Monday, February 18, 2008

Unemployment rate

Introduction
Every country in the world is working towards zero unemployment rate, or 100% employment rate.

"Problems"
High unemployment rate is a problem.

"Solutions"
Ensure everyone are employed.

My views
Is unemployement a problem? ... I don't think so.

Should we achieve zero unemployment rate by discouraging
a) technology advances, which reduce the number of jobs? This is about number of jobs versus productivity.
b) stay at home moms, if these are technically considered as unemployed? The subtle but significant economic values of "stay at home moms" seem to be totally out of all equations in economic growths.
c) outsourcing, which reduce the job opportunities of locals? This is a battle between local people immediate welfare versus the potential growth and long term welfare for the locals.

Should we increase employment rate by
a) creating/keeping unnecessary jobs so that there are more jobs in the market? E.g. employing people to collect tolls along an expressway versus implementing ERP-like systems to automate collections.
b) breaking up a task into many sub-tasks so that many people can be employed for each little sub-task? E.g. Once I was at a neighbor country's government office, there were 4 staff. Two deal with divorce cases, while two deal with registration of marriage registered in a foreign country. Of the former two, one will briefly check that the required documents are ready, while the 2nd one proceed on with the registration.

I believe good economists are aware of all these. Just as good doctors know that fever is not an illness, while majority of the people only focus on lowering down the temperatures by all sort of ways from taking Panadol to putting ice on forehead.

No comments: