "free" and what benefits are "rights" and entitlements. Duty and obligation do not really exist in the "progressive" politics of experience except as lip service.


"Conservatives" cannot grasp that the U.S. economy has spiraled into the black hole of surplus production (over-capacity), over-indebtedness and thus surplus labor: the endgame foreseen by Marx but staved off for decades by globalization, the transformation of the home economy into a Plantation Economy supported by debt-serfs (two poorly understood phenomena I describe in Survival+) and the financialization of the U.S. economy into a state of profound debt-dependency akin to a junkie addicted to smack (with the mercantilist nations and global bankers being the pushers).


Thus we have "conservative" commentators claiming that unemployment would magically fall 50% once we stop sending out unemployment checks. Uh, right. These pundits really need to get out in the real world once in a while.


There are no jobs because nobody's dumb enough to be hiring in an economy which has far too much over-capacity, no appetite for more debt and no demand from consumers who already own everything under the sun.


Slashing unemployment would certainly motivate people, but the net result would not be happy campers magically finding millions of new jobs; campfires in the town square and explosive resentment would be the likely results of the "conservative" pundit's ideological fantasy.


I have addressed The End of (Paying) Work many times:


End of Work, End of Affluence (December 5, 2008)


End of Work, End of Affluence I: Cascading Job Losses (December 8, 2008)


End of Work, End of Affluence III: The Rise of Informal Businesses (December 10, 2008)


Endgame 3: The End of (Paying) Work (January 21, 2009)


Having worked in the non-profit sector for awhile 20 years ago, and having volunteered for a "faith-based" organization for many years in my youth, I can attest to the crying need for workers in this country. There are tens of thousands of worthy non-profits doing good in their communities, and most are under-funded/in danger of closing (not all are worthy of survival, of course; duplication and mismanagement are rife).


As cities face the consequences of unsustainable pay, benefits and pensions promised to their employees in the past, they have one choice: lay off staff. About 80% of the costs of government are payroll-related, so reducing payroll and pension payments are the only way to make a dent in monumental local-government deficits.


That means smart cities will be turning to their own unemployed citizens as a resource.


For those drawing unemployment, being productive is much healthier than degenerating at home. Non-profits need the same work done as corporate America--marketing, supervision, recruiting, etc., not to mention the actual work performed by the non-profit: repairing bicycles, teaching construction skills, remedial education, counseling at-risk families, etc. etc. etc.


One of my unpaid "jobs" is picking up litter around my block. It is a service to the community, as are the flowers I tend for public enjoyment. There is a lot of satisfaction in these simple tasks; they are not "beneath" anyone or unworthy. All work is worthy and should be respected as such.


There are about 130 million paid jobs. That means 170 million residents aren't being paid to work. I have predicted the number of employer-paid jobs might decline to about 100 million. We as a society will have to make new arrangements to keep another 100 million people productive and usefully "employed" even if they are not paid in the traditional manner. (The remaining 100 million are children, the elderly, severely disabled, prisoners, etc.)


Job-sharing, informal work, unpaid work performed while drawing unemployment, food stamps and Medicaid--these are sensible, obvious ideas for adapting to The End of (Paying) Work.



I am slowly catching up on correspondence after several weeks away from my desk --your patience is appreciated.



If you would like to post a comment where others can read it, please go toDailyJava.net, (registering only takes a moment), select Of Two Minds-Charles Smith, and then go to The daily topic. To see other readers recent comments, go to New Posts.





Order Survival+: Structuring Prosperity for Yourself and the Nation and/or Survival+ The Primer from your local bookseller or from amazon.com or in ebook and Kindle formats.A 20% discount is available from the publisher.


Of Two Minds is now available via Kindle: Of Two Minds blog-Kindle



Thank you, Rabbe S. ($25), for your exceedingly generous contribution to this site (from Finland)-- I am greatly humbled and honored by your support and readership.



Terms of Service

All content on this blog is provided by Trewe LLC for informational purposes only. The owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site. The owner will not be liable for any errors or omissions in this information nor for the availability of this information. The owner will not be liable for any losses, injuries, or damages from the display or use of this information. These terms and conditions of use are subject to change at anytime and without notice.


Our Privacy Policy:


Correspondents' email is strictly confidential. This site does not collect digital data from visitors or distribute cookies. Advertisements served by a third-party advertising network (Investing Channel) may use cookies or collect information from visitors for the purpose of Interest-Based Advertising; if you wish to opt out of Interest-Based Advertising, please go to Opt out of interest-based advertising (The Network Advertising Initiative). If you have other privacy concerns relating to advertisements, please contact advertisers directly. Websites and blog links on the site's blog roll are posted at my discretion.


PRIVACY NOTICE FOR EEA INDIVIDUALS


This section covers disclosures on the General Data Protection Regulation (GDPR) for users residing within EEA only. GDPR replaces the existing Directive 95/46/ec, and aims at harmonizing data protection laws in the EU that are fit for purpose in the digital age. The primary objective of the GDPR is to give citizens back control of their personal data. Please follow the link below to access InvestingChannel’s General Data Protection Notice. https://stg.media.investingchannel.com/gdpr-notice/


Notice of Compliance with The California Consumer Protection Act
This site does not collect digital data from visitors or distribute cookies. Advertisements served by a third-party advertising network (Investing Channel) may use cookies or collect information from visitors for the purpose of Interest-Based Advertising. If you do not want any personal information that may be collected by third-party advertising to be sold, please follow the instructions on this page: Limit the Use of My Sensitive Personal Information.


Regarding Cookies:


This site does not collect digital data from visitors or distribute cookies. Advertisements served by third-party advertising networks such as Investing Channel may use cookies or collect information from visitors for the purpose of Interest-Based Advertising; if you wish to opt out of Interest-Based Advertising, please go to Opt out of interest-based advertising (The Network Advertising Initiative) If you have other privacy concerns relating to advertisements, please contact advertisers directly.


Our Commission Policy:

As an Amazon Associate I earn from qualifying purchases. I also earn a commission on purchases of precious metals via BullionVault. I receive no fees or compensation for any other non-advertising links or content posted on my site.

  © Blogger templates Newspaper III by Ourblogtemplates.com 2008

Back to TOP