Spanish Unemployment At ~25%, How Can This Be Sustained?

[pcgame]

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[Liberty74]

And the real rate in the U.S. is?

Depends on which equation you use. It's somewhere between 12-18% nation wide.

Singapore's economy which is far more free market than the U.S. - we have a highly controlled government market through tens of thousands of regulations and over 70,000 page of tax laws - only has (Singapore) an unemployment rate of 3-4%. Their debt to GDP is very small as well.

The problem with our economy is we don't have free markets. We haven't had such since 1913 when the federal reserve and the IRS system came to be. Every generation since then the U.S. has moved closer to socialism and marxism. That's the problem.

[InTradePro]

Close to 20% but not over.

With black and grey market employment included around 12 to 15% would be my guess.

Only 20%? How come?

Total US population: 312,477,519
18-65 yr old Civilians in the USA: 196,860,836 (63% of people)
18-65 yr olds who are Employed: 132,317,000 (BLS figure for September 2011)
People in Prison: 2,200,000
People in Colleges: 14,261,800 (many are IN the workforce or looking as well)
Updated overall civilian base population: 180,399,036
Unemployed people not in Prison or College available for work: 48,082,036

So those figures give you...............................

(maximum) Percentage of people working = 72.9%
(MINIMUM!!!!!) Unemployment rate = 26.7%!!!
(Maximum) Unemployment rate = 33%!!!!!!!!!!

[Zippyjuan]

The question is not how can it be sustained but how can the cycle be broken and get firms to start hiring again. They likely aren't going to start hiring until they are selling more goods and services and people won't be buying more goods and services until they have more money to spend (ie more jobs or raises at the ones they have). It is a vicious cycle and hard to break. If there is no demand for goods giving tax breaks to producers won't force them to expand. It may help them hire more once things do begin to pick up but while demand is weak they won't be seeking to grow.

[Knighted]

The question is not how can it be sustained but how can the cycle be broken and get firms to start hiring again. They likely aren't going to start hiring until they are selling more goods and services and people won't be buying more goods and services until they have more money to spend (ie more jobs or raises at the ones they have). It is a vicious cycle and hard to break.

I don't think it's as difficult to break as the left would imply. A common story we hear from the left is that if the government didn't step in and intervene in the markets, the economy might -never- recover and simply stagnate forever. History of course, which includes hundreds of years before significant recession intervention took place, seems to contradict this notion.

But how can the cycle be broken you ask? The same way it has been broken in the past when there is minor or no government intervention. As companies greatly trim their fat, lay off needless workers, give more responsibilities to existing workers, cut unnecessary costs, and take austerity measures to stay afloat, productivity grows by leaps and bounds as a result of those actions. More work can be done by less people and it can be done more efficiently than before. On a national scale, this improves the buying power of all Americans since income growth is directly tied to productivity growth. There will be a period of unpleasantness during this, particularly by the workers most affected - no question about it. It may even be an extended period of unpleasantness if the bubble has been blown up too big for too long. But overall, this transitioning period for the economy where excesses and inefficiencies are wrung from the system (part of which is the process that is known as 'creative destruction' which leads to innovation) is an incredibly positive force for the economy as a whole in the long run.

[Zippyjuan]

On a national scale, this improves the buying power of all Americans since income growth is directly tied to productivity growth.

How did national buying power increase? Those working were not given raise and those who lost jobs or hours are making less. Who is making more? It is also possible to have productivity growth without wage growth- that can happen if the benefits of this higher productivity are taken by the employers or share holders in the form of higher profits instead of being passed along to workers or to consumers in the form of lower prices.

It is precisely this "transitional period" we(or Spain in our example but it applies to us as well) are trying to deal with- how do we get out of it? What will get companies to hire more people?

[Paul Or Nothing II]

How did national buying power increase?

Prices are falling which mean people can buy stuff $ dollars than they earlier could; that's what matters, if you have a million dollars & you can't buy sh!t with it then what's the point so it's the PURCHASING-POWER that matters not the actual "number" of dollars that you have

Those working were not given raise and those who lost jobs or hours are making less.

Again, moneysupply was overinflated so now it's trying to claw backwards towards equilibrium so prices, wages, profits, etc will adjusted downwards so people need to be able to take up jobs at a lower levels & minimum wage laws prevent it & so does welfare - why would a person work a low-pay job if you're getting freebies worth pretty much the same amount or a little below!

Who is making more? It is also possible to have productivity growth without wage growth- that can happen if the benefits of this higher productivity are taken by the employers or share holders in the form of higher profits instead of being passed along to workers or to consumers in the form of lower prices.

Whoever market has determined to have provided better service in relation to its supply & demand makes more - at ANY given point in an economy
So if wages don't grow then it's because that's where they are supposed to remain as per their supply & demand
Moreover, productivity-growth in a environment where prices are falling means people are able to buy MORE for the same price than they did earlier

It is precisely this "transitional period" we(or Spain in our example but it applies to us as well) are trying to deal with- how do we get out of it? What will get companies to hire more people?

Getting rid of welfare would help as it would put people to work & actually ADD to total productivity of the economy or it needs to be "optimized" but I suppose that's highly unlikely so at least minimum wage laws need to be looked at, "regulations" on businesses need to be cut so that any new businesses can get started ASAP & existing businesses can continue to function by reducing "regulatory costs" & by possibly expanding their activities

Again, I'd urge you to go through this book - at least the chapters "How the Price System Works", "The Fuction of Profits" & "Minimum Wage Laws" - http://www.hacer.org/pdf/Hazlitt00.pdf

[Zippyjuan]

So your solution to getting employers to hire more people is to get rid of unemployment insurance? I agree that this would make more people want to go out and look for a job but how is that increasing the number of jobs available (the current problem)? There are not enough jobs to go around as it is.

Could getting rid of the Federal minimum wage help? According to statistics from the US Bureau of Labor Statistics, as of 2011 about three percent of the entire work force was paid the US minimum wage or less. Getting rid of or changing this would likely have only a very tiny (if any) impact on the overall unemployment in this country. http://www.bls.gov/cps/minwage2011.htm

Companies are mostly not hurting for cash to hire people with- they are sitting on about $1 trillion right now.
http://www.reuters.com/article/2012/...80T07420120130

U.S. corporations are sitting on record levels of cash - nearly $1 trillion for companies in the Standard & Poor's 500 index

You talk of supply and demand- the problem is the lack of demand for labor which is what needs to be addressed to reduce unemployment. Getting rid of welfare or unemployment insurance increases the supply of labor- which already has an excess- and does nothing to address the demand issue.

Again supply and demand- companies are not seeing enough demand for their goods and services to warrant them increasing their demand for labor- even if, as was suggested, you lower the cost of that labor via getting rid of minimum wage laws.

Prices are falling which mean people can buy stuff $ dollars than they earlier could; that's what matters, if you have a million dollars & you can't buy sh!t with it then what's the point so it's the PURCHASING-POWER that matters not the actual "number" of dollars that you have

Perhaps you can show me where you see prices falling and by how much? Inflation is low but we are not seeing deflation so to claim that we are better off as a total economic unit because falling prices have more than offset the incomes lost from job losses is ludicris. The overall economy has a lot less money to spend and significangly lower purchasing power than we had five years ago with lost wages and incomes while prices have not been going down to offset that. Purchasing power as a country is way down. Some are better off (those who kept jobs and got raises) but many are worse off in terms of purchasing power.

[JebSanderson]

i thought eduardo was banned

he is, i guess that spanish charm wasn't enough to keep him from getting banned

[The Gold Standard]

The solution for increasing demand is simple. Lower prices.