Obfuscating Unemployment

[marmar]

from truthdig:




Obfuscating Unemployment

Posted on Jan 27, 2011
By Moshe Adler


David Leonhardt of The New York Times wonders why unemployment has remained so high for so long. At first, it seems to him that it is because American employers are too strong and American workers too weak. But after contemplating the matter further, he discovers his own folly.

Leonhardt starts with unions. Unions are good, he explains, because they give workers bargaining power. But strengthening unions would nevertheless be difficult because, according to Leonhardt, too many unions have hurt the companies for which their members work. And after consulting with a Harvard economist, Leonhardt discovers two more reasons why unemployment is the fault of the unemployed: Disability insurance gives workers an incentive not to work, and low levels of education make them unemployable.

The example of a harmful union that Leonhardt cites is the auto workers union. As if it was the union that forced GM to produce cars that consumers did not want to buy, or as if with the same union Ford was unable to thrive. Any explanation of the rate of unemployment that involves unions, disability insurance or education is in any case laughable simply because none of these changed over the last two years, during which time joblessness surged. The highest rate of unemployment is currently among construction workers. Would there have been more new housing or schools if their unions were more compliant, their level of education higher or disability insurance less generous?

During the Great Depression, high rates of unemployment prevailed for 11 years and declined only when the U.S. entered World War II. The experience of seeing a free market system drive itself into a rut that it cannot pull itself out of is nothing new. And thanks to John Maynard Keynes’ explanation of how a market system actually works, we also know what the solution is. .......(more)

The complete piece is at: http://www.truthdig.com/report/item/obfuscating_unemployment_20110127/

[xchrom]

1. you have to read the whole thing. nt