Category: Employment, Think Tank

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2 Responses to “Will a Surge in Labor Force Participation Impede Unemployment Rate Improvement?”

  1. Angryman1 says:

    No, because the rate of job “closures” will speed up. Wages are already starting to rise in areas where available men has shrunk and women are choosing not to fill in the gap. That will probably end soon in this case.

  2. It does not necessarily matter what the unemployment rate does. What matters for the nation (and more broadly for the world) is the total employed population, the production produced by that employed population, and the equitable distribution of that production among the population.

    At the moment, a healthy fraction of even the “employed” workforce are engaged in tasks which do little to improve anyone’s standard of living. Reform of the bloated medical and national security sectors would free up a lot of people to engage in more fulfilling activities. Our medical/insurance system delivers twice the expense of the rest of the world’s, in a horrifically byzantine and bureaucratic way, without delivering noticeably better outcomes, and generates such skewed incentives that even Time magazine has shamed the entire sector publicly. It is not enhanced by a “food and beverage” industry which sells obesity-generating (but high-profit) junk rather than food that’s actually good for people. Our “national security” system is doing a good job of embarrassing itself already, so I will not go there.

    Now, freeing up a lot of people for more fulfilling activities is a great idea, but… The difficulty we face is that the national leadership is so obsessed with sustaining corporate profitability at historically extreme levels, that cartels and quasi-monopolies are not regulated, and as a result the economy sits in a high-profit, reduced-production equilibrium that enables product prices to remain propped up despite large numbers of people being unable to find a way to earn a living.

    This regime is nothing new and was repeatedly mentioned by the late economist, Galbraith. It’s a low-growth, non-sustainable regime; the route to long-term sustainable increases in corporate profits requires putting more people to more productive work. We need leadership capable of focusing on the real challenge of helping the people find new, better ways to contribute productively. The current leadership is trapped by various means into protecting corporate profitability at the expense of the general welfare.

    In any case, there won’t be much of a surge in labor force participation if people are content not to work too much, because the rewards from work don’t justify the stress and frustration of putting up with the corporate systems.