Unemployment limit?

RichardAnd

Inspired by the thread currently running that deals with the reality of our unemployment ills vs the perceived situation, I have begun to think upon the issue of joblessness in a more, shall we say, theoretical manner.

At the moment, our live register suggests unemployment is about 15%. However as those figures are not a true reflection of the truth, we can deduce that the true figure is somewhat higher, perhaps 18% or something close.

Now when you think about it, that's close to one in five people who are not in full employment. Putting aside the implications for those unfortunate to be without real income, I would like to discuss what the implications of such high levels of unemployment are for our society, such as it is.

Climbing unemployment is a double blow to a state. Welfare costs rise and tax income falls, that's obvious. But in addition to that, those not working also aren't spending, aren't going out, aren't using transport and this is only going to confound the problem causing more people to loose their jobs. Thus, we can see that this is downward spiral that will get worse as the number of unemployed workers increases and this takes us to the cusp of my topic; at what level of unemployment does the house of cards some crashing down?

Consider if unemployment peaked at 25%; one in four people are out of work. Can a state realistically function like that? Can a community exist like that? What if the unemployment grew to 50% (extreme, I know), what then? Are the masses of unemployed simply going to accept poverty as their lot in life?

I've always been a believer that, at heart, humans are extremely illogical and volatile creatures. The only thing keeping the veneer of civilisation over us is that we don't want for the basic elements of life. Take away our comforts and our means to live and we quickly revert back to our roots and start looking for the best rock to smash in the head of the guy who has more raw meat than us.

I'm delving into the realms of philosophy here but I think it's an interesting discussion subject.

So what is the magic number when having a job ceases to matter because the illusion of society has begun to break down?

ei.sdraob

RichardAnd wrote: »

Can a state realistically function like that? Can a community exist like that?

Off course it can, just borrow more and make the remaining people in employment pay more taxes for longer

RichardAnd

ei.sdraob wrote: »

Off course it can, just borrow more and make the remaining people in employment pay more taxes for longer

My cyber-sarcasm sense is tingling :P

Italia

I realise that my view is probably not shared by any recognised economist, but IMHO the unemployment rate is not 15%, but closer to 24%
The population of Ireland is approx 4million, of these the economically active population (those how can/ could work) is roughly 2million.
If of these 2 million there are approx 465k unemployed, then the percentage unemployed cannot be 15%.
I understand that this is not a recognised way of looking at the problem, but IMHO, it serves to highlight just how much of a problem there is with unemployment. Plus, if you consider that there are an average of 2 other people depending on the unemployed person's wages (some are single, some married with 1 income, some married with kids etc) ...then the problem is even bigger.
My question - WTF is the government going to do to promote a culture of investment and employment?

dan_d

Beats me. Can I add to your list of woes created by unemployment RichardAnd? There's definitely an impact on mental health...the spin off being that more and more people are seeking professional help for their problems (assuming they can afford it). On the one hand many therapists are offering what they call "sliding scales", whereby they reduce their prices for someone who is unemployed, but it's not by much. (pay 40 eur instead of 60eur). I suppose it's good there's at least recognition that this is something that some people need help to deal with, along with all the attendant anxiety/anger/stress/panic related issues that arise from being unemployed. However if you don't go private there isn't really anything in the existing system to help you - there's a long wait, ie a further requirement on our health services.

I don't know if you can actually define a percentage that the house of cards comes crashing down, so to speak. I think what pulls a country out of that economic spiral is a sharp, decisive action, something that's pushed quickly into place with a very firm aim and that is thoroughly carried out. Or a number of actions, happening in tandem with well-defined short/medium term goals. In other words, I'm not sure what we've been doing for the last 2 years is the solution. It's too wishy-washy, a series of vague actions consisting of lots of small bits with no defined end game in sight. What exactly we need I'm not entirely sure of, but as far as I can see it requires something along the following lines of
Reduce min wage
Reduce size of PS
Reduce PS wages
Reduce social welfare and welfare benefits
(all the above need to be done over a very short time period, ie a week/month, and by decent percentages, ie 15 - 20% possibly.In other words, not by degrees, with months of negotiation and wrangling)
Serious consideration to be given to our county councils and their set up;there are numerous ways to reduce costs there, but that's for another thread

Following that...
Reduction in bureaucratic red tape for business set up
Consistent, cast-in iron message to the EU that corporation tax is off the negotiating table for the next (say) 3 years to provide the "stability" that MNC's apparently want
Removal of board members/chairmen of all banks, and banks to be leaned very heavily on to ensure a flow of credit again (that's what seriously killing us at the moment)
Tax incentives for employers to take people on from the dole
Serious consideration to a (say) 5 year timetable for upgrade of our public transport systems around the country. To run NO LONGER than 5 years, preferably with a defined budget and with very specific end goals in sight, regarding number/types of systems to be provided
I would consider reducing VAT slightly again
FAS to be disbanded or broken down, possibly into 2 agencies - one to provide for those who are unskilled and unemployed, and one to provide for those with skills/qualifications who are unemployed. Only those people working in FAS to be utilised - ie no extra hiring/budgeting
Certain sectors to be highlighted as future areas for job creation and heavily invested in.

Anyway. The list could go on.The point I'm trying to make is that I don't think - and I seriously hope- that we will should get to this stage whereby we have this downward spiral effect. I think we saw it before - and the effect it had on society in this country was the increase in alcohol consumption.Every family had an alcoholic. And every family had members who emigrated. I am hoping we will have someone who has enough balls to step up and make some quick, instantly implemented and very,very unpopular decisions in order to try and push us back towards some semblance of a functioning economy.As far as I can see, that's the only way we might get out of this.

(sorry if that was rambling, I'm quite tired:o)