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Towards Zero Unemployment

A common story that lottery winners say is “I can now secure the future for my children”. Upon the 20th anniversary of the fall of the Berlin Wall a woman who had lived in East Germany commented that "for all it's problems, in East Germany you didn't have to worry about the future for your children, because everyone was guaranteed a job". Now this system, communism, that we are all supposed to hate and regard as inferior, gave the same material security to everyone that only lottery winners have in our free-market economy. I'm sure it didn't mean everyone had their dream job, and I'm sure it wasn't perfect, but it was a country where you had to worry about what you said, but never that you wouldn't be able to draw down a weekly wage. It's as though, under the free market, people have forgotten about the suffering that unemployment causes. This is partly, if not largely, due to the fact that the majority of people, even during a recession, ARE in work, that it is easy to blame people themselves for being unemployed, but also that the political class today is increasingly drawn from the public schools, from wealthy backgrounds, and who go straight into politics after leaving Oxbridge and have little appreciation of the mean cares of everyday life.

I am not a communist as I believe that property ownership results in the legal system and from that human rights, and I also think people should have the freedom to buy and sell as they wish. I have always believed it must be possible to have a capitalist society that contains the one undisputed advantage of communism - zero unemployment.

The free market will never provide enough jobs for everyone. I believe there is a fundamental reason for this that has alluded economists. When applying for a job, the first and only thing the employer will ask or care about is,

“Have you got any experience?"

The question is: how can you get a job in the first place if you need to have done the job before to have the requisite experience? How can you get the experience without having had a similar job? This situation makes it extremely difficult – impossible, in fact – to change career and move from a job in a declining industry to one in a new industry.

A scheme should be introduced to enable this 'frictional' unemployment, as it is known, to be reduced as much as possible. Government Intervention is probably the only way to achieve this, at least until there is a cultural shift in the attitude towards employment by private enterprise. Hopefully a successful government initiative would produce a shift in the way that the skills of people are perceived and further government intervention would no longer be required. I believe that the government should give financial assistance to businesses to take people on who have obtained a qualification, demonstrated a commitment and aptitude toward a line of work, but have no experience, and give them that experience. This would, in time, reduce structural employment, but also create more skilled workers thus helping businesses to grow into new areas a lot quicker that at present. Lower wages among the semi-skilled and skilled jobs might be the result, but only in proportion to the numbers of new entrants into the marketplace. Such as scheme would need to be designed to avoid disadvantaging existing skilled workers, so would have to be at a level that only covers the costs of training and giving experience and doesn't act as an incentive to shun existing workers.

This would help both individuals AND business. Politicians on the Right think the way to be pro-business is by being anti-people, whereas social-democrats recognise that you can be both pro-business AND pro-people; in fact, the two work together (the Investors In People award is based on the evidence that businesses treating their workforce well tend to be more successful).

I believe overcoming The Experience Trap might cut unemployment by half. For the rest I believe that the government should invest in infrastructure and housing to create jobs, and the remaining unemployed to be provided with 35 hours a week at the minimum wage picking litter, digging flower beds (to save having to put ugly advertising signs next to them), cleaning graffiti, maintaining parks, helping elderly people with chores and shopping (subject to criminal records checks), clearing bracken in the countryside, even repairing dry-stone walls. All this would cost money, but the dole is currently equivalent to about 35 hours a week at the minimum wage when housing subsidy and not having to pay council tax are taken into account. There would be an additional cost for the administration of these schemes but when the human cost of unemployment is so great then any civilised society should be prepared to pay for such employment. The cost might be a few billion a year which is not significant compared to wider government spending when the benefits of such a scheme would be so far-reaching.

I believe that tackling The Experience Trap to help people back to work combined with the provision of basic work for everyone could result in a prosperous capitalist society combined with the one advantage of a planned economy - zero unemployment.