Reducing Unemployment: A Case for Government Deregulation

Reducing Unemployment: A Case for Government Deregulation

Reducing Unemployment: A Case for Government Deregulation

Reducing Unemployment: A Case for Government Deregulation

Synopsis

Unemployment costs the United States billions of dollars per year in lost output and social problems. The United States cannot afford to ignore unemployment in its pursuit of stable prices. The authors take a careful look at the nonaccelerating inflation rate of unemployment (NAIRU) in an effort to understand how we can achieve a low-unemployment economy without serious inflation. The conclusion is that we can achieve such an economy by pursuing government deregulation.

Excerpt

Since at least the mid-1960s, the average level of unemployment has been rising in the United States. Many policymakers seem to have accepted the increase in the so-called natural rate of unemployment without much thought as to its extremely high costs, both in terms of lost production and in human terms, and without much thought as to why it has been rising. Given the major unemployment problems that Europe is now experiencing, it is clear that it is past time for the United States to consider these important issues. This book focuses on the costs associated with high unemployment rates and, more important, on a systematic analysis of the fundamental causes of unemployment.

THE PERSONAL SIDE OF UNEMPLOYMENT

All too often numbers about unemployment are bandied about but the personal side of unemployment is forgotten. As unemployment is discussed in this book, let us not forget the personal side. Hence, before we begin citing numbers, let us look at a personal account of one man's unemployment experience. At the time, the late 1970s, he was 35 years old and had been fired from his job as a welder in what appears to have been an effort by the company to cut costs.

When I first applied, the unemployment office turned me down. So I had to get a lawyer, go to hearings, subpoena witnesses. It was April when I got fired, and it wasn't until the next December that the unemployment office finally decided in my favor, that I had been fired without just cause. So I didn't get any unemployment all that time. Only welfare.

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