Sunday

Unemployment

Unemployment exists when demand is not sufficient to give jobs to all those seeking work. Therefore to reduce it surely all the government has to do is embark on a massive road building programme? Or maybe have the streets cleaned daily, the post delivered twice daily, reduce class sizes and double up the number of teachers.

Surely it is that easy isn't it?

Increase taxes, use the money to create jobs.

Bingo!

The end of unemployment except for those who are work-shy.

Or is it not that simple?
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3 comments:

  1. Anonymous10 March 2009 at 15:47

    It is not so simple.Because if there will be too high tax rates thereby people's real disposable income will be too low and so they will not have a stimulus to work hard and so productivity of labour will decrease; and also they may decide to be voluntary unemployed to live on Job Seekers Allowance. so increase tax rates will not be a good solution for the problem.

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  2. CHEE10 March 2009 at 23:05

    I think the case you are talking about is cyclical unemployment which is due to the lack of aggregate demend. There are other types of unemployment such as seasonal,structural, frictional unemployment and etc should be take into consideration.

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  3. Anonymous24 May 2009 at 12:24

    The way presented by you was pursued by the command economies of the Communist regimes during the cold war, and is still used in Cuba. However creating full employment, it decreases productivity and expands the public sector of the economy at the expense of private enterprise. In my opinion, the way forward is to do the reverse. Loosen the fiscal policy in order to encourage consumption and private sector enterprise, which in turn will create jobs

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