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The state of not being engaged in a gainful occupation

Unemployment or joblessness is the situation of actively looking for employment but not being currently employed. The unemployment rate is a measure of the prevalence of unemployment and it is calculated as a percentage by dividing the number of unemployed individuals by all individuals currently in the labor force. During periods of recession, an economy usually experiences a relatively high unemployment rate.


The Bridge of Asses, by Lew Rockwell, Mises Daily, 2 Oct 2003
Argues that minimum wage legislation is "the pons asinorum of the relationship between economics and politics", explaining that labor prices (wages) are no different from other prices in the marketplace
In discussions of the minimum wage, the question always arises: does it lead to unemployment as measured by the data? What follows is a blizzard of studies, some showing that unemployment goes up after the laws are passed, some seeming to show no change, and even some seeming to show that unemployment goes down. What all these amount to is [a] fallacious leap ... to show that because one event followed another, the latter event must have necessarily been caused by the former. Human engagement in a market setting is actually too complicated to be captured by such statistical manipulations.
Catallactic Unemployment, by Ludwig von Mises, Human Action, 1949
Chapter 21 "Work and Wages", Section 4; defines catallactic or market-generated unemployment, details reasons why some people choose to remain unemployed and discusses "frictional" and institutional unemployment
What causes unemployment is the fact that--contrary to the above-mentioned doctrine of the worker's inability to wait--those eager to earn wages can and do wait. A job-seeker who does not want to wait will always get a job in the unhampered market economy in which there is always unused capacity of natural resources and very often also unused capacity of produced factors of production. It is only necessary for him either to reduce the amount of pay he is asking for or to alter his occupation or his place of work.
The Cure for Unemployment, by Roland W. Holmes, The Freeman, Jul 1982
... what is the 'appropriate relationship' between wage-rates and prices? ... Allow every person looking for work to accept a job at the highest wage he can get. Let him bid freely. ... The cure for unemployment is free competition for jobs. Only a free market can arrive at 'the appropriate relationship' ...
The French Employment Fiasco, by Llewellyn H. Rockwell, Jr., Mises Daily, 11 Apr 2006
Discusses the business and labor situation in France where a 2006 law deregulating job contracts led to protests and a repeal of the law
When we speak of unemployment, we cannot be talking about a shortage of jobs to be done. There is always work to do at some price ... [T]here can be no such thing as involuntary unemployment in a free market. Everyone who wants to work is working and everyone who does not ... is in that position by choice ... There are only two reasons for unemployment: legal restrictions that forbid contracts from forming ... and price restrictions that prevent the market for labor from clearing ... [I]nvoluntary unemployment is always and everywhere brought about by ... government restriction of the market.
Related Topics: France, Free Market, Labor
The Great Lie of Modern Unions, by Wendy McElroy, 31 Oct 2013
Details the history of labor organizing, from the Knights of Labor in 1869 to the 1935 Wagner Act
Government and big business had learned a lesson. An uncontrolled labor movement was politically and economically dangerous. The situation worsened with the Great Depression in which unemployment rose as high as 25 percent. Hundreds of thousands of people roamed America, looking for work. A massive and migrating army of the unemployed is a formula for political revolt. Thus, Roosevelt offered a New Deal in order to create stability. Big business embraced the deal because it also created predictability. Ambitious labor leaders saw the power being proffered their way; they became big labor.
Related Topics: Labor, Monopoly, World War I
How the Welfare State Corrupted Sweden, by Per Bylund, Mises Daily, 31 May 2006
In a recently televised discussion ..., the children and grandchildren of the welfare state met to discuss unemployment ... The demand of the 'grandchildren' was literally that the 'old people' (born in the late 1940s, 1950s and 1960s) should step aside (i.e., stop working) because their working 'steals' jobs from the young!
How We Privatized Social Security in Chile, by José Piñera, The Freeman, Jul 1997
Explains how the Chilean private pension system works and how the previous government-controlled system was transformed into the current one (the author was the Secretary of Labor and Social Security under Pinochet and designed the new system)
Chile has eliminated the payroll tax, which, by making it more expensive for employers to create jobs, put a damper on employment. Chilean unemployment is around 5 percent—and without the disguised unemployment of government make-work jobs. By contrast, in the Western European welfare states, unemployment is generally between 10 percent and 25 percent ... Just imagine how this idea could energize the U.S. economy ... Payroll taxes would be cut and ultimately eliminated, contributing to higher employment, higher wages, or both.
