Among all benefits offered by the industrial world, few values are crucial with regard to an individual. Universally, people are sensitive to life conditions, from the choice of residential area to small luxuries of day-to-day life. Being in possession of a job means both the convenient lifestyle and professional satisfaction. Contrastingly, the status of being unemployed imposes strict limitations and protracted misery.
Modern society accommodates both categories, though beyond comfortable proportion. Economies struggle to absorb at least some part of the impact. The purpose of this essay is to outline reasons and effects of unemployment from historical perspective, analyze the current situation, and discuss ways of potential amendments. Both economic and social consequences of unemployment are put under consideration, as well as its implications for the different age, gender, and social groups. Finally, relief tactics and strategy are discussed, along with the unemployment protection laws and their effectiveness. Those measures are of particular importance today, as the most recent global crisis continues to challenge the world of industrial capitalism.
Depressing shades of the progress.
There are many definitions of unemployment and its varieties. In an essence, “unemployment ... describes the situation of individuals who desire to work but are unable to trade their skills and labour for pay” (Aamaas 9). Throughout the entire historical course of human civilisation, the unemployment is still relatively new phenomenon. Prior to the industrialization, the choice between working and not working was determined only by the individual’s ability to perform certain physical activities. According to Walters, “...unemployment becomes a salient political and theoretical issue from the 1880s, and not before. ...although unemployment and under-employment were common features of eighteenth and early nineteenth century social and economic life, the way they were experienced then was not the same” (14). By the end of nineteenth century unemployment has started to gain its distinctive features, but still bore marks of the pre-industrial society and economy. The work was not yet as narrowly specialized as it would soon become, therefore workers were free to chose from the variety of occupations available in their town or wider area. The very urban environment, one of the most important unemployment’s prerequisites, was not yet fully formed. As Walter cites, “urbanization itself had not yet gone so far that most workers and their families could not have some access to the “free” resources of the countryside... A mixture of outdoor relief, a diversified labour market, and mutual aid in traditionally-oriented families and communities softened the impact” (14).
Nevertheless, unemployment has attained its modern characteristics by the beginning of twentieth century. Mass layoffs and reduced demand for unqualified workforce were the first causes for the formation of “unemployed” social stratum. Engbersen et al. emphasizes that “...the closing down of factories and the introduction of modern work-saving production technology in manufacturing were the main reasons for dismissals” (66). There was still some relief available, mostly represented by casual and seasonal jobs – the viable option for certain categories of workers even in the modern economy. However, “...casual labour was seen in large part to be a problem of the maldistribution of population in relation to employment” (Walters 29). Eventually, the unemployed grew in number and were effectively sealed inside urban areas.
This situation is not necessarily damaging to the society as a whole; reasonably limited unemployment rate actually favours the capitalist industry and creates a balance of forces. On the one hand, there is a constant need for workers, and it is good to have an unconditional supply. On the other hand, it is a lure for the industry to cut wages; and it is when the trade unions traditionally intervene. Despite their seemingly firm resolution to fight the unemployment, motion is rather perfunctory. Instead, every three years in the USA and Canada, and every year in Europe, unions bargain for wages. According to Layard et al., “...unions almost always insist that firms pay the same wage to new workers as to existing workers with the same qualifications” (90). Such a situation hardly favours the unemployed en masse, but helps to preserve the equilibrium. The two-tier wage structure would provoke companies into gradually replacing workers, and low-paid workers will form a majority, which is easy to manipulate. However, it seems that progressive incentive schemas might have allowed for more labour force to be involved in the production work. Thus, unions actually help maintaining the level of unemployment.
Like any other social phenomenon, unemployment tends to fluctuate, reflecting the particular industry’s health and state of the economy as a whole. Those fluctuations are nearly impossible to predict, as there are so many aspects that add to the equation. On top of the world-wide tendencies, labour market is heavily affected by the import prices, taxes, social politics, and immigration scale. Any combination of these diverse factors may result in a sudden spurt of the unemployment rate. In turn, it strikes back at the economy, demanding social subsidies and welfares.
Whatever all the consequences may be, the heaviest is an individual impact. Of course, there can be a voluntary unemployment, if social insurance is as comprehensive as, for example, in Sweden. Many prefer “to remain in a welfare situation. For them, the advantages of living on welfare are more attractive than the income and obligations of a formal job” (Engbersen et al. 179). Likewise, some social groups could be traditionally more unemployed than others, regardless of the current demand on professions. Contrastingly, some nations’ cultures contribute to the work perception of the population, forcing people to take even second-rate jobs rather than become unemployed. For the majority, however, sudden unemployment means the stark contrast in life standards.
