Unemployment is like a disease. It spreads through previously healthy communities, it feeds on optimism and work ethic and turns them into hopelessness, helplessness, poverty and apathy. And most sickening of all, it's unnecessary.

At any given time in any economy, there is literally far too much work available for the workforce to support. Much of this work is currently voluntary and unpaid but in theory, there is no real reason why it should be. The New Deal that early 20th Century America entered into is an example of this principle at work, as it were.

When you're unemployed, everything is an effort. Getting up in the morning may be the hardest thing you do all day but because of that, it magically becomes an incredibly hard thing to do. Going to sign on or to cash a giro is harder work than a 12-hour shift in a factory. Actually going to an interview is a major acheivement - when i was unemployed i was proud of myself just for going and never mind whether i got the job or not.

The other thing that you have to get used to is pennilessness. I had no money. Not in the sense of "I can't afford a new telly, i have no money." More like "Roll on Thursday - then i can eat again". And being skint is a fulltime job. You don't just stop at 6pm and go home and have your tea like everyone else. You don't get a weekend off from being on the dole where you go back to having a few quid in the bank and can afford a pint again. You live with it all the time.

I've had some really shitty times in my life but i can honestly say that uneployment was one of the worst. It made me ill, it made me clinically depressed, it made me all the stereotypes that people like Norman Tebbit used to trot out - I was lazy, shiftless, didn't want to work. Bugger work, i didn't want to wake up in the morning. Unemployment sucks.

Higher Aggregate Demand may create jobs if the unemployment in existence in the economy is caused by a lack of demand for goods and services. However, it may well be that firms are looking to take workers on, but they cannot because the unemployment is caused by workers not having the skills required by industry. For example, if there is a demand for non-manual workers, but most of the unemployed are trained in manual work, then firms may find a lack of suitable applicants to fill vacancies. In such circumstances, the unemployment is said to be 'Structural unemployment.' Expansionary fiscal policy will do nothing to alleviate structural unemployment.

This criticism can also be raised with regards inflation. If inflation is caused by too much aggregate demand, then deflationary fiscal policy may help to reduce it. However, if the inflation is caused by rising raw material costs and rising factor costs, then fiscal policy may be powerless in the fight against inflation.

Cletus_the_Foetus says: As aggregate supply rises, firms will be in increasingly better positions to sponsor new training for potential employees. Inflation is not caused by "too much" aggregate demand (whatever that would mean) but credit expansion; increase in aggregate supply is deflationary and makes education cheaper.

Unemployment may cause a deterioration of economic situation, downgrading of social status, broken social relations, changed risk behaviors, impaired psychological well-being, and depression, consequences that may develop into severe illness.

-- Dr. Margaretha Voss, of the Karolinska Institute in Stockholm, in a report in the December 2004 issue of the American Journal of Public Health.


There's an enormous difference between quitting a job and getting laid off or fired.

If you quit a job, you've most likely done it because you've already got a better gig lined up. You give your two weeks' (or longer) notice. Your coworkers give you a going-away party; there's gifts and congratulations and happy goodbyes. You leave your last day of work like a hero riding off into the sunset.

You feel exhilarated; liberated.

If you're laid off or fired, it's another story entirely. Sometimes it totally blindsides you. You think you're safe, that you've been doing a good job, until the day the boss asks to see you in his or her office.

But sometimes you see it coming from a long way off. The company's been shedding employees like a St. Bernard shedding hair in July. You've been living under the cloud of doom so long that you just want it to be over.

You think it will be a relief to finally get fired. But it isn't. You get taken into your managers' office. A security guard is there. You're given the news, and then just an hour or so to pack your belongings into cardboard boxes. The guard escorts you back to your cube; your coworkers are conveniently at lunch, or in a meeting. You're treated like a criminal as they hustle you out, afraid of an angry outburst, afraid your tears will rot the morale of the failing company.

You feel small and weak and betrayed. You feel like a failure.

If you're not angry after having been laid off ... just give it a little while. The objective viewpoint of "Well, the company did what it had to do" melts into rage after the first few months of applying for jobs, any job, only to be rejected again and again. You're going to run through a maddening cycle of emotions as you apply for positions: hope, dismay, frustration, rage, depression, numb defeat. Wash, rinse, repeat.

I, like many others in today's depressed economy, have become what the U.S. Department of Labor quaintly refers to as "long-term unemployed". We, who haven't had work for more than six months, are much more common than in the last economic downturn.

