Re: Want a job? You'll have to get through boot camp first

by Red Aegis Tue Mar 12, 2013 6:23 pm

NotAMarxist wrote:Again, I couldn't agree more. I hear all the time about this 10% unemployment rate. Well how many people do we know that are complete morons when it comes to social skills or professional skills? My guess is it's probably a bit higher than 1 in 10. I'm tired of hearing people complain about unemployment when in all reality, the reason is probably the fact they lack desirable skills and that's they can't find a job. Proof of this would be that the college educated always struggle less for unemployment. Why people have a fear of college in the USA I have NO idea. Maybe it's just Idaho. I wouldn't be surprised if that were true.

The idea that unemployed people just aren't trying hard enough is ridiculous.

Take a look at this article on unemployment. Here is some of the article:

Matthew O'Brien wrote:There's a new cliff in town, and it's much scarier than the fiscal cliff. It doesn't have anything to do with expiring tax cuts or sequesters. It has to do with people who have been out of work for six months or longer. It's the worst cliff of them all: the Unemployment Cliff.

Our unemployment crisis is also an unemployment enigma. When jobs openings go up, unemployment should go down. This relationship is captured by the Beveridge Curve, seen below. The diagonal red line says that when there are more vacant job openings, the unemployment rate should be lower. But as you can see in the bottom right hand corner, something strange (and very bad!) is happening. More job openings haven't produced more jobs. That suggests a mismatch between jobs and skills ... the dreaded "structural unemployment."

Look again. This might be the most important chart you'll see. If unemployment really is structural, there's not much more policymakers can do to bring it down. If it's not, policymakers should be tearing their hair out to put people back to work. So, is it? No. A pioneering paper out of the Boston Fed pretty definitively shows that we have a long-term unemployment problem, not a structural unemployment problem.

There's always a story when it comes to structural unemployment, and it's almost always a story about old workers needing new skills for our brave, new economic world. The Boston Fed paper, by Rand Ghayad, a Ph.D. candidate in economics at Northeastern and Visting Fellow at the Federal Reserve Bank of Boston, and William Dickens, a professor of economics at Northeastern and visiting scholar at the Federal Reserve Bank of Boston, looks at the Beveridge curves for different ages, industries and education levels to figure out exactly who is getting left behind nowadays. The answer is ... everybody. The Beveridge curves for young and old, blue-collar and white-collar, and high school and college graduates all look alike -- there's the same upward tick in all of them. There's a word for this, and that word is flabbergasting. As Ghayad and Dickens point out, the last time we had a structural unemployment problem was during the deindustrialization of the 1970s and 1980s, when Beveridge curves for blue-collar workers, and only blue-collar workers, moved up. Did we all wake up in 2008 and suddenly lose our skills?

Not exactly. Ghayad and Dickens broke down Beveridge curves along one more axis -- length of unemployment. Here's what it looks like for people who have been out of work for less than six months. This is what normal looks like.

This chart is worth approximately 20 words. People out of work for less than six months haven't had a harder time finding work than they usually do. But the Beveridge curve has shifted up for all workers, so that implies all of the shift must have come from people out of work for six months or more. The chart below shows us that this is indeed the unhappy case. Unemployment is a cliff that's hard to climb out of after six months.

It's hard to imagine a big skills or incentives gap between people unemployed for five months and people unemployed for six months. But it's not hard to imagine companies treating their resumes differently. Overrun HR departments might just toss the resumes of applicants who have been out of work for six months or more, because they assume there must be something wrong with people who have been out of work that long. Sadly, this isn't a hypothetical. Scott Pelley reported on firms that won't consider the long-term unemployed -- or the unemployed, period -- for 60 Minutes earlier this year. It's depressingly legal to discriminate against the unemployed, and a depressing number of companies do just that.

Circles don't get more vicious than this. The people who need work the most can't even get an interview, let alone a job. It's a cycle that could end with the long-term unemployed becoming unemployable. It's what economists call hysteresis, the idea being that a slump, left untreated, can make us permanently poorer by reducing our future ability to do and make things. You should be scared anytime you see the words "permanently" and "poorer" together in a sentence -- especially if you're a policymaker. We need more stimulus, and we need it now. That means the Fed needs to figure out its thresholds for forward guidance and Congress needs to not only undo the fiscal cliff, but also, please, give us some more infrastructure spending. Heck, Larry Summers and Brad DeLong think fiscal stimulus might even pay for itself with interest rates so low by preventing hysteresis from happening.

