Saturday, April 16, 2011

What I would do to lower the unemployment rate

Below is what I wrote for an economics assignment. The topic was what I would do to lower the unemployment rate, so while it is sort of about that, I digressed a little because I wanted to make my contribution unique to the class. What was funny was that once the professor handed my article back he said: "I like it, but was it about lowering the unemployment rate, or saving western civilization?" And immediately everyone turned their heads to look at me (I sit at the back of the room). Epic. You really had to be their to appreciate it.

As it turned out, I talked to my professor after the class about it, and he expressed his agreement, very much so actually. So it was refreshing. Anyway here is the paragraph:

The two things that I would do to lower the unemployment rate are as follows. The first one is obvious: Cut taxes in half, for everyone, including corporations and higher-income individuals. And cut the Government work force correspondingly, except over a decade to allow the workers time to integrate into the private sector, which will no doubt grow due to the reduced taxes. This will re-allocate labor to more productive uses that are consumer-approved. The second thing that I would do is to provide significant incentive for women to leave the workforce to raise their kids at home and remove the disincentives for them to leave their children to the Nanny state, removing institutions such as welfare and public day care. This may seem harsh to some, as well has willfully controversial, so it needs elaboration. Real wages have declined since 1973 because of the rapid influx of women into the workforce. This increased the supply of labor without creating sufficient demand to meet it. This rapid influx of workers didn’t actually increase total output as much as would be expected. This also, in part, is why the American economy has transformed from an industrial manufacturing economy into a paper-pushing service driven economy, as it is the front desk jobs that woman find more psychologically rewarding and men find unsatisfying. So layers and layers of unproductive bureaucracy have accommodated woman’s economic empowerment. Also, employment is not necessarily positive-sum; the inflow of female labor has resulted in the unemployment and underemployment of many males. Granted, this is more of a pragmatic solution to save Western Civilization than a policy to really improve the economy, as countries where women are economically empowered tend to have higher GDP’s. But the pendulum will swing back, viciously. And there is one word to describe what all matriarchies eventually turn into: “grass huts.”*

*On the other hand, the grass hut effect may actually lower unemployment, since 3rd world countries are notorious for combining full employment with astonishingly low productivity levels.

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