Here are a few things to keep in mind in the unhappy event you should join our ranks:

  • Apply for unemployment compensation as soon as you can -- I waited four months before I applied, and I really could have used the money during that time. It's easy to convince yourself at first that you don't need to apply, thinking, "I'm experienced! I've got degrees! I'll find work soon!" Yes, you could be lucky and get rehired quickly, but in the current market, it could be many months before you find something. A few weeks on unemployment money doesn't hurt anything; in most cases the funds come from taxes paid by the company that laid you off, so you're not taking the money away from anyone who needs it worse than you do. The only good reason to wait is if you've gotten a decent severance package; apply the last week your employers' benefits will run out.

  • Know that your friendships will change -- If you've been at a company for a while, you likely have "work friends". Some of these people may have seemingly turned into "real" friends. Be aware that a lot of these people will be awfully scarce if you get fired. Many people don't know to expect this, and the additional pain of feeling shunned by people you thought cared about you can make the post-layoff depression all the worse. Sometimes you do indeed discover work friends' bonhomie was just an ingratiating facade. But sometimes, they truly did like you ... but they're scared. Scared that if their boss finds out they've been fraternizing with a fired employee, they might be next. Scared that your bad luck will rub off on them.

    But sometimes, you'll forge new friendships through commiserating with other firees. Take advantage of bitch sessions and post-layoff get-togethers; it helps to vent, and you never know who you'll click with.

  • Know that some people won't understand your situation -- In fact, some people won't be willing to understand what you're going through. Employed friends are perfectly willing to go into denial about how bad the job market really is. Thus, your lack of success in finding employment must be some flaw in you rather than a sign of a truly awful economy.

    Parents will be confused as to why their bright young son or daughter can't find work. Surely they haven't raised a slacker? You'll find yourself repeating the same explanations over and over until you're hoarse: Yes, ma, I applied at ____. I tried ____. Yes, I bought a new suit. Yes, I called the agency back. No, I haven't found anything yet. Yes, I am really, really trying. People just won't get it until they're in your position; try not to take their disbelief personally.

  • Find a positive outlet for your anger and frustration -- Work out. Write. Photoshop your former boss' face. Beat on a punching bag. Whatever you do, find a way to channel the bad feelings you're going to have, because they can build up and do terrible damage to you and the people around you if you don't. You don't want to lose a lover or a roommate because you've turned cranky and bitter (or depressed and withdrawn), and you don't want to find yourself losing your temper during a job interview.

  • Keep busy, and keep focused -- It's easy for your life to totally lose structure during an extended stretch of unemployment. How many of us would get up in the morning if we don't have to? It's too easy to stay up all night watching bad TV and sleeping 'til mid-afternoon. Falling into that kind of schedule makes it hard to be sharp for interviews. So create your own structure; if you don't find a job, find some kind of interesting volunteer work. Consider going back to college, if you can afford it. Keep your mind and body in shape.

  • Take care of yourself -- Heed Dr. Voss' warning. Her study in Sweden of over 20,000 twins has shown that, compared with consistently-employed twins, twins who have suffered unemployment are more likely to die in the 10 to 24 years following their layoff or firing. What do they die from? Suicide, mostly, particularly the women. The men die from accidents, some of which could be hidden suicide. There was also an overall increase in health problems in the unemployed, particularly problems related to alcohol abuse.

  • Take advantage of employment counseling -- Sometimes you'll be offered services at an employment agency as part of your severance; sometimes these services seem pretty lame. But if you've been out of the market for a while, you will need help getting your resume and such in order. At the very least, do some research online and ask friends to look over your resume and test you on interview questions.

  • Re-evaluate your employment goals -- The market's tight; we can't be as choosy as we could be four years ago. Are you applying for all the jobs you could potentially do? Do you need more training? Are you making sure that desperation isn't driving you to apply for inappropriate work that will make you miserable?

Most important, keep looking and applying for work, every day. Don't give up. Unemployment sucks, but if you perservere, it's only temporary.

Individual countries usually measure unemployment as the number of people claiming benefit. This is usually an artificially low number, as they also have rules to prevent certain groups claiming benefit, and require the jobless to jump through various hoops to get on the list. Furthermore, unemployment figures in general fail to register the scale of underemployment in the economy; people doing jobs which do not make full use of their skills, for which they are over qualified, people working part-time who would be willing to work full time. Historically, the largest group of people who might want to work but are not counted as unemployed are married women, who would enter and leave the labour market with changes in demand, and whom employers would find it easier to fire than the men folk. This maybe somewhat less true today with the rise of part time work, but serves to demonstrate the difficulties is assessing how well the economy is operating relative to its full potential.