We can do better, if we want to. As Paul Krugman points out, people told themselves structural unemployment was to blame during the Great Depression too, only to discover that all the people who supposedly didn't have the right skills suddenly did once the military buildup started. Funny how adequate demand works. The best thing we can do for long-term growth is to forget the long-term and get the long-term unemployed back to work now.

In the long run, we can't afford to worry about the long run.

Basically, saying that workers are just not getting the necessary skills to be attractive to employers is flatly incorrect. I've been to unemployment offices and they put in considerable effort to learn more and even if they do they are just as likely to be called 'over-qualified' and the results will be the same.

by **Celtiberian** Wed Mar 13, 2013 7:09 am

NotAMarxist wrote:How is physical exercise a degrading thing? I'd love to get paid to work out. In fact, one thing I like about socialism is the heavy emphasis on exercise and public health in many socialistic countries.

Exercise is fine as long as it's being voluntarily performed for the sake of maintaining or improving one's health, and not as part of some demeaning competition over a job.

The ability to improve the collective hive is an essential thing for socialism to me. Whether economically, or physically. A strong nation, is built by strong people. Hardy men, and women, workers of the world! It's a beautiful thing to see strong, quick-witted men and women.

Few people would argue against the idea that healthy minds and bodies are preferable to the alternative, but I find this "collective hive" language unsettling. Being a libertarian socialist, I believe autonomy is an integral aspect of human flourishing, and sacrificing oneself to the "hive" runs contrary to that.

Again, I couldn't agree more. I hear all the time about this 10% unemployment rate. Well how many people do we know that are complete morons when it comes to social skills or professional skills? My guess is it's probably a bit higher than 1 in 10. I'm tired of hearing people complain about unemployment when in all reality, the reason is probably the fact they lack desirable skills and that's they can't find a job. Proof of this would be that the college educated always struggle less for unemployment. Why people have a fear of college in the USA I have NO idea. Maybe it's just Idaho. I wouldn't be surprised if that were true.

In addition to the excellent article Red Aegis cited, I recommend you read John Miller and Jeannette Wicks-Lim's “Unemployment: A Jobs Deficit or a Skills Deficit?”

by **Rev Scare** Wed Mar 13, 2013 8:26 am

Structural unemployment is intrinsic to capitalism. During periods of economic crisis, idle factories can be juxtaposed with high rates of unemployment. It is a contradiction within the system, and to somehow attribute this solely to the indolence of individuals is to fail to observe the greater picture. The Federal Reserve maintains records of what it terms the "capacity utilization" of production. That is, it attempts to estimate how much idle capital (e.g., factories, tools, equipment, etc.) exists as a percentage of total capital. It is clearly a measure of economic health. In the United States, roughly 20 percent of our capacity remains unused. Who is to blame for this? Workers? They do not control the terms of production: they can only sell their labor power. Capitalists decide when to invest and under what conditions, and they do so only when they can find profitable opportunities. As the articles linked by Celtiberian and Red Aegis demonstrate, the official unemployment rate is misleading: the real figure is much higher. To the standard unemployment statistic, we must add discouraged workers (i.e., those who have ceased to participate in the agonizing custom of the "job search"), the underemployed, and the overqualified. All of these are products of the logic of a mode of production that regularly stifles human potential, misallocates resources, and engenders gross inequality in the pursuit of ever higher profits—an internal command of the system.

What is more, "NotAMarxist," capitalists desire a rate of unemployment which shifts the bargaining power between themselves and workers in their favor. The threat of losing one's livelihood is not nearly as compelling when the jobless rate is zero, and of course, a vigorous workforce is a potential danger to the status quo. (Bourgeois economists have even identified a hypothetical "natural" rate of unemployment occurring as part of the "friction" in the economy.) Lastly, there is the fact that capitalists view labor as merely an input into the production process—a cumbersome cost—that is to be eliminated in order to maximize the profits of individual capitalists. This latter phenomenon describes a powerful contradiction that is at the root of capitalism's chaotic development (its periodic crises), but crisis theory is not germane to this thread.

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