Immortal Keynes?, by Sheldon Richman, The Goal Is Freedom, 23 May 2014
Examines reasons for the continued acceptance of Keynes' economic prescriptions, surveying Lawrence H. White's The Clash of Economic Ideas: The Great Policy Debates and Experiments of the Last Hundred Years (2012)
Krugman went on,
Instead, Keynes saw it as his job to explain why the economy sometimes operates far below full employment ... Rather than getting bogged down in ... the business cycle ... Keynes focused on a question that could be answered. And ... the question that most needed an answer: given that overall demand is depressed—never mind why—how can we create more employment?
Indeed, if you're trying to end mass unemployment, why would you want to get bogged down trying to understand what actually caused [it]? It's not as though the cause could be expected to shed light on the remedy.
Related Topics: Economics, F. A. Hayek
"Living wage" kills jobs, by Thomas Sowell, 5 Nov 2003
Explains what a "living wage" is supposed to be and the effect that "artificially higher wage rates" have on employment
Most studies of minimum wage laws in countries around the world show that fewer people are employed at artificially higher wage rates. Moreover, unemployment falls disproportionately on lower skilled workers, younger and inexperienced workers, and workers from minority groups. The new Cato Institute study cites data showing job losses in places where living wage laws have been imposed. ... As imposed wage rates rise, so do job qualifications, so that less skilled or less experienced workers become 'unemployable.' Think about it. Every one of us would be 'unemployable' if our pay rates were raised high enough.
Related Topic: Minimum Wage Laws
Milton Friedman (1912-2006), by Richard M. Ebeling, Sheldon Richman, 17 Nov 2006
Memorial tribute, highlighting Friedman's role in opposing Keynesianism, and his books and other public activities (a revised version appeared in The Freeman Dec 2006)
[Friedman] said that the amount of unemployment at any time was determined by changing supply-and-demand conditions in the market and people's expectations about the future rate of inflation, which influenced their resource-price and wage demands. The monetary authority could fool people by increasing the inflation rate above people's expectations ... But over time, as people discovered the truth about the rate of inflation, they would demand higher wages and resource prices to compensate ... That would reduce profit margins and return unemployment to its "natural" level.
Minimum wage, Maximum folly, by Walter E. Williams, 23 Mar 2005
Discusses proposals by senators Kennedy and Santorum to increase minimum wage rates, both of which failed to pass, and the effects of such laws, particularly regarding black teen unemployment
Bureau of Labor Statistics unemployment data confirms the economic prediction about minimum-wage effects. Currently, the teen unemployment rate is 16% for whites and 32% for blacks. In 1948, the unemployment rate for black teens (16-17) was lower (9.4%) than white teens (10.2%). ... while there was a minimum wage of 40 cents an hour prior to 1948, it had been essentially repealed by the post-World War II inflation; however, with successive increases in the minimum wage, black teen unemployment rose relative to white teens to where it has become permanently double that of white teens.
Related Topic: Minimum Wage Laws
Minimum Wage Rates, by Ludwig von Mises, Human Action, 1949
Chapter 30, "Interference With the Structure of Prices", Section 3; discusses the setting of minimun wages both by legislation and by collecitve bargaining, pointing out some of the resulting problems
Assistance granted to the unemployed does not dispose of unemployment. It makes it easier for the unemployed to remain idle. The nearer the allowance comes to the height at which the unhampered market would have fixed the wage rate, the less incentive it offers to the beneficiary to look for a new job. It is a means of making unemployment last rather than of making it disappear.
Monetary Central Planning and the State, Part XVIII: Say's Law of Markets and Keynesian Economics, by Richard M. Ebeling, Freedom Daily, Jun 1998
Contrasts the views of John Maynard Keynes with "the commonsense foundations of economics" by explaining the basics of exchange and markets, and discussing Say's Law and John Stuart Mill's refinement
Free-market economists ... never denied that the market economy could face a situation in which mass unemployment exists and a sizable portion of ... productive capacity is left idle. But if such a situation were to arise, they argued that its cause was to be found in a failure of suppliers to price their goods and ... services to reflect what consumers considered them to be worth, given the demand for various other things, including money. Correct prices always ensure full employment; [they] always ensure that supplies create a demand for them; [they] always ensure the harmony of the market.
