Big Head Press

L. Neil Smith's
Number 558, February 21, 2010

"Voluntary servitude has consequences."

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Real Unemployment
by Rob Sandwell

Attribute to The Libertarian Enterprise

"Real Unemployment"

It's confusing. Even if you believe the government, and I don't recommend you do, you get numbers everywhere between nine and twenty-two percent unemployment, depending on how, and who, they count. It could be more, it could be less, but everyone can tell you, it's a lot.

You don't have to be an economist to know that people are looking for jobs. Where I work, we have two to six people come in asking for a job every day. We aren't hiring. We aren't advertising that we're hiring. We tell everyone who comes in that we aren't hiring. And every day, another half dozen people come in looking for a job.

Luckily, Barack has informed us that the worst is behind us. In his State of The Union address, he was quick to point out how his many initiatives have helped salvage the economy. My favorite bit was,

"Because of the steps we took, there are about two million Americans working right now who would otherwise be unemployed. 200,000 work in construction and clean energy. 300,000 are teachers and other education workers. Tens of thousands are cops, firefighters, correctional officers, and first responders. And we are on track to add another one and a half million jobs to this total by the end of the year."

The first, most glaring point to me when I watched these words slither off his tongue was that each of the jobs he's celebrating are government jobs. These aren't real jobs. This is simply an increase in state dependence. Why would we celebrate more cops? More prison guards? Wouldn't a sane society celebrate less cops and prison guards?

Of course, anyone who has read Hazlitt's Economics in One Lesson could instantly point out the major fallacy in Obama's speech. Every dollar the government spends it must first remove from the economy through either taxation or inflation. When Obama lies about the jobs his administration has saved, he completely ignores the fact that if they hadn't stolen at gun point the money used to create those jobs in the first place, that money would still be in the market employing people and creating opportunities which will never now exist thanks to the actions of his administration.

But that isn't all. It isn't as simple as taking one dollar from the market and spending one dollar on a government job. There are tax forms to print, and tax collectors to pay, and bureaucrats to pay, and offices they sit in which need to be built, and lit, and heated, and cooled. They need id badges and parking spaces and name plates on their desks. And all of this has to be paid for.

So for every dollar they use to "create" a new job, they have to spend several dollars on the infrastructure necessary to make that possible. How much money is sinking into that black hole? Two dollars for one? Three? More? It isn't enough to argue that these expenses are also added to the economy. That is simply the fallacy of the broken window.

And why are there all these people looking for work anyway? We know they want jobs, because they are coming in every day asking for them. And we know employers want employees; because they already have them and every employer would want to improve the quality of his staff by hiring more, and better, employees to replace the less valuable ones.

So why can't prospective employees find jobs?

Any time you have a commodity and a market demand, the only reason you would fail to sell your product is price point. Everything else is negotiable compared to the price. Don't like it in red? What if we drop the price? Want it bigger? We'll increase the price. Everything can be negotiated in comparison to price. And if you can't lower your price to a level where you can both move the product and make a profit, then there isn't sufficient demand for the product in the marketplace.

But we know there's a demand for labor. It's a commodity like any other, and is subject to the same laws of economics. So why can't the seller of labor, the employee, lower his price point to a level at which it the employer is willing to buy?

The answer is violence. The state, through the minimum wage, overtime legislation, age restrictions, and restrictive regulation, has created an artificial floor for the price of labor. And they enforce that price floor at the point of a gun.

Don't you think that someone who has no job would be happy to work for five, or four, or three dollars? After all, the difference between five and seven dollars an hour is negligible, while the difference between zero and five is life and death. Given the option, employees could take lower paying jobs while they looked for more lucrative work. They might even prove their worth to that employer and be promoted to a higher paying position.

But none of that can happen in the presence of the artificial price floor. So those employees are simply unable to work. And the employers have less capital with which to hire because the state has seized their assets to hire and pay their own employees instead.

In the end, it doesn't really matter if the number is five or ten or twenty two percent unemployment. The "real" issue with unemployment is the gun that is being jammed against the heads of every person looking for work and every businessman looking to hire. The "real" unemployment figures are the metaphoric bodies that line the streets of our cities. The bodies of men and women, fathers and mothers, husbands and wives, who would work, if they could do so without fear of being shot.

Obama is so proud of himself. The Democrats are so proud of themselves. The Republicans are so proud of themselves. They dine on the flesh of their victims and play their narcissistic little games where they stand and clap, or stand and don't clap, or clap but don't stand.

And all the while, "real" people are starving in our cities and in our fields, because they can't find work.

The slave masters used to beat the slaves who didn't work. Somewhere along the line that changed.


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