Let’s Remove Unemployment
This article presents a very simple idea which will eliminate unemployment. It will empower the people. It will significantly increase workers’ salaries. It will bring justice and economic growth. People are unaware of this idea because the rich hide it from the public.
The owners of corporations favour unemployment because the unemployed workers are pressured to accept poorly paid jobs to feed their families. A higher unemployment rate produces cheaper labour. Corporate owners can generate unemployment by influencing economic policy, from importing labour to raising interest rates. An unemployment rate of about 5% seems very convenient for employers, and economists have accepted it as a “normal” state. This “normal” state allows workers to be exploited through low labour costs, while workers’ total purchasing power remains high enough to generate profits for private companies.
Today’s economy recognizes cyclical, frictional, and structural unemployment. Cyclical unemployment is the result of oscillations in the process of expansion and recession of production, which oscillates the demand for work. Some economists believe the burden of crises and the benefits of profits should be more equally distributed between employers and employees, but they do not know how to implement it.
Frictional unemployment is the result of people willing to move between jobs, careers and locations. Structural unemployment results from technological change, which reduces demand for available workers. Scientists create these types of unemployment to give students something to learn, but they are not worth mentioning. Economists today are so indoctrinated with this false teaching that they believe unemployment is the unavoidable price of technological development. They even believe that 0% unemployment is not a positive thing. I want to stress that 0% unemployment will solve most existing economic problems.
Current economic philosophy prioritizes capital as the main requirement for protecting individual economic rights and society. This is wrong. We should base economic philosophy primarily on equal human rights because people are the economy's primary purpose and essential to its existence. Besides, equal human rights are the condition for creating a good society. This is the foundation of my philosophy.
Society regulates freedom if such freedom endangers people. The stronger has no right to jeopardize the weaker, and if so, the stronger will be legally punished. Can you imagine what life would be like without laws governing citizens' rights and obligations? But no such law exists in a free-market economy. A stronger producer might push a weaker one out of the market and endanger its survival. If we have adopted laws that prevent the stronger from threatening the weaker in daily life, we need to protect the weaker in the economy, too. But we don’t, and that's why our society deteriorates.
Unemployment cannot form a healthy basis for a good society. A just society requires work to be available to everyone. If job creation is not needed, full employment will be achieved by reducing the work hours proportionally to the unemployment rate. The public must accept this political measure, and it must be enforced in both public and private enterprises. Regulating working hours will produce full employment and create a much better economy.
Shortening working hours will reduce employees’ salaries proportionally. For example, an unemployment rate of 10% will shorten all workers' hours by 10%, and their wages will decrease by 10%. This 10% of the money the companies take from employed workers will be distributed to the newly hired workers. Initially, full employment will not burden employers with additional labour costs, and all workers will be employed and receive incomes. Previously employed workers would probably see the lower wages as a disadvantage. Still, in the long run, their salaries will grow significantly because, in the reduced job market, employers will be forced to increase workers’ salaries to retain them.
Shortening working hours will bring significant benefits to society. Lower salaries from eliminating unemployment are not nearly as bad as the situation for workers who receive no compensation. Such a measure would guarantee that unemployment and economic insecurity of workers can no longer exist.
People are accustomed to fluctuations in living standards depending on economic performance. The real purchasing power of wages changes more than the unemployment rate because of shifts in market supply and demand, economic crises, inflation, and deflation. Workers silently accept such fluctuations in purchasing power. They accept that they live worse during the crisis. So why wouldn't they accept this measure in the name of solidarity among workers, which would help establish a healthy, long-term basis for achieving higher standards of living?
Shortening work hours proportionally to the rate of unemployment will not only eliminate unemployment but also solve the problem of exploitation. Here is a simple explanation: If two workers apply for one job, competition between them will reduce the cost of labour, so the worker who gets the job will be exploited. If there is one worker and two jobs, competition among employers will increase the worker’s wage. In this view, reducing work hours in proportion to the unemployment rate will put workers in a better position in the production process. Fewer available workers will raise the value of their labour, and employers will pay them more than they do today.
Access to the free market is a privilege society grants to companies, and they must pay for it in a way that satisfies society. Raising workers' wages will come at employers' expense. Employers might not like it at first, but later they will benefit from workers' higher earnings.
Employers must understand that they cannot earn more without greater consumer purchasing power. They must understand that society's purchasing power cannot increase without raising workers' wages. They should understand that no distribution of income is better for employers or workers than that achieved through a fair labour market.
Shortening work hours in proportion to the unemployment rate would ensure a fairer distribution of income within society. A fairer distribution of income would give workers greater purchasing power, ensuring a higher flow of goods and, in turn, bringing greater profits to the owners of capital. Besides, this would eliminate economic crises, as they are primarily caused by a lack of trade in goods and services. Shorter work hours will form better capitalism and bring prosperity to society.
Overtime work will remain allowed. In the Western world, overtime work pays time and a half. Employers who intend to solve the labour shortage with overtime work will not reduce unemployment. Then a policy that follows the will of the people will further shorten working hours for all employees, and employers will have to pay more for overtime. Let employers decide whether it is more worthwhile to hire new workers or pay more overtime per worker.
The task of a good policy is to simplify regulation as much as possible while achieving a tremendous positive impact on society. Today’s policy regulates minimum income, which has a very limited effect on overall income distribution. In the developed world, many workers earn minimum wage, while inflation constantly reduces the real value of their wages. Workers at the American corporation Walmart generally earn low wages, which are affected by unemployment in America. The salaries at Walmart cannot cover basic needs, and so the workers receive social assistance from the U.S. Government. They live at the expense of U.S. taxpayers while Walmart remains one of America's most profitable companies.
A good policy will regulate the length of working hours and not necessarily the minimum income. When unemployment falls because employers cut work hours, employers who need more workers will have to hire them from other companies by offering higher salaries, since other workers will not be available. They will have to compete by increasing workers’ wages to attract workers from other companies. This will cause a chain reaction in which workers’ wages rise. If employers do not increase wages, they will not have workers. This is a fair labour market. A minimum income regulation will no longer be required. Unions will no longer be needed as intermediaries in protecting workers’ rights.
The reduction in work hours is not a new idea. At the beginning of the nineteenth century, Robert Owen recognized the absurdity of daily work lasting between 12 and 16 hours. In 1817, he proposed reducing work hours to 8 hours a day so people would have 8 hours for recreation and 8 hours for rest. Employers strongly opposed it and did not allow the reduction. The workers were very dissatisfied. The first significant worker resistance happened in Chicago on May 1st, 1867, and the day was declared International Labour Day. The struggle between employers and workers has been painful and often bloody. It took around 100 years of struggle for the idea of the eight-hour workday to be accepted worldwide.
But reducing work hours is not enough today. French socialists in power adopted a new law in 2000 that shortened the workweek for all employees from 39 to 35 hours per week. They did this to reduce unemployment and give workers more free time. But shorter hours did not increase employment because employers increased the workload of existing workers. That suggests to me there’s no need for a seven-hour workday because automation in the manufacturing process has reduced the need for human resources.
The French Socialists should have known that employers, accustomed to exploiting workers, would not give up easily. The socialists needed to further reduce work hours until employers were forced to hire unemployed workers. I would recommend decreasing the workweek length to 30 hours. The French Socialists were not sufficiently committed, and ten years later, the Conservatives abolished the 35-hour workweek limit. So the idea of social justice was lost once again.
Privileged people always find a way to oppress the marginalized, and that has always been the primary source of problems in society. But in the 14th century, a vast natural tragedy helped the disenfranchised. The Black Death killed one-third of the European population, which produced a vast labour shortage. “The shortage of servants, craftsmen, and workmen, and of agricultural workers and labourers, left a great many lords and people without service and attendance.” Crops languished because not enough people were left to harvest them.
Suddenly, workers and their labour were in much higher demand, enabling those who survived the Black Death to negotiate work conditions more effectively. Historian and economist Thorold Rogers documented that peasants were virtually given everything they asked for. Wages increased significantly (2-3 times) in one year, and higher purchasing power improved the economy. More about this can be found here: The Economic Impact of the Black Death.
Now what? Shall we wait for another tragedy, or will we, in the name of justice and solidarity, be smart enough to shorten working hours as long as unemployment exists? Only then would companies be forced to hire unemployed workers. Only then would that build justice and balance in production and distribution. Such market regulation would use “the invisible hand” to balance demand for labour and income levels in the most acceptable way for workers and employers.
I received criticism that expensive work drives capital to places where labour is cheaper. My response was that the state market can always protect itself by imposing duties and taxes on the borders. However, does capital not go to developing countries anyway? Yes, but this situation will end because if workers in developed countries do not earn enough, they cannot buy enough of the goods large corporations produce. The less capital invests in society, the less profit it receives. Capital that invests more profits survives more easily in the market. The same will happen when society accepts a new labour market regulation.
On the other hand, capital's departure can no longer pose an existential threat to workers. The eventual increase in unemployment caused by capital's departure would result in a greater reduction in workers’ working hours; thus, economic security would still be guaranteed for all people. Shortening working hours will reduce workers' incomes, but they will remain high enough to provide a decent life. Capitalism has spent a lot of energy developing an unnecessary consumer mentality and an egotistical character trait in workers, which is wrong. The solidarity in shortening working hours will fundamentally change it.
The question is, why has such a simple idea never been suggested? The reason lies in the conspiracy of big business, which, through its economic power, prevents new ideas that could improve society. Big businesses supported ideas that cannot improve society. Big capital supported Marxism as the leading ideology of the Left because they have always known that Marxism cannot create a good society, and as such, it does not constitute a hazard to them. Otherwise, Marxism, as a vehicle of the violent revolutionary ideology, would have been outlawed. Marxism is useful to big business because it misdirects the Left. This is proved by the practice of the socialist revolutions.
Thanks to big business's conspiracy, my ideas do not have access to the media, universities, politics, or the people. I have sent this article to hundreds of news publishers, predominantly left-oriented, and so far only “Global Research” has published it. But one day, the idea of reducing work hours proportionally to the unemployment rate will break through, and society will demand its implementation. This will reduce employers' privileges and increase workers’ rights. It will also reduce the difference between the earnings of employers and workers. In such an environment, capital will lose its significance. A fair labour market will spontaneously initiate a new social and economic system that will replace capitalism and substantially meet the needs of society as a whole. I have presented this system in detail in my book, Humanism. Humanism would be equally acceptable to all people and would further improve society.