can reduce the disincentives to work that many of our social programs contain; and it can vigorously pursue cost containment in its regulatory functions. These and other policies that are discussed in this book can reduce
the amount of unemployment needed to control inflation.
The benefits of a low-unemployment economy will flow not just to
previously unemployed workers but to all workers. Current thinking on
unemployment focuses on the benefits that may flow to unemployed
workers who are removed from the unemployment rolls through retraining or other programs. This approach implicitly accepts a natural unemployment rate of 6-7 percent. Achieving a low-unemployment economy,
a tight labor market, will benefit, first and foremost, the marginal workers who will get and hold on to decent jobs. But the benefits do not stop
there. All workers will benefit as a low-unemployment economy increases competitive pressures on employers to hire and hold on to good
Harry Maurer, Not Working: An Oral History of the Unemployed ( New
York: Holt, Rinehart & Winston, 1979). Reprinted by permission of Henry Holt
and Co., Inc.
Graham Dawson, Inflation and Unemployment: Causes, Consequences and
Cures (Brookfield, VA: Edward Elgar, 1992), Chapter 7; the International
Monetary Fund (IMF) has also pointed out that "the long-run economic cost,
measured as a percent of GDP, is of the same order of magnitude as the unemployment rate itself," in World Economic Outlook ( Washington, DC: IMF, May 1994), p. 35.
Barres S. Greiff, and
Duane Q. Hagen, The Psychological Impact
of Job Loss ( Washington, DC: American Psychiatric Press, 1990), p. 38.
Questia, a part of Gale, Cengage Learning. www.questia.com
Book title: Reducing Unemployment:A Case for Government Deregulation.
Contributors: Garry K. Ottosen - Author, Douglas N. Thompson - Author.
Publisher: Praeger Publishers.
Place of publication: Westport, CT.
Publication year: 1996.
Page number: 10.
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