Unemployment and Neo-liberalism
Re: 'Unstoppable' labour market adds jobs for 12th month, drops jobless rate to 5.9%, The Canadian Press, Dec. 1, 2017
The inanity of modern neo-liberal economics is illustrated when 5.9% unemployment is extolled as "operating at full employment". At this level, over one million Canadians are still actively seeking work, a number which does not include the discouraged, nor part-timers who would welcome more hours. Those additions would likely double the official rate.
Unemployment is a scourge with significant economic, social and personal costs. In addition to considerable loss of earnings and job skills, the long-term unemployed experience higher rates of mental illness, addictions, and family breakdowns.
During and after the Second World War and well into the 1950s, when government policies focused on achieving full employment for returning veterans, unemployment rates dropped to 3% or less. But today, those without work are largely abandoned; their plight not even recognized by pundits, professors and politicians who pretend that the same government that can fight world wars (and more recently bail out a troubled financial system) is yet powerless to assure a job for every job-seeker.
1. Study: Linking labour demand and labour supply: Job vacancies and the unemployed
"In the second quarter of 2017, unemployment averaged 1.28 million and the number of job vacancies was 460,000, meaning that there were 2.8 unemployed persons for each job vacancy."
2. William Mitchell is Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), University of Newcastle, NSW, Australia http://bilbo.economicoutlook.net/blog/?p=31913
"The neo-liberal era has been characterised in part by the abandonment of a commitment to full employment by governments and a new obsession with full employability.
The former requires the state to take responsibility for ensuring there are enough jobs to meet the desires for work by workers. It is a demand-side strategy. If the non-government sector doesn’t create enough work then the government has to step in either to stimulate more private job creation (via targetted or general spending/taxation initiatives) or directly create public sector jobs.
Full employability blames the victims of the job shortage and focuses policies (sticks and carrots) on the individuals without regard to whether there are sufficient jobs to go around."
3. A note on Canadian unemployment since 1921
"From 1927 to 1929, and again during and after the Second World War, unemployment rates dropped to 3% or less......"
4. The Deficit: Hysteria and the Current Crisis
Further, in order to reduce the rate of unemployment and eventually the deficit in the longer term it is necessary to greatly increase the gap between government expenditure and revenues.
This is clearly what happened during World War II when the deficit rose from less than 1 percent of the GNE in 1939 to 21.7 percent of the GNE in 1944. The unemployment rate fell from 11.4 percent to 1.4 percent during the same period. In a period of less than 3 years after these enormous deficits, the resulting economic recovery produced a surplus in 1947 of 5.7 percent of the GNE. This surplus position continued until 1954.
Modern Monetary Theory in Canada