Saturday, June 23, 2007

Solving Unemployment and Underemployment

Solving Unemployment and Underemployment

Unemployment is the slavery of the 21st century--it is the great structural labor-market evil that we have to put an end to, just as slavery was legally ended in the United States and most other countries in the 19th century (yet it is still going on in many places, and must be eliminated along with "sweatshops" and un- and underemployment in the coming Revolution).

We cannot solve the problems of poverty, crime, drug or alcohol addiction, racism, educational failure, lack of affordable housing, urban blight, homelessness, or suicide, without FULL EMPLOYMENT--GOOD JOBS FOR ALL.

(1) Everyone has the right to work:
(2) for decent wages;

(3) for fair and equal wages!
(4) at any and every type of work that he or she desires;
(5) they have the right to flexibility of working-schedule;
(6) the right to whatever training and preparation they need in order to be able to succeed in their work;
(7) and the right to "full promotion" policies which will enable them to rise as high as they are willing and able to go.

To achieve these rights, we the people must demand that the government:
Create jobs for all un- and underemployed people; and these must be regular, permanent jobs, not make-work, low-paying temporary jobs of the sort that is merely intended to keep the person alive until he or she can land a private-sector job. This will require the (national or higher) government to either (a) subsidize jobs in the private sector or in the lower levels of government, or (b) organize, rebuild, or take over industries to create jobs in them. For example, we must rebuild American industries that have been destroyed by international competition.

We need to put an end to "free trade" and manufacture here everything we consume. The rebuilt industries must be regulated and subsidized so that they will produce goods of high quality and modest price, just as if they were subject to foreign competition, and so as to provide jobs for all who want to work in any industry.

This policy will cost at least $100 billion a year, maybe $200 billion or more, because we need to create jobs paying at least $10 per hour for at least 10 million people. It could be more expensive, because the people will need training, equipment, supplies, and supervision in addition to their wages; but it might be less expensive, because these do not all have to be full-time jobs, and because the private sector or lower levels of government might create millions of jobs with only a $5-10,000 subsidy from the federal government. Also, some of the costs of this policy overlap the costs of other programs, such as universal health care and affordable housing.


Establish a minimum wage of $12 per hour or high enough so that full-time work will pay half the average income (or, more precisely, 1/2 AMPERC-IW [see following paragraph]). This will require large subsidies, because not all private-sector employers can afford to pay such high wages without raising their prices, reducing hiring, or other harmful practices.

AMPERC-IW is an amount of money which is an average of the "typical" annual income and 1/3 the "typical" personal wealth, where by "typical" we mean the average of the mean and median.

The minimum wage should not be thought of as a wage level below which it is illegal to work, or illegal for an employer to pay, but instead as a pay level which is available to everyone who takes a regular job (these must be always available for all who want them). There may be many people working at various enjoyable or trainee jobs or charitable volunteer work, who can be paid less than the "minimum wage."

See Section 7 below on "full promotion": The minimum wage should rise with a person's age. This will require government subsidies, because it is not generally profitable for employers to raise their workers' wages just because they are aging.

(3) Fair and Equal Wages!

Why should a stockbroker make more than a soldier?

Why should an actor make more than a construction worker?

Why should a salesman make more than a teacher?

Wage level differences in our economy are total insanity and injustice; there is no rational basis for them. Certainly, there are reasons why some jobs pay more than others, but there is no merit to any of these differentials, it is wrong to respect or tolerate them, and we need to get rid of them by and large. The government must set wage levels in general, making them far more equal than they are now, and subsidize them where necessary, because fair and equal wage levels would be radically different from those which the market dishes out.

Why should a lawyer make more than a janitor?

Why should a plastic surgeon make more than a nurse who vaccinates poor children?

Why should a ballplayer make more than a farmworker?

Why should a lobbyist make more than a plumber?

Et cetera, et cetera, et cetera!!!

(4) Create new markets for all the desired types of work in which the private sector provides too few jobs.