According to the International Labour Organisation, unemployment is defined as those who have been looking for work for at least four weeks, and are ready to take up a job in the next two weeks. Economists make reference to three kinds of unemployment. These are frictional, structural and demand-deficient unemployment.

Frictional Unemployment

Frictional unemployment is the inevitable result of churn in the economy, which exists even if everyone has all the right skills and there are more than enough vacancies with the right level of wages for everyone to be employed. It is simply the time it takes for a worker, having lost his job, to register at the job agencies, read the adverts in the papers or on the internet, write or update their CV, choose and apply for new positions, go to interviews, and take up a new position. This kind of unemployment is a real cost to the economy, as it is labour which could have been used to make something or do something useful instead floating around aimlessly. But it is beyond the scope of economists to deal with it. It can be reduced by making it easier for unemployed people to find out what jobs are available, by making the job agencies function more smoothly, and by giving unemployed people help in writing CV's and making themselves look more competent at interviews.

Structural Unemployment

Structural employment is caused by a mismatch of the skills workers have with the skills employers need. It is the result of structural changes in the economy - be it agrarian societies becoming industrial societies, or industrial economies turning into service based economies. Agrarian societies do not need their labour force to have many skills at all - in fact rulers may be suspicious of literate peasants, as literacy breeds socialism. Industrial economies desire a diligent and literate workforce, people who can read a manual and thereby operate a machine, but otherwise have no use for independent thought. Service based economies greatly value this creativity, as once the old manufacturing sector has shifted to the countries with lower wages, they rely on entrepreneurs creating new jobs in areas like information technology, music, art, films, restaurants, the financial services industry, and very hi-tech areas of manufacturing. This skills mismatch means firms are unwilling to hire labour which doesn't know how to do the job. The solution is either to improve education and training, with government sponsored schemes to give the unemployed new skills, and subsidise companies which put some effort into training their workers, or else to slow down structural change, by reducing wages and devaluing the currency, to prevent the old industries from collapsing, giving your economy more time to adapt to the changing circumstances.

Demand-Deficient Unemployment

The third kind of unemployment is demand-deficit unemployment, the sort Keynes was talking about. Keynes explained that as societies get richer, people like to save more of their income. Therefore, to make sure that money keeps circulating, a larger and larger portion of national income relies upon invest by companies. This is unfortunately much more unreliable than consumer spending - investment is not a function of current real income, but expectation of future profits. Furthermore, the mechanism by which investment is regulated, namely changes in the interest rate, cannot be relied upon in all circumstances. Nominal (money) interest rates cannot fall below zero, but inflation can. Therefore, when prices are falling in a recession, real interest rates are held very high, discouraging firms from investing. This has a knock on effect on consumer spending - why buy today, when prices will be lower tomorrow? Therefore, a collapse in demand causes firms to fire workers and/or go bust, creating a high level of unemployment. This poverty does not exist in spite of but because of the countries high wealth and very productive industry. The more advanced the economy, the greater the importance of investment, the less reliable demand, the more frequent and painful are the recessions, downturns in the economic cycle. As Keynes put it, poverty in the midst of plenty.

There are two solutions to this kind of unemployment. The Central Bank can and stimulate the economy not only by lowering interest rates, but also by increasing the money supply through buying bonds. A bond is a promise to pay a fixed amount of money every year. When the government buys bonds, it gives money to the private sector in exchange for a promise of future payment. By giving more and more money for a smaller and smaller future payment, the Central Bank can force money down the throat of the private sector. However, this manner of increasing the money supply still only raises demand through investment, which is still being discouraged by falling prices and so high real interest rates. Therefore, increasing the money supply does not work in severe recessions.

The government is a stabilising forces in recessions. It spends more on unemployment benefit, and collects fewer taxes as people are poorer and fewer have jobs. It can be even more helpful with a counter-cyclical spending policy, by engaging in more public works, and borrowing more money, essentially investing on behalf of the private sector. Because the government does not have to worry about making a profit, it succeeds where the private sector fails, and is viewed by Keynesians as the ultimate means of ensuring full employment.

Political Will

I have spent disproportionate time talking about demand-deficient unemployment because various political groups like to deny it exists for political reasons. Having a large pool of unemployment can be useful for some. It takes power away from the unions, keeps wages and inflation low, redistributing wealth from the poor to the rich, and from the young to the old. Unemployment carries with it a very high economic cost, people who could be working are not, it is a wasted resource, effectively throwing money down the drain. There are always means for the government to tackle high unemployment (above a few percent), if they don't it is because they don't want to, it conflicts with their other political goals, it is not because they can't, so Don't believe their lies!

