Why is unemployment so high? Simply put it's because corporations and businesses can produce a surfeit of consumer goods without the need for additional human labor. Since 125,000 new faces enter the work force every month, there should be new jobs created for these people if they are to make a living since most people, but not all, make their living through work. Some, however, the rentier class, make their living from stocks, rent, dividends and interest, but not very many. But the American and even the world - since we're in a global economy - production machine doesn't need additional workers; it needs more consumers. Everything can be produced with a diminishing number of workers. Why? Consider automation, robotization, computerization. In short today machines do most of the work. You only have to watch one of those shows on the Science Channel to appreciate this: "How Stuff is Made." You see that most industrial processes have been completely automated.
Back in the old days production was very labor intensive. Stuff was made by hand. Machines were very primitive or non-existent depending how far you go back. The land was tilled and crops planted by hand whereas today huge tractors and automated farm machinery mean that one man can do the work that was done by hundreds a hundred years ago. What little labor is needed in today's world can easily be outsourced to wherever labor is cheapest. We have gone from an economy which was very labor intensive, one that required a lot of hands for the production of goods, to one that requires very little labor to keep the machines and robots humming. And the process of mechanizing and automating production processes continues. Robots are getting ever smarter.
So where does that leave the average person who is trying to make a living? Not in a very good position with the current economic model. It essentially leaves him or her in the position of a serf begging for a job and competing with thousands of others for work. The serfs were even better off because at least their labor was needed. Today's industrial reserve army is not really needed by the capitalists and corporatists who control the economy. That means two things: 1) the value of labor is depreciated because so much of it is available and unneeded and 2) there is a growing percentage of the population that must either be sustained by some form of welfare or unemployment compensation or cast to the wolves to beg, borrow and steal.
What is needed is a new economic paradigm which recognizes that very little labor is needed and machines can do most of the work. What would that new economic model look like? There would need to be a much larger leisure class than now exists. The wealthy are very few in number as a percentage of the population as a whole. They don't have to work because they have a steady stream of income which represents a return on their assets. Ownership of real estate produces a return in the form of rent. Ownership of stock produces a return in the form of dividends. Interest income is at an all time low because interest rates are so low, but when they go up again, people will be able to make a living if they have enough money in money market, CD and savings accounts. Unfortunately the distribution of wealth is way out of whack. Those in a position of being able to make a living off of so-called unearned income are very few. Those in the position that their only recourse is to make a living from their labor are the vast majority. What is needed is to turn this situation around so that the vast majority can make a living off of return on assets and only a small minority, whose labor is actually necessary for the functioning of society, will be necessary to make money from work. Or the work could be spread around so that everyone might work a few hours a week and make their living mainly on the return on assets or acquired wealth and a small portion of their living off their labor.
This is effectively what advanced societies (not including the US) have done. A large portion of the wealth of the society is held publicly. This does not preclude the private acquisition of wealth, but insures that the distribution of wealth is not as skewed as it is in the US. This makes it possible for the less fortunate, the less able and the unemployed to make a living as a return on public wealth. The fortunate do not need public assistance, but the unfortunate do. Public wealth can provide for free health care, free education and free unemployment compensation among other things. By taxing the rich, money is redistributed to the poor so that the processes of production and consumption can continue. Or public wealth in the form of natural resources can be sold and the profits divided evenly among the people. Many countries use their oil assets as a form of public wealth. Otherwise, all the money ends up in the hands of the wealthy and production stops because the vast majority of people have no money to consume. When money is redistributed or recycled from rich to poor, the production and consumption processes can hum merrily along. So taking money from the rich in the form of taxation and redistributing it to the poor is very important for the healthy functioning of society especially in advanced societies where most of the work is done by robots and human labor is increasingly unnecessary.
So all this banter about the rich being job creators is a bunch of hooey. The rich are not job creators; they are robot acquirerers and job destroyers. They make capital investments of a nonhuman variety because they are more efficient in the production process than are humans. For one thing machines can whiz and hum 24 hours a day. Humans need their rest. Safety standards for machines are more lax than they are for humans. Maintenance is simpler. Machines don't get sick or disgruntled. All in all if a capitalist can replace a human with a machine, he will do it. Capital investment in machines is more desirable than an investment in human capital.
So what does that say about the value of education? Essentially a college education is of diminishing value. Sure some will chase the fantasy of more and more education in order to better compete for fewer and fewer jobs. In the long run the student loan debt required to obtain a credentialization in some field will not be worth it. Since more and more people will be left to their own devices instead of hired, the sensible thing is to prepare for a life of self-employment. Instead of preparing to participate in the global economy with its attendant risks of outsourcing and downsizing, prepare to participate in the local economy in a job from which you cannot be fired and which cannot be outsourced. A college education prepares one mainly to be a servant of a corporation. It shows that one was docile and compliant enough to follow years and years of instruction, sit in classrooms and take tests successfully. It shows the employer that a potential hiree has the requisite qualities of docility and compliability to make a good employee, one who won't make waves or criticize the corporation, one who will adopt the ethos and become enculturated in corporate values, one who, in other words, will sell his soul to the corporation.
Another way to fight back against the job destroyers (not creators) is to form cooperative work enterprises such as the Mondragon corporation which is wholly employee owned. The employee, in addition to acquiring a paycheck, acquires a share of the profits as well. So the worker becomes an owner and makes part of his living from a return on assets just like the wealthy do. Wealth, therefore, is more widely distributed and can be further distributed by reducing the work week, hiring more employees and distributing wealth even more widely.
In an age in which there is a diminishing need for human labor and most work in the production process is done increasingly by machines, the rational thing to do is to distribute the necessary work more widely (i.e. reduce unemployment), reduce the work week and create a situation where each individual makes a portion of their living off of acquired public wealth. In Norway, for instance, the old age pension system is entirely funded by profits from a publicly owned asset: oil. These profits then are invested conservatively so they will be available to future generations.