-----Creative work-----

For example, many people would like to make movies or perform music. Under the current system, only a few of them are able to do so. The government must both pay people (often amateurs, yet they could also be professionals out of work) to work at movie-making and music, and hire people to watch and critique amateur movies and listen to and critique amateur musicians. The wages for these types of job will not be high, and the hours available will not be very many, but they will be enough to give everyone who wants it some experience of working in the field they desire. The wages paid and hours of work given to each person will depend on the quality of the movies and music they produce, or of the critiques they give.

Here is how this would work:

The DGs (discussion groups open to all--see blog on Direct Democracy) would determine a total budget amount for creative jobs--including writing and painting as well as film-making and music, etc. Let us suppose they allocate $40 billion a year. (This should be in addition to, or overlapping, billions that should be added to support creative arts/music etc. classes in the schools.) This can be broken down into four broad categories of expense: (1) salaries for the creative workers; (2) costs of the equipment and materials they would need to make their music, their film, paint their pictures, etc.; (3) salaries for people who will be paid to view their pictures, read their writings, listen to their music, etc., and give their responses thereto and critiques thereof; and (4) merit pay, to be distributed to and among the producers of the creative works in proportion to their works' merits.

Let us suppose that the DGs decide to allot $10 billion to each of these four functions. We then put out the call for applications, and let us suppose that 30 million people want to do this kind of creative work. Dividing, we find that this would give $1,000 to each aspirant (which they may choose to distribute as salary, expenses, or audience pay however they see fit), plus whatever they might win in "merit pay" for their project or performance.

How much money any given applicant can initially receive from the program will not necessarily be exactly the same as all the others, but could depend on their other income and wealth, how much money they are receiving from other government programs, and how good their work has been in the past.

In practice, many such creatives might want to join a team, especially if they are aspiring to make a movie or some other collective project. The program will help match up people who have similar-enough interests that they may want to collaborate on a project. Also, note that the amounts of money given out to each participant in this program are likely small enough so that the artists will want to use some of their own money to help pay for their supplies.

When their project is completed, or maybe even while it is in process, the artists can ask for audience, feedback and critiques, and may specify what genre and demographics they want--e.g., country-Western or sci-fi; age, sex, ethnicity; G, PG, R, or X, etc. This audience's ratings will determine how much if any merit pay the producers will win. And the producers will also have input into determining how much the critics will be paid for their work, although obviously this will also require some third party to mainly judge.

Of course, you know, very often the critics will be wrong about any particular piece of work; but still, this program will result in an explosion of cultural creativity in every field! Of course, it will also result in an enormous amount of mediocrity, but that is all just an essential cost of enabling the most people to fulfill their creative potential as well as of enabling the whole society to achieve its fullest creative potential.

If the person's creations become a commercial success, then much of the proceeds, royalties and profit should revert back to the government.

A related area where the government needs to create jobs is in going through creative work of the past. There is a huge treasure-trove of art, music, film, and literature from decades and centuries past, most of which lies unviewed, unheard, and forgotten in various archives. Billions of people could enjoy much of this material if it were just dug up, brought out, and people were paid to read, watch, listen to and appreciate it.

Some of the other fields in which many will want to work, that will require the government to restructure the labor markets for, are entrepeneurialism, sports, politics, and farming.

Since being an entrepeneur can be exciting, fun, stimulating, and educational, we should make this opportunity available to everyone. First, though, look at the math--if everyone wants to spend a tenth of his or her life being an entrepeneur, then on the average, their enterprise will only have 10 customers. It doesn't seem realistic for everyone to try to be the Ford or Microsoft of their generation, because there is not a large enough market for a billion giant companies. However, if, knowing this, still millions want to try, I wouldn't stop them, but the problem is, how much support should the government give them? There needs to be a branch of the government--"the Bureau of Invention, Research, Development, and Entrepeneurialism (BIRDE)", which, much like a vastly expanded Small Business Administration, will provide capital for startups of everything from mom-and-pop grocery stores to world-transforming hi-nano-tech visions. There might still be private venture-capitalists, too, although their number may dwindle because we must put tight limits on how much profit such speculation will be allowed to gain--I'm thinking like less than $10,000 a year or a quarter of the mean annual per capita income--which doesn't seem like enough to motivate most venture capitalists as we know them. However, there are probably some, who, like some of the bureaucrats of BIRDE, are sufficiently motivated by the chance of making a difference, innovating and improving the world, to allocate capital to promising enterprises.
It's important to realize that entrepeneurialism is not necessary or important to our economic progress, and so venture capitalism serves mainly only to increase inequality, which is why we should not encourage it. Indeed, perhaps the best way to give everyone the entrepeneurial thrill and education would be simply through games--from Monopoly to high-tech virtual simulations to role-playing games.

