Question:
What is the root cause of unemployment?
Charlie
2012-06-02 14:10:48 UTC
...too many workers for the available jobs?
22 answers:
Sara
2012-06-02 15:06:49 UTC
I worked for about five years with a company that was directly involved with outsourcing to China, and here's the thing.

To set a reasonable wholesale price on a product, you have to figure that the retail store will want a big markup on it. Add to this your transportation costs to get it to that store's warehouse, warehousing costs before you ship it, packaging, handling, and so on.

So there you're left with the deep desire to have Americans build your product, but the reality is the absolute need to keep the price down. So the Chinese factory wins the bid.



As Americans get poorer, they will not buy the best made brand, they will buy the cheapest brand. They have no choice. There is rent to pay or a mortgage, car payments, food, utilities. If the Chinese-made oven mitt is three dollars and the American-made is nine dollars, what do you think will happen?

So it feeds off itself.



In the meantime, we are trapped in cities, and as soon as prices rise on everything we buy, wives go to work to try to save the family finances. They find that the job market is abysmal, but they go to work anyway, for low wages, and feel grateful they have a job. This leaves the employers in a position of power, so that they can abuse those employees with little money, hard working conditions, and no benefits, and the employees won't leave.



By 1830, Americans were already writing and speaking about "the Good Old Days" so we know that things have been going downhill for a long time.

We no longer have family farms, or if people have a farm, they head out to work in the city every day to add to the rather poor income they collect from the land.
ugotthat
2012-06-02 14:29:11 UTC
Private industry never did provide the number of jobs necessary to keep the economy going.



Somehow people are of the mistaken belief that by giving tax breaks to the wealthy, jobs will be created. That hasn't happened. Romney's money is offshore for one thing and how many cars and homes can an individual buy? wealthy or not. Obviously like Romney, the wealthy are banking the tax cuts. People also think government workers don't buy cars, pay rent, get gas,buy clothes and eat. Not to mention the government buys office supplies, equipment, vehicles and leases space. How wealthy can a landlord get with a vacant building? Office Depot won't be doing too good if a major government account is lost either.



With the mad rush to shrink government, a good chunk of the economy just evaporates. So the wealthy are banking the tax cuts, unemployed government workers have no money to buy anything and neither do the other unemployed individuals. The few people who are working don't have the resources to make a difference either.



If I were wealthy no matter how many tax breaks I get, if my business doesn't have the sales to support an additional employee I'm not hiring anyone. I'll take your tax cut anyway. And run.



So unemployment remains high, the economy stagnant and the deficit soars. That's happening right in front of America and they choose to ignore it.
meg
2012-06-02 14:27:59 UTC
Too many workers, that is we work too much. With modern technology we can produce what we want with far lass labor than we use to need, so we do not have enough jobs that are worth a living wage and most people will not work for less.



Edit: Outsourcing makes the problem worse and so does low wages which cause some household to have two workers ( but low wage jobs would not exist it there was not high unemployment), but human labor was being replaced by more efficient technology before either was a problem, The increases in productivity decreased the number of hours people worked at a "full time job" from 60hrs in 1900 to 40hrs 1950 and we are sill working 40 hrs a week 60 years later,
Just Jess
2012-06-02 14:40:55 UTC
I'll grant that your additional details present a very dark scenario in a very subtle way, and your point is well made. It takes an extremely sick mind to see what you're saying, but I've got one of those; you're saying we should reduce the number of workers.



But that wouldn't work. There is always more work to do than people to do it. Some jobs require special training, and some jobs no one wants to do. There's a lot of industries that are always underemployed.



So I submit to you, that the only way to get 100% employment, would be slavery. Simply make decisions for other people about the direction their lives go.



Arguably, this is even worse than the already terrible idea you've suggested. So really this only backs up the point you're making. Unemployment is still a bad thing, but I agree completely we shouldn't be looking for root causes or be trying to find "final solutions" to the unemployment problem. Some unemployment is necessary for life to not be terrible for everyone.
Andy F
2012-06-02 14:34:29 UTC
I'm a Marxist, so here's a leftwing answer on this one.



But to be honest, this is probably a problem that is "over-determined." Meaning several different factors probably come together to cause unemployment, so that there isn't a SINGLE root.



If you're a botanist, think of unemployment as not having a single "tap root," like a carrot. Think of it as having several branching roots that go different directions in the soil.



Those many branching roots might include -- if I can play conservative for a moment -- poor work habits of the chronically jobless, bad education, laziness, over-reliance on government cheese, physical or mental disabilities that make some people inefficient at work -- also immigration & overpopulation.



If I want to be liberal, I'd include "greed" and insufficient consumer demand as causes of unemployment, too.



But to the degree there's a "tap root," a single MAJOR cause of unemployment, I think it's "private property" and the very unequal distribution of property in our society, joined with the division of the American people into different classes.



Why?



If we all shared the land in common, and if everyone was pretty much the same class, and we all survived through -- say, subsistence farming -- we might have a rotten society and a very poor one, but almost no one would be "unemployed." People who were hungry and without other work could turn to the commonly available land to support themselves.



This is kind of what many white Americans did in the 1800s when the government pushed the Indians out of the Midwest and there was widespread homesteading of the Great Plains by the pioneers. It wasn't "common land" after the homesteaders began farming it, but it was commonly available before then, and it provided 19th century white settlers in America with a safety valve when the economy turned bad.



But today, most white Americans no longer own our own little farms, ditto for most blacks and Hispanics. The skewed distribution of agricultural land and other resources -- eg gold mines, oil wells, etc. -- means individual "self-sufficiency" is no longer a realistic option for most people.



Many Americans own their own houses and cars, and an important minority owns and operates small businesses. But more and more, most Americans survive economically by working for other people.



