A FAULTY DIAGNOSIS OF UNEMPLOYMENT
In March 1994 a conference involving the finance, labor, commerce, and economics ministers of the G-7 nations ( Britain, Canada, France, Germany, Italy, Japan, and the United States) was held at President Clinton's request in Detroit, Michigan. The conference's purpose was to give the ministers a chance to discuss their countries' serious unemployment problems so that they might better understand the causes and cures of high unemployment. The conference became known as the jobs summit.
No doubt exists that unemployment has become more of a problem among the G-7 nations over the last two or three decades. During the period from 1965 to 1975, the average unemployment rate among the G- 7 nations was only 3.4 percent. During the period from 1980 to 1990, the average unemployment rate for the G-7 nations was 7.5 percent. Something has obviously gone wrong. VVhat did the jobs summit conclude?
The skimpy published reports available after the jobs summit indicate that the ministers briefly discussed many items, including the role of the private sector in creating jobs, making employment more attractive than welfare, sound macroeconomic policies, the importance of small and medium-sized companies, international trade, and the importance of productivity gains that accompany technological advances. But, according to U.S. Treasury Secretary Lloyd Bentsen, "the need to improve the education, training, and skills of our work forces was central" to the discussions of the ministers at the jobs summit. 1 This fits with the hype that preceded the conference 2 and with President Clinton's March 14, 1994, remarks to open the conference. 3 Put simply, ministers at the jobs summit seem to have concluded that most of the increase in the NAIRU within the G-7