In sports, of course one thing is that the top stars will have to pay far higher taxes--as noted in the Taxing the Very Rich blog, the taxes on incomes of $10-20 million might reach 90%, and some of this money could be used to pay people to attend minor-league, high-school, and kids' league ballgames. It should not take too much money to do that, since these games can also be fun and provide spectacular plays and exhibitions of great heart and spirit, and it should also help that these are teams which the spectators are far more likely to be able to join some day.


In politics, the greatest expansion of opportunities will be in the DGs, the discussion groups open to all ("Direct Democracy"). Anyone who wants to study, discuss, and influence public policies on any issue can join one or more of these groups, which typically will meet for 3 hours a week and pay at least $10 per hour. Yet also, the city, county, state and national governments must be restructured in such a way as to vastly expand people's opportunities to participate as officials in representative democracy (see blog on Electoral Reform).


There is much to love about farming, yet this vocation, which in past centuries occupied over 90% of Americans, is now virtually closed to almost everyone except foreigners, whose pay and working conditions are deplorable. The dream of the prosperous small family farm needs to be made into a real option for all again (and obviously the market can't accomplish this, government subsidies and protection will be needed). It's not generally desirable as a full-time, whole-life occupation, but as an intermittent kind of work. One approach to this is in the community farms that have been set up in many cities that enable many mostly low-income families to enjoy growing things and improve their living standards. Many institutions such as for prisoners or disabled people also maintain small farms, for the work is very therapeutic, enjoyable and rewarding. Another approach is large residential lots in suburban to semi-rural areas; even with just a fifth of an acre or less, you can grow a surprisinly large quantity of fruits and vegetables. Dude ranches might be another example; and I would like to see suburbs structured so that a cluster of neighbors could share responsibility for a few cows, pigs, chickens, etc. Another, perhaps the most ideal format, would be for the government to buy up some small farms (or subdivide large ones) and allow people to come and work the land, care for the animals, etc., for a few days at a time (such as on their vacations from their regular jobs).

US citizens need to do all the work involved in feeding our country. We must stop relying on immigrants to feed us. In order to make all these farm jobs appealing to citizens, the government, using the new taxes on the very rich, must greatly raise the wage levels and improve the working conditions (although it is possible also that some food prices might be allowed to rise in order raise some of the money needed).

(And of course the agricultural industry must be completely overhauled anyhow in order to improve animal welfare, reduce pollution, etc.; some of these changes overlap some of the changes needed to open up farm jobs for all who want them.)

The right to flexible working-schedules. Everyone should be allowed to work whenever and for only as much as they want to. Usually, the costs of this freedom are not very great and can be paid for by the employee him- or herself. It is easiest where the employee simply wants to work fewer than average but still regularly scheduled hours, such as, say, 9 am to 2 pm Monday through Thursday. It should also not be too hard, usually, to arrange for a worker to take 1 to 5 or maybe even up to 10 extra weeks of vacation a year (perhaps merging with seasonal types of employment, such as summer interns or service workers at summer resorts, etc.). Probably, these types of schedules would be most easy to arrange in large companies and in types of work that many opeople can do. The employer should determine how much it costs them to allow the employee such flexibility, and charge them accordingly; the costs might be just like a few hundred or at most a few thousand dollars a year which the worker should be able to afford; although if the worker needs such such flexible scheduling due to health problems or other necessities, the government (or insurance) might pay part of the cost.
Our ideal is that everyone should be able to do all the kinds of work they want; probably many people would like to do a variety of jobs. Flexible work-schedules will be necessary to make this possible. For example, a person might want to be a policeman, a math teacher, a clothing salesman, and an artist. This should be made possible by allowing him to work just one or two days a week in each field.

