Friday, January 20, 2012

Is unemployment an unnatural phenomenon caused by harmful legislation and regulation?

Yes. For example, one of the reasons Detroit went belly up, is because of the unions, demanding that the workers receive inflated salaries. It simply wasn't profitable for manufacturing to continue, so the companies moved elsewhere. Also, there is massive offshoring of American jobs going on. The companies do not like the hefty taxes or the cost of American labor and issues with unions.



Another reason, for unemployment is that America is a country of incoming immigrants. Most of the immigrants, who come here, take the jobs, not create them. Now, in America, you can find a job, much easier, by catering to the immigrant and learn Spanish, than you can if you have a college degree.Is unemployment an unnatural phenomenon caused by harmful legislation and regulation?No. Most economist agree that there is a certain level of unemployment that is actually healthy for an economy - "Frictional unemployment" where people are going out and getting better jobs, moving, taking time off to get married, etc.

This unemployment rate is something between 3-6%. Higher than that, and you can argue about why people cannot find work, but some of that may not be related purely to government intervention and harmful policies - it could be that a particular region or country is just not competitive at the moment and people and business need to re-train, re-tool and re-invest.

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