Imagine if you woke up tomorrow and checked your wallet and found that it was empty of cash. You check your jar of loose change and it's empty as well. You call your bank and they inform you your bank balance is 0. You call your stock broker and they tell you you have no shares in anything. You panic. You call up your family, hoping to borrow some money and they tell you they're broke too.

In fact, all the money, stocks, bonds, and gold bars sitting in bank vaults have disappeared. For everyone. Sounds like the beginning of a science-fiction disaster movie, right?

The fact is, even with all these things gone, food can still be grown, houses can still be built, and life can go on. All the natural resources and productive equipment are still there. All the workers are still around.

All these financial instruments are just a way of accounting, a convoluted way to decide how various resources (from raw materials, to factories, to labor) is used to produce the things everyone uses.

Now imagine all the money, stocks, etc came back, but you are in the midst of an economic depression. Raw materials and factories sit there unused. People stay at home because they have no jobs. Meanwhile, people are dying because of lack of nutrition, warmth, and health care.

What's wrong with this picture? If there's no need, then fine, people can do nothing. But if there is need, why are economic resources sitting idle and not being used to fill that need? Unemployment is a measure of how much of our human resources are being wasted. If an economic system can't find a way to make use of all the potential resources it has, then it is the wrong economic system.

The P.I.s at the U.B.O.

It’s a grey, sleety, cheerless January day and it occurred to me that it’s nearly thirty years since the grey, sleety cheerless January when I worked for a few weeks as a Clerical Assistant at the Cambridge Unemployment Benefit Office. Absolutely nothing is happening up here in 2011, so at the risk of premature descent into my anecdotage, I decided I would dredge up some memories of that time.

As you can imagine, work for a C.A. in the U.B.O. (acronyms are a civil service speciality) mainly involving the movement of bits of paper from one office to another, was pretty damn tedious. I imagine that now such work is even more bloody tedious, for these days, you have no reason to get up from your desk. Back then, computers were a mystery to most of us. I don't remember seeing one in the building, although there may have been one or two operated by treddle or paraffin in the wages office. Every claimant had a claim pack, a real bundle of paper, cardboard and rubber-bands, not a computer file. Depending on the claimant’s circumstances, needs and afflictions - fifteen children, chronic jet-lag, obligation to support relatives, refusal to support relatives, King’s Evil, and so on, the claim pack could be in any department of the large, charmless building, and minions such as myself spent most of the day traipsing up and down stairs, looking in filing cabinets, on windowsills and under desks for claimants’ details when our own department required them. The only part of the job I actually liked was taking fresh claims from the newly unemployed. Most of these ten-minute transactions were unmemorable, but I was surprised at just how many people there were who couldn’t read or communicate in writing. One week we had a run of people who said on their claim forms that they had previously been employed as jellies:

Name: Roger Donger Wattam Potter
Previous occupation: Jelly

Name: Fanny Payne
Previous Occupation: Jelly

The names, by the way, are real; scandalous that parents can be so lacking in compassion. There were several of these former jellies, few of them large and wobbly, so it was hard to see what had qualified them for the post. It was disappointing to learn that the Chivers jam, jelly and sweetie factory had laid off a large number of employees, and the jelly department had been hardest hit, splattering ex 'jellies' our way. Don’t know if it ever bounced back. (Sorry.)

The only day with potential for entertainment was Personal Issue, or P.I. day. Every Thursday, claimants who had no fixed abode came in to collect their giro cheques. Many of these were alcoholic or barking mad or both, and for three hours or so the public area was like the Bedlam Hospital. The inebriate, the hallucinant and the gibbering queued for their pittance and the smell of cider breath and old, urinous clothing was overwhelming. One old gentleman, possibly a Touretter, did bird impressions and ticked and chimed like a Grandfather clock. The day was both funny and deeply depressing. Where did these people go once they had collected their giros? To hostels, to B&Bs, to shelters, shop doorways and cardboard boxes. One snowy afternoon at dusk, a man whose claim had not been processed was turned away penniless just before closing. He gave the door a bloody good kicking before leaving. Solved nothing, but I would have done the same.

Into our Thursday afternoon atmosphere of piss, booze and demented babble there came a very elegant middle-aged lady whose natural habitat, I would have said, was Harrods food hall. She must have fallen on hard times and boy, had she picked the right day to feel degraded. As I was taking her claim, behind her a tall, gaunt elderly drunk was vying with her for my attention, waving and swearing at me like a miffed regular being ignored in a crowded pub. My lady turned and in an accent that could shatter glass, admonished him to wait his turn. As soon as she had concluded her business and risen from her seat, the drunken gentleman collided with her as he hastened to occupy it and she hastened to get the hell out into fresh air. I ascertained that the curmudgeonly and abusive gentleman was one Mr Michael Green of No-Fixed-Abode-a-Wee, Cambridge area.