-----Upper Limits?-----

Then there is the question of how much a person should be allowed to work at most. If the demand for a certain type of labor is finite, then a worker who works more than average may be taking work away from other people who want or need the work. If too many workers are too eager to take a particular type of job (or jobs in general), they may drive down the wages for that job (or for jobs in general--which is why labor unions have been essential to maintain decent wages in cases where the government fails to do this. Though I am advocating a type of system in which the government sets wages and makes them more equal, this type of market pressure cannot be ignored). So, while we should be open to allowing workers to work more than the standard average 40, 35, or 30 hours a week (this standard should be determined by plebiscite or public opinion polls), we should not make such permission automatic. If the work is highly-paid due to a shortage of willing or able workers, or a worker needs extra income to support unusually large numbers of dependents or pay off unusually large debts, for example, these could be reasons for allowing them to work extra hours.
Where wage levels are high, so that workers are not exploited, rates of overtime pay can be reduced as long as the overtime work is voluntary; so it will not be necessary to stick to the old formulas like time-and-a-half overtime/double-time on Sundays, etc.


Training (and job prep, etc.)

Under capitalism, the training needed for high-paying jobs, such as doctors, is very expensive--which helps to keep the number of people who can do the jobs low, which helps them to maintain and increase the amount their job overpays, which helps to keep the training expensive--a vicious spiral. We have to get out of this spiral by breaking this kind of semi-monopoly by the government providing the needed training to large numbers of people--which will help pull down the excessive wages, and will also thereby make the training less expensive (because the training has to be done by people who have to be paid as much as practitioners).

Once the professions and other overpaid types of work are broken like this, the cost of entry-level job-training should decline to around $10,000 or the cost of a year of vocational ed or community college just beyond high school; it would add only 10% or so to the total general educational costs for each individual.

Some people may need and should be given (if they cannot afford it themselves) additional assistance of various kinds in order to enable them to succed in the types of jobs they want--child care, counseling, medical therapy, etc.


Full Promotion.

Vertical mobility is essential for attaining equality. The ideal is that everyone should be able to start at the bottom and rise all the way to the top. It is not generally well-understood what keeps people from rising--it is the too-long terms of tenure at the top. It is not people's lack of ability or ambition that keeps them from getting to the top, it is the fact that the top executives hold on to their jobs for too long. The key to enabling everyone to rise as far as their ability and ambition warrant is speeding up the turnover at the top. If a corporation has 100,000 employees, all of whom are willing and able (or could be trained/educated/mentored) to do top-management type work, and they have a 50-year career, do the math: They should each get one hour of being the CEO. Now, let us say that everyone should be able to rise not merely to the top of this medium-large company, but to become the President of the World. If there are 7 billion people and each lives 3 billion seconds (about 94 years), then each should get 3/7 of a second at the top.

The fact that a CEO or President of the World could not actually accomplish any leadership in such a short period of time could be a good reason for re-lengthening the top terms of office, thereby reducing the number of people actually given such management duties, but it is NOT a reason for denying billions of equally-deserving people the enjoyment of the perks--the high income and fame, and even at least some of the power--that the top positions entail. It is easy to arrange for everyone to receive $50,000 an hour (like a $100-million executive) at the climax of their career, and to get a crown placed on their head and be on TV for 5 minutes before an audience of hundreds of thousands and give a little speech, or song and dance, etc.--about whatever interests them--like the old TV show, "Queen For a Day".

Even if all people were capable of being educated, trained, and mentored to the extent of becoming capable of performing top-executive or leadership duties, probably many of them could be persuaded to settle for less responsible positions--even if perhaps by actually offering them a little extra pay--so as to reduce the number of top officeholders to few enough--that is, with terms long enough--to actually provide the leadership that the corporation or the world needs. However, note also, that it is vital to divide up the duties of top management in such a way as to allow large, or even enormous, numbers of people to share in the top leadership functions--in case perhaps millions to billions of people want to participate in the duties, not just the perks, of the top. One obvious way of doing this is to divide the power into many different functions, like the ministers of a cabinet, who head the Department of Justice, Department of State, Dep't of Defense, etc. Another way is to divide the power into many different geographical areas, and another is to rule by committees, where the decision-making can be shared by huge numbers of people.