Monetary Central Planning and the State, Part XXIV: Milton Friedman's Framework for Economic Stability, by Richard M. Ebeling, Freedom Daily, Dec 1998
Describes Friedman's criticisms of Keynesian policies and examines Friedman's own proposals for government intervention in the economy
In a 1951 essay, "The Effects of a Full-Employment Policy on Economic Stability," Friedman showed that ... Keynesian policies were likely to generate more ... instability ... The Keynesian presumption had been that any observed deviations in macroeconomic employment and output from a targeted level of full employment should immediately bring a response through increases or decreases in taxes and government spending to move the economy back to its appropriate full-employment level ... Friedman pointed out that three time lags were likely to prevent the smooth success of such Keynesian policies.
Monetary Central Planning and the State, Part XXVI: Milton Friedman and the Monetary "Rule" for Economic Stability, by Richard M. Ebeling, Freedom Daily, Feb 1999
Examines Friedman's arguments, in a 1967 speech to the American Economic Association, about what monetary policy could not accomplish and his defense of a paper money standard in the 1960 book A Program for Monetary Stability
Friedman argued, monetary policy could not permanently push unemployment below a market-determined "natural rate." Over any period of time, there is always a certain amount of unemployment owing to several factors. For example, normal changes in supply and demand throughout an economy are always resulting in a certain amount of shifting of the labor force among various sectors of the economy ... Also, there are various institutional rigidities that result in a certain amount of unemployment: minimum-wage laws, trade-union restrictions ..., regulatory controls ..., and welfare programs ...
Money and Gold in the 1920s and 1930s: An Austrian View, by Joseph T. Salerno, The Freeman, Oct 1999
Criticizes Richard Timberlake's The Freeman articles on U.S. monetary policy during 1920-39, contrasting the British Banking School vs. Currency School definitions of inflation
Unfortunately Timberlake's strained and narrow emphasis on Fed deflationism as the cause of all the woes of the 1930s causes him to ignore a plausible "Austrian" explanation of the relapse of 1937. As a result of a spurt of union activity due to the Supreme Court's upholding of the National Labor Relations Act of 1935, money wages jumped 13.7 percent in the first three quarters of 1937. This sudden jump in the price of labor far outstripped the rise in output prices and, with labor productivity substantially unchanged, brought about a sharp decline in employment beginning in late 1937.
The Myth of War Prosperity, Part 2, by Anthony Gregory, Freedom Daily, Jan 2007
Main part of the review of Depression, War, and Cold War: Studies in Political Economy (2006) by Robert Higgs
Higgs analyzes the various ways in which the economy supposedly improved. In terms of the unemployment rate's plummeting, "... In 1940, before the mobilization [for war], the unemployment rate ... was 9.5 percent. During the war, the government pulled the equivalent of 22 percent of the prewar labor force into the armed forces. Voilà—the unemployment rate dropped to a very low level." And Higgs reminds the reader that "... Of the 16 million persons who served ... 10 million were conscripted ..." For all these people, being employed did not exactly mean an improvement in their standard of living.
Out of Work: Unemployment and Government in Twentieth-Century America, by Richard Ebeling, Freedom Daily, Oct 1993
Review of Out of Work: Unemployment and Government in Twentieth-Century America (1993) by Richard K. Vedder and Lowell E. Gallaway
In 1932, the English economist Edwin Cannan ... explained that people were wrong when they said that millions were unemployed because there was not enough demand for the services those unemployed could potentially render. ... The view that unemployment is caused by wage demands too high in relation to the wages employers are willing and able to pay has been out of favor for more than fifty years. ... Richard K. Vedder and Lowell E. Gallaway ... defend the pre-Keynesian view of the cause of unemployment and explain government's role in making unemployment a significant problem in modern America.