‘What have you got against de Oyrish?’ he snarled at me as soon as he had taken his seat. ‘What de fuck have you got against the fuckin Oyrish?’

‘Nothing,’ I said. ‘My mother’s Irish.’

Well, her grandmother was – half.

This news immediately brought about the most extraordinary sweetening of Mr Green’s demeanour. He beamed at me.

‘Which part of Oirland does yer mammy come from?’ he asked, almost tenderly.

Huddersfield,’ sez oi, beaming back.

‘Ah, now! Ah, now! Yer can see it! Yer can see it in yer face!’ He was all sunshine for the remaining minute or two of the transaction. I gave him whatever papers it was he needed from me and as he pocketed them, he winked and said ‘we all must live! We must all live!’

Ah, be Chroist, that we must, Mr Green, that we must. He went away a happy man.

One tries one’s best, I thought.

Next up is a youngish, slim and clerkly man in a pale grey suit, white shirt and pale grey tie, slightly nervous, leaning forward as one most anxious to be helpful. I ask for his name.

‘Crown Prince Napoleon Bonaparte,’ he says.

I ask him to repeat it.

‘Crown Prince Napoleon Bonaparte,’ he says again.

Yep, that’s what I thought you said. You don’t look like someone who’d be taking the piss, but…

‘Do you have any I.D.?’

He passed his driving license under the glass, and sure enough he was officially Crown Prince Napoleon Bonaparte, of the same indeterminate abode as Mr Green. He seemed to have lived for weeks in a succession of guest-houses. When he came later to sign on, I heard him respectfully pointing out to the person on the desk that his name was Crown Prince Napoleon Bonaparte, not just plain Prince Napoleon Bonaparte, as had appeared on his last giro. Had some shiny-arsed jobsworth at the post office quibbled about cashing his giro, as if he had several near-namesakes in the Cambridge area? I have met only one other person who had gone to the bother of changing his name by deed poll, swapping something clunky and commonplace for the more arresting and euphonious ‘Avon Huxor’, which sounds like a character from The Hitchhiker’s Guide. He did this because he had a sense of humour. The Crown Prince, however, seemed entirely to lack this attribute, maintaining his earnest, slightly obsequious manner every time I encountered him. It wouldn’t surprise me to learn that he is presently detained at Her Majesty’s pleasure for dismembering landladies.

On my last day, a little old lady came in, not to make a claim, but to warn us that we should all wear batteries in our hats. She indicated a couple of Evereadies tucked snugly into the band of her own. These would deflect the rays that aliens were beaming down onto the planet to brainwash us, and we'd all be alright. She was thanked for her concern, and went on her way, perhaps to apprise some other government office of the threat. She was right about the brainwashing because I have forgotten what size battery she specified, so you will just have to experiment and hope it isn't too late.

A blog post

Unemployment seems to me an oddly modern concept.

People fret that they are out of 'work' they've got no 'job'; the complaint itself is a peek into the expectations set upon them by society. What they really mean is, they've no regular source of the income needed to pay bills, which they would expect to be provided by some other person in contractual exchange for work being performed for that other person, on a continuing basis.

To worry over being unemployed is to believe one has not been put into a sort of slot for which society has generated a sense of belonging, to be without something we are led to believe we are supposed to have. But the idea that every man's lot is to be a wage worker or salaried employee of somebody else is simply a construct -- a highly unnatural one. For by this standard, every caveman, every ancient hunter-gatherer or medieval hermit in the hills was 'unemployed.' Deeming oneself unemployed is part of the mindset of interlocking social dependency; akin to declare oneself incapable of growing one's own food and making one's own clothes, reliant on somebody else to validate one's existence by providing other tasks as a means to obtain these things. But most any person able to 'get a job' ought to be able to supply their own necessaries of subsistence -- comfort, even -- by the sweat of their brow, requiring no other soul to 'hire' them and give orders in exchange for colorful rectangles of paper symbolizing bank transactions.

It's been claimed that 'the things we own end up owning us' -- and it seems that so long as men are unable to make the things they need for themselves, those things end up putting them to work for somebody else.


296 words

Un`em*ploy"ment (?), n.

Quality or state of being not employed; -- used esp. in economics, of the condition of various social classes when temporarily thrown out of employment, as those engaged for short periods, those whose trade is decaying, and those least competent.


© Webster 1913

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