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Are you suggesting that workers who are laid off in other industries will all find work as servants working for the other people who haven't been laid off yet?

Are you suggesting that workers who are laid off in other industries will all find work as servants working for the other people who haven't been laid off yet? That's not how our economy works. Only a small percentage of the population can afford to hire maids, nannies and gardeners, and even the wealthiest people will only hire a certain number of them. Just using simple logic should show that if 1% of the working population were all able and willing to maintain a staff of 5 full-time servants, this would only be able to absorb 5% of the unemployed population. Structural unemployment has nothing to do with these servant-type jobs, and there is no way that these kinds of jobs can absorb unemployed workers laid off in other industries.

yummyfajitas 10y ago
Only a small percentage of the population can afford to hire maids, nannies and gardeners... This is true because we live in a situation of scarcity. In other economies (e.g. India) where labor is not so scarce, far more people can afford help. If people were actually willing to work, but simply couldn't find work, prices should drop so that a much larger percentage of the population could afford maids and nannies. Also, the unemployment rate in the US is 5.5%, i.e. the natural rate of unemployment. We simply don't have the problem of not enough jobs.
- legutierr 10y ago
  Yes, the middle class in India can afford help, but those servants live in conditions that in the US would be considered scandalous. India is not a good example at all to support your position, for this and a whole host of other reasons. > We simply don't have the problem of not enough jobs. I would argue that the proof of the emergence of structural unemployment is not in the current rate of unemployment, but in how long it took for us to return to this level after the housing crisis. Structural unemployment will manifest itself in longer and longer recovery times, always returning to near full-employment as the economy adjusts, until the point at which demand collapses and recovery becomes impossible. Like the tipping point that climate scientists talk about with regards to climate change, we have to implement a solution before we get to that point, because it might not be possible after. Basic Income, above all, should be embraced as a mechanism to stabilize consumer demand during the periods of radical realignment in the labor markets that will be brought on by robotics and AI.
  - yummyfajitas 10y ago
    Yes, India is a poor nation. Virtually everyone there - including the software engineers - is poorer than a burger flipper in the US. I would argue that the proof of the emergence of structural unemployment is not in the current rate of unemployment, but in how long it took for us to return to this level after the housing crisis. So your claim isn't that jobs don't exist, but merely that it takes people time to find them. How is a massive labor force disincentive like BI a solution to this problem at all? We already know that unemployment benefits make this problem worse: https://www.nber.org/papers/w20884 https://www.nber.org/papers/w20884 Why would BI - essentially permanent unemployment benefits - help? If anything the solution to this problem is just making labor markets more flexible. E.g., NGDP targeting, making it easier to hire/fire workers, eliminating employer mandate in Obamacare, discouraging home ownership, etc. [edit: here is non-paywalled link: http://econweb.umd.edu/~davis/eventpapers/ManovskiiEntensions.pdf http://econweb.umd.edu/~davis/eventpapers/ManovskiiEntension... ]
    - legutierr 10y ago
      > So your claim isn't that jobs don't exist, but merely that it takes people time to find them. No, my claim is that it will take more and more time for new jobs to be created, and for laid-off workers to retrain for them. At the beginning of a recession, the jobs don't exist because they have been destroyed, and they are only re-created because the persistence of demand for goods and services--driven primarily by consumer demand--compels it. I believe that at a certain point, in some future recession, that process will take so long, and will be so expensive, that supporting the levels of consumer demand necessary for economic recovery will be infeasible without government intervention at a scale even larger than what is envisioned with regards to basic income itself. That is, unless basic income is instituted first.

yummyfajitas 10y ago

Only a small percentage of the population can afford to hire maids, nannies and gardeners... This is true because we live in a situation of scarcity. In other economies (e.g. India) where labor is not so scarce, far more people can afford help. If people were actually willing to work, but simply couldn't find work, prices should drop so that a much larger percentage of the population could afford maids and nannies. Also, the unemployment rate in the US is 5.5%, i.e. the natural rate of unemployment. We simply don't have the problem of not enough jobs.

legutierr 10y ago
Yes, the middle class in India can afford help, but those servants live in conditions that in the US would be considered scandalous. India is not a good example at all to support your position, for this and a whole host of other reasons. > We simply don't have the problem of not enough jobs. I would argue that the proof of the emergence of structural unemployment is not in the current rate of unemployment, but in how long it took for us to return to this level after the housing crisis. Structural unemployment will manifest itself in longer and longer recovery times, always returning to near full-employment as the economy adjusts, until the point at which demand collapses and recovery becomes impossible. Like the tipping point that climate scientists talk about with regards to climate change, we have to implement a solution before we get to that point, because it might not be possible after. Basic Income, above all, should be embraced as a mechanism to stabilize consumer demand during the periods of radical realignment in the labor markets that will be brought on by robotics and AI.
- yummyfajitas 10y ago
  Yes, India is a poor nation. Virtually everyone there - including the software engineers - is poorer than a burger flipper in the US. I would argue that the proof of the emergence of structural unemployment is not in the current rate of unemployment, but in how long it took for us to return to this level after the housing crisis. So your claim isn't that jobs don't exist, but merely that it takes people time to find them. How is a massive labor force disincentive like BI a solution to this problem at all? We already know that unemployment benefits make this problem worse: https://www.nber.org/papers/w20884 https://www.nber.org/papers/w20884 Why would BI - essentially permanent unemployment benefits - help? If anything the solution to this problem is just making labor markets more flexible. E.g., NGDP targeting, making it easier to hire/fire workers, eliminating employer mandate in Obamacare, discouraging home ownership, etc. [edit: here is non-paywalled link: http://econweb.umd.edu/~davis/eventpapers/ManovskiiEntensions.pdf http://econweb.umd.edu/~davis/eventpapers/ManovskiiEntension... ]
  - legutierr 10y ago
    > So your claim isn't that jobs don't exist, but merely that it takes people time to find them. No, my claim is that it will take more and more time for new jobs to be created, and for laid-off workers to retrain for them. At the beginning of a recession, the jobs don't exist because they have been destroyed, and they are only re-created because the persistence of demand for goods and services--driven primarily by consumer demand--compels it. I believe that at a certain point, in some future recession, that process will take so long, and will be so expensive, that supporting the levels of consumer demand necessary for economic recovery will be infeasible without government intervention at a scale even larger than what is envisioned with regards to basic income itself. That is, unless basic income is instituted first.