Historically, men are more susceptible to the pains of unemployment as they are traditional breadwinners for the family. In recent decades the difference has virtually disappeared. Both genders strive to work and be competitive, and for both it is equally difficult to find a new job. As Aamaas puts it, “in parallel to dealing with the very fact of being labelled ’unemployed’, understanding the causes of having become so, and facing the demoralizing prospect of heading to the unemployment office to ask for money, people somehow have to find a way to become employed again” (71). Apart from the constant stress brought by uncomfortable status, the job search itself is very demanding, as “... seriously looking for a job is a full-time task by itself” (Valentiner 2). According to Aamaas, this implies a range of necessary skills, including: “assessing one’s competences; managing thought processes about status and identity; continuing to engage in basic activities such as shopping and maintaining self-hygiene; thinking of ways to reframe existing skills in new markets; thinking of resources to use in the search for new work; interacting with people in a positive way, i.e., to present oneself as employable” (71). It is not surprising that aggression often follows the strain of unemployed life. Widely published works encourage the aggressive individualism: “Tendency is that if you don’t put yourself in the front spot, others will use you and abuse you and you should never let that happen to you” (Valentiner 90). Disputable point, but it forms the public perception along with the other multiple side effects of unemployment. In this regard, it is worth noting that market economy (as money itself in essence) has the value only when based upon the firm public confidence. Clearly, an army of unemployed does not contribute to it and hardly inspire any faith in the faulty economic model.
Every industrial country develops the set of unemployment protection laws that guarantee welfares and, to some extent, the possibility to be re-employed. Employment agencies facilitate a job placement process, though opportunities are restricted by the general market conditions. The level of social protection against unemployment differs significantly among industrial countries. Apart from the diverse amounts of financial aid, there are some ‘passive’ unemployment benefits. According to Layard et al., “countries vary enormously in what they spend on (a) placement and counselling services (plus administration), (b) training of adult unemployed, and (c) direct job creation and recruitment subsides” (51). As social programmes vary with the scale of unemployment, the most accurate aid figures can be obtained by measuring the expenditure per unemployed individual, relative to the output per worker. For example, the all-European research conducted in 1987 has shown that Swedes are committed much more than any other country and Germany outstrips any other EC country, with 34.6% and 10.4% respectively per unemployed person as % of output per person (Layard et al. 51).
Speaking of possible solutions, it is hard to find a new approach within boundaries of the modern economy. The universal formula of increased investments implies that “...relatively high levels of investment over the long term tend, all else being equal, to generate relatively high rates of economic growth, and those high rates of growth, in turn, tend to drag down the level of unemployment” (Bermeo 39). However, in a present-day crisis, there are just few options for attracting investments, mostly represented by Chinese economy and, to some extent, Russian oil oligarch’s money. Countries are not too willing to get investments from those sources if they can help it. Though the repayment terms are less harsh than those of IMF, the long-term obligations are hardly acceptable.
Another traditional approach to fight the unemployment is exploited by the unions. Even though their tactics has evolved significantly, “... new patterns and arrangements did retain some features of the older, more explicitly “corporatist” forms [of union’s activities] – for example, in involving governments in agreements” (Bermeo 34). Judging by their achievements to date, it is clear that little reliance can be placed upon the trade unions influencing the unemployment problem.
It seems that there are just two viable options, both used to produce good results. The first one envisages the launch of nation-wide infrastructure projects, heavily subsidized by state. Historically, infrastructure projects are able to boost the economy, as they also involve numerous adjacent industries. The second option is the labour migration, especially feasible in such formations as the EU. Regardless of some implications, it is attractive for the younger category of unemployed and, in long term, benefits the host country.
The most recent global economy crisis has not yet run its course. Despite all the frantic attempts to stabilize the situation, wages are still being cut and the unemployed ranks grow. Of course, governments are not happy about the situation, as unemployed voters pose no confidence in them. However, there are hopeful signs. With the recent bailouts of countries that were hit most severely, and gradual transition from the consumerism mindset toward the more sober lifestyle, the unemployment rate might start shrinking. There is a chance that from now on governments will keep in mind the reasons for unemployment growth, the effect it has upon the economy, and the necessity of timely prevention measures. In the meantime, unemployment can only be reduced through the infrastructural projects, selective investments, and the labour force migration.