Meritocracy. Even though everyone should be able to reach the highest positions, the exact height, how long they can stay at the top, and how rapidly they can advance in their career, should all depend on how well they perform their jobs. For example, although three workers, one excellent, one average, and one lackadaisical slacker, might each get $50,000 an the hour at the height of their careers, they might be given 2, 1, and 1/2 hour, respectively, at this rate; in their highest year, they might be paid $3 million, $500,000, and $100,000, respectively; and they might each start out at a salary of $20,000 a year at age 20, but they might get promoted to the $50,000 level by age 30, 40, or 50, respectively. The obvious purpose of this sort of differentiation is to motivate employees to do their best and to obtain the best possible performance and service. In other words, the differences in pay should not be larger than whatever is needed to prod each worker to do their best. It is possible that that is far less than the differences in pay levels that prevail in today's labor market; some experimentation will be needed to determine this.

The result of all this is to create a system that is both egalitarian and meritocratic, where equality is far higher than today, with everyone enjoying at least some years of affluence and prosperity in their lives due to the greatly increased vertical mobility. With the hierarchy structured so as to keep everyone on the lists for promotions, nobody should get left out just because they fail to receive adequate mentoring or do enough schmoozing and kowtowing to the boss.

Each person's rate of pay should depend primarily on their age and performance; secondarily on their seniority within the company and the industry. Their ability, as measured by tests and interviews, can also be a factor. People must be able to take years off from their career, to raise children, travel, go back to college, work on writing a novel or screenplay, or whatever, without losing much if anything in their career advancement. With the rapid turnover at the top continuously opening up millions of advancement opportunities, you should have nothing to fear from taking time off.

The Average Career Salary Schedule

Here is the salary a person could be paid each year of a 50-year career, say from age 25 to age 75, at some time in the future when the average life span reaches 100 years and most people go to school or college until age 25 and enjoy 25 years of retirement after reaching 75. (Obviously since at present the mean life expectancy is well under 100 years, you will want to compress this schedule timewise accordingly; and in individual cases where perhaps a worker develops health problems and has shortened life expectancy, their ascent up the promotional ladder can be accelerated.)

The figures are given as a percentage of "AMPERC-IW" (see section 2 above), which is usually approximately the same as the mean annual per capita income--which is around $40,000 a year in the United States at present. This 50-year schedule assumes that the worker begins his or her career earning the minimum wage, which should be $10/hour and is indexed to stay at a level such that a full-time worker makes 1/2 (50%) of the mean annual per capita income (which would hopefully be rising). At the climax of their career, their income in their 50th year, according to this schedule, would reach 400--that is, 400% of the mean, or about $160,000, if the mean income (or, more precisely, AMPERC-IW) is still $40,000 at that time. Over the 50-year period, their average income would be 126.5--which implies that during their 50 non-working years their average income would be 73.5--so that over their whole life span, their average income would be 100% of the mean. Of course, if you are a really good worker, you can make quite a lot more than this, while if you are not so good, you will make less; but still, even if someone only makes half the average at each age, they will have a happy ending, making 200%, or $80,000 a year, at the end. And of course, you want to bear in mind that these terms "good worker" or "not so good" are actually just the bosses' opinion, which may well be wrong, in fact often is wrong, even if they are not biased by racism, sexism, ageism, nepotism, or cronyism, or just plain old human inability to judge others accurately. There must always be some ways for workers to get justice if they are misjudged by their bosses, whether through union grievance or civil service procedures (which should cover all workers equally, even if they are not in unions or civil service; but also these procedures must be made more reasonable, rather than, as they are often doing now, making it impossible to fire or demote anyone no matter how poor their work is), or just quitting your job and finding another, which should always be easy to do in the full-employment economy. But even if a worker finds that he or she cannot get a fair evaluation of their work, they are still protected ultimately by a generous welfare-state, which will provide high levels of welfare benefits for the unemployed.

Age Range---Year 1--Yr 2--Yr 3---Yr 4---Yr 5












Since people's compensation under this system will depart widely from what the employer would prefer to pay them, wages in general must be subsidized (or, in some cases, curtailed) by the government.

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