When an economy is structured like this, some people get to be OWNERS and BOSSES, and others get to be WORKERS who must get hired by the bosses to earn money enough to live.



When the owners / bosses don't find it profitable to hire the workers -- especially when times are hard -- well, they won't hire new workers, and they may let go of already hired ones. Especially when the economy is bad, the bosses / owners will save money by "economizing" on labor. Some may almost have to do this to avoid business bankruptcy.



But as the owners/bossses let go of the workers to save on labor costs, a big fraction of the population may find itself unable to find work, at least in the private sector.



So as a Marxist, I'd say "capitalism" and "private property" -- well, make that "private property, that's unequally distributed" -- are together the most important causes of unemployment.



There's another factor that's really important, though. Capitalist businesses compete in the market, mostly on the basis of price. To reduce costs & lower prices, most capitalist businesses invest in higher "productivity" of labor when possible.



That is, the bosses/ owners keep investing in machines, automation, & process redesigns that allow them to produce more stuff with fewer workers, at a lower cost. This is fantastic for corporate efficiency, but naturally, it adds further to unemployment.



But if all working people all owned the property of America in common, or if the land & other resources were divided up among many different worker -owned cooperatives, Americans might be able to have higher "labor productivity" without job losses.



Worker/owners who controlled our own businesses and our own jobs -- in this imaginary, ideal universe -- might use machines & automation to increase our leisure or our wealth, or both. But we wouldn't eliminate jobs in the pursuit of profit -- even in a recession -- as capitalist owners often do, because it would be our OWN jobs at stake. We wouldn't fire ourselves to increase our profits; we'd find a way to keep going.



The fact that the uenequal capitalist distribution of property in the USA allows -- and encourages -- private businesses to increase profits by firing people is what makes unemployment a chronic problem.
Yvonne
2012-06-02 14:35:07 UTC
My answer is simple. Greed.



Somewhere along the way it became ok to "get mine" and to "get paid".



This goes for nearly every demographic in our current society. From CEO's to Union Leaders, to politicians, to senior citizens, to professional athletes, to able bodied 20 and 30 year olds getting SSI, to illegals being given earned income credit and more!



Point is, do you not think every CEO of the big three auto manufactures did not know any pullback in sales would not sink them? Sure they did. However, if you were the CEO and knew that if you could prop up the numbers for Wall Street for one or two more quarters, you would make millions? Why would you take on the unions when it cost you personaly millions?



I could go on and on, but I think greed is the answer.
anonymous
2012-06-02 14:31:08 UTC
Over-population.
anonymous
2012-06-02 14:18:29 UTC
Wrong.



Look at the small businesses that are going under.



Non essentials.



People are working two jobs just to stay afloat.



Wages are too low, health insurance too expensive, gas food and utilities (which are not factored into inflation) are too high.



THERE IS NO DEMAND FOR PRODUCTS AND SERVICES>
Texas Mike
2012-06-02 14:15:27 UTC
Government: From Pete Sessions Texas Congressman

.

Yesterday's jobs report underscores the failure of President Obama’s policies which have left too many Americans without jobs – including more than 50 percent of recent college graduates. The threat of higher taxes, ObamaCare and more bureaucratic red-tape creates uncertainty and discourages small businesses from creating jobs. Additionally, GDP grew at a sluggish rate of 1.9 percent in the first quarter of this year, further highlighting the need for real reforms to spur economic growth.

.

@Mike .. What? It is really over 15% considering those who gave up. And a lot more:



"88 million out of work and not looking for a job"



Also .. Romney can fix it..



"Bill Clinton criticizes Obama’s Bain attacks, praises Romney’s ‘sterling business career’"
Sassy One
2012-06-02 14:15:56 UTC
Recession. People have no money, they don't spend. Products not being bought, companies have to downsize. People get laid off. That's one. Jobs outsourced to other countries. That's two. BIG business not doing what they claim they do. You know the job creators? They are creating jobs alright. just not here. Greedy b@stards.
?
2017-02-09 21:38:24 UTC
1
commish
2012-06-02 14:18:27 UTC
Our economy is contracting. Many small businesses are closing because they can't keep up with all the regulations and taxes they are forced to deal with. If Obamacare is upheld it will crush small businesses with greater than 50 employees even more. It will discourage the growth of small businesses with less than 50 employees.
ingsoc1
2012-06-02 14:13:07 UTC
Ceo's making more then ever, outsourcing, and short term profit seeking over long term profits.



If minimum wage kept up with ceo pay it would be 25 dollars an hour



Go Union

bread and Roses
anonymous
2012-06-02 14:12:23 UTC
There is no singular root cause. There's various types of unemployment (cyclical, structural, etc.). If it were that easy to boil it down to one root cause, then unemployment could easily be remedied.
anonymous
2012-06-02 14:18:28 UTC
Greedy, unpatriotic business leaders who pwn the Republican party lock, stock, and barrel and are using it to sell off America for their personal gain, piece by piece.
Mike
2012-06-02 14:17:41 UTC
Since the unemployment rate is currently 8.2% nationally, that means 91.8% of those willing to work are employed. To answer your question, I'd go to the employers of those 91.8% and ask them your question.
anonymous
2012-06-02 14:12:18 UTC
Companies that outsource our jobs and in reward get tax breaks.
anonymous
2012-06-02 14:12:14 UTC
Our jobs were outsourced to Mexico and India.
anonymous
2012-06-02 14:18:23 UTC
Blame Obama and his economic recovery plan.
Tony
2012-06-02 14:12:22 UTC
government regulations and taxes
Citolduso
2012-06-02 14:14:27 UTC
Liberals and unions.
?
2012-06-02 14:11:27 UTC
Don't no


This content was originally posted on Y! Answers, a Q&A website that shut down in 2021.
Loading...