Related Topics: Ludwig von Mises, Wages
Protectionism and Unemployment, by Hans F. Sennholz, The Freeman, Mar 1985
Discusses why foreign and domestic trade are both beneficial, mercantilism and neo-mercantilism, the groups wanting tariffs and protectionism, the effects of trade restrictions on labor, the factors affecting industry competitiveness and more
Unemployment undoubtedly is a great social evil that concerns us all. It is an economic phenomenon of loss and waste that harms not only the jobless but also their fellow workers who are forced to support them. In time it tends to turn into a political issue that breeds confrontation and conflict. To alleviate the evils of unemployment becomes an important political task. But it also raises the basic question of the suitability of the policies that are to create employment ... [C]an tariff barriers and other trade restrictions raise the demand for labor and alleviate the evils of unemployment?
Say's Law and the Keynesian Revolution, by Richard Ebeling, Freedom Daily, Feb 1999
Review of Say's Law and the Keynesian Revolution: How Macroeconomic Theory Lost Its Way (1998) by Steven Kates
... Keynes said that the classical economists had believed that "supply creates its own demand," and that therefore unemployment was impossible ... Since periods of depression and widespread unemployment had happened ... and one was being experienced ..., clearly the classical economists had been wrong ... Government spending needed to fill the gap left by private-sector demand to ensure full employment for all. Kates refutes Keynes's caricature of the classical economists. He clearly explains what they really understood as "the law of markets," why extensive unemployment sometimes occurred, and what they saw as the solution ...
Related Topics: Japan, Prices, Jean-Baptiste Say
Unemployment by Legal Decree, by Bettina Bien Greaves, The Freeman, Aug 1956
Discusses the $1.00 an hour minimum wage law passed in March 1956 and its effects, in particular, in Puerto Rico where the legal minimum appeared to be already too high for that market
... the International Ladies Garment Workers Union ... had organized one group of the island's garment workers, the brassiere makers. Their pay then averaged about 80¢ an hour. Mr. Dubinsky feared that the $1.00 minimum wage, if it were enforced, would mean unemployment for many of the members of his union in Puerto Rico. According to newspaper reports ... he charged that Puerto Rican legislators were trying to 'play a trick on us by giving us for political reasons a high minimum in brassieres and later blaming it on Dubinsky and the ILGWU that the workers are starving and have no work.'
Related Topics: Minimum Wage Laws, Wages
What About Immigration?, by Julian Simon, The Freeman, Jan 1986
Examines the economic impact of immigration to the United States, including actual levels of legal and illegal immigration, effect on unemployment, wages, services used, taxes paid and productivity
The most politically powerful argument against admitting immigrants has been that they take jobs held by natives and thereby increase native unemployment. The logic is simple: If the number of jobs is fixed, and immigrants occupy some jobs, then there are fewer jobs available for natives. Theory says that there must be some short-run unemployment in some sectors as a result of immigration. But theory does not say whether the effect will be huge or trivial. And no empirical study has found such unemployment in noticeable amounts. Even in the few sectors where immigrants concentrate ...
Related Topics: Taxation, United States, Wages
Why Government Can't Create Jobs, by Mark Ahlseen, The Freeman, Oct 1993
... it is a fallacy of the Keynesian legacy that government can reduce unemployment by priming the pump with spending programs. Government needs to reduce spending and taxes in order to leave income in the hands of individuals who earned it and who can spend it much more efficiently than the government can.


Chris Hedges on Reporting on War—And Paying For It, by Lew Rockwell, Bill Moyers, NOW with Bill Moyers, 7 Mar 2003
Conducted two weeks before the invasion of Iraq; topics include: the economy, the budget deficit and national debt, inflation, Republican vs. Democrat presidents, tax cuts, war spending, World War II and the depression, Sadam Hussein and unemployment
ROCKWELL: ... [T]his illustrates the basic fallacy at the heart of the welfare state ... [I]t subsidizes what it seeks to prevent, or pretends to cure. So, it subsidizes unemployment. I remember when Mr. Bush, Sr. ... was running for re-election, and there was concern about the unemployment rate, and so he passed a vast expansion of unemployment benefits, and gee ... the unemployment rate went way up when people could get more money for a longer period of time staying unemployed. So, if the government is subsidizing unemployment, ... I think it's very socially destructive.

The introductory paragraph uses material from the Wikipedia article "Unemployment" as of 3 Dec 2018, which is released under the Creative Commons Attribution-Share-Alike License 3.0.