Maximizing employment: the ONLY policy proposal for full success

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Today is Labor Day, a holiday celebrating workers' organized efforts to achieve living wages, safe and dignified working conditions, and benefits (economists translate this into wages). I want to consider a more fundamental goal: achieving employment in order to have the above.

One of the key statistics to determine how well government policy is supportive of labor is unemployment. A government role in employment may be distasteful for some of you, but give me a moment to explain government's rightful role in supporting full employment. The failure of unemployment often translate into even more distasteful social costs: loss of potential economic productivity, crime, public health costs, and the immeasurable feeling you get seeing beggars in arguably the most successful economic environment in world history.

The official unemployment statistic for the US is now at 9.7%, or 14.9 million American adults seeking employment who have not found even a part-time job of one hour a week. Economist John Williams of Shadow Government Statistics explains in a 5-minute video below that this is the government's rosiest figure, called U-3. The more realistic figure is to include part-time workers who want full-time work and all discouraged workers (U-6), but calculated in the same way before the Clinton Administration stopped counting millions of unemployed workers in the official statistics in 1994. If you don't trust the government to self-report, William's figure of 20% unemployment is more accurate, or roughly 30 million American adults.

One of the goals of the Federal Reserve is to maximize employment. The maximum employment is all adults seeking a job having a job. Let's consider policy to achieve full-employment with the assumption that we really do honor labor and want every American adult seeking work to be successful in both the short-term and long-term. When the free-market economy cannot achieve an economic goal, economists call that a market failure. Free-markets will never achieve the economic goal of full employment; they never have. Given that obvious history, the intelligent policy response is to have a back-up plan, an employer of last resort. It's obvious that when your primary strategy has never ahcieved a goal that you MUST develop a back-up plan, yes?

But who should be the employer of last resort for what jobs, and who will pay wages for unemployed workers? Simple: the collective expression of American organization to address community needs, otherwise known as government. If the market cannot absorb willing workers, the government is the only alternative IF we're serious about achieving the goal of full employment. What type of jobs? Easy: public service. I wrote a few days ago that the Los Angeles fires would have been prevented if the full-employment aspect of monetary reform was policy. Government at some level (details would have to be best-determined in Hearings) would be the employer of last resort to have people do cost-positive work like clearing fire-hazardous brush. How to pay? Elegantly beautiful: monetary reform.

Monetary reform transforms our Robber Baron monetary system written by the banksters for the banksters where banks create money that the government then borrows at interest into government-created money for the direct payment of public goods and services. The benefits to our nation are a trillion dollars every year. Put on your Economics 101 hat for a moment: as long as the economic productivity or government work is greater than the cost of wages, then price levels decrease. That is, as long as we're intelligent about cost-positive projects, a policy of full employment has our money worth more rather than less from inflation.

In history, government have successfully employed workers for rapid economic improvement. Meiji Japan rapidly upgraded infrastructure to Western standards. Napoleon took a nation ravaged by ten years of revolution that killed or drove-off their highest economic producers and made France the strongest country in Europe. Mind you, economic productivity should be focused on constructive projects rather than military domination of Europe. But it was Napoleon who took the unemployed, created currency, and paid them to beautify Paris that gives its reputation as one of the world's most romantic cities today. Germany was an economic tragic-comedy in the 1920s and without government-held gold. They resourcefully created money for wages and put unemployed Germans to work on public projects. They, too, became the dominant economy in the world (caveat above standing).

American could use an economic breakthrough. Imagine the work that could be done on roads, schools, investment in alternative energy, or just the joy of beautification projects. I don't know about you, but I do amateur cost-benefit analyses for beautification of city and state land often. For example, it would take SO little money for our freeways to be environmental gardens if we were willing to pay the team to produce the result.

Almost all people want to be productive. On a related subject I touched on above: for American adults who reject employment for whatever reason and have a homeless life, every cost-benefit analysis in US history shows its cheaper to provide dignified and simple housing, healthy food, minimal health care (usually weekly nurse visits to the facility), and job training than to bear the social costs of homelessness. I explain in detail here. The studies also show that given the opportunity, almost all people choose productive work and independence rather than sheltered assistance.

After economist John Williams explaining unemployment statistics, I have a 4-minute fictionalize consideration of full-employment policy from the movie, Dave.