10
JAN
2012

Emergency Plan for Unemployment

Proper treatment of unemployment can become a springboard for personal and national advancement

Key Points

  • In the modern society, work has become the center of our lives. Work-related parameters determine one’s social status.
  • The economic crisis causes high unemployment in Europe and in the U.S., but is expected to rise even more. The statistics aren’t telling the truth; unemployment is higher than reported.
  • The necessary transition from a competitive and overactive economy into a balanced and functional one will be followed by a dramatic contraction in the sectors of services, retail selling, and industry. Hundreds of millions are expected to be ejected from the job market. Inflation rates will rise to the high double-digits.
  • In a balanced economy, 20% of the population can provide for the sustenance of the whole of humanity.
  • A rising unemployment is a social and economical time-bomb threatening the stability of governments and the entire international system.
  • As part of an emergency national mechanism, an education system must be built, into which the unemployed will be admitted. Studying in that system will count as a job, for which the government will grant a sustenance scholarship according to the personal needs of each student on provision of continuing to study in the education system.
  • The contents to be taught at the education system will include personal finance, necessary life skills in the new reality, the laws of the global-integral world and its effect on our lives and on the entire society and economy, and the advantages of mutual guarantee as a way of life.
  • The program will “defuse” the time-bomb and will allow governments to carry out the necessary transition into mutual guarantee and a balanced and sustainable economy.

Is Work Our Lives?

In the last 200 years, work has become more than a way to provide for sustenance, for raising children, and for saving for old age. A person’s job, position, and income have become key elements in the self-esteem of many of us, and in the way we are perceived by society. Often, work is also a social framework, an indication of our personal success, and the seminal value by which we are brought up from an early age. One of the most common questions a child is asked is, “What do you want to be when you grow up?” Invariably, their answer has to do with an occupation. But why do children limit their answers to occupational aspirations? Is working at this or that job, or having this or that profession, the height of human aspirations?

It seems like it is, today. And yet it wasn’t always so. Until not long ago, work was just a way to make a living and provide for one’s needs. The industrial revolution has made work the center point of our lives, and the process continuously accelerated as capitalism expanded and evolved. Along with the significance of work in our lives, work-related stress has become a prevalent phenomenon. It seems to be a cycle in which we earn more, but we are also more emotionally tied to our jobs, which we perceive as key to our self-esteem.

If we lose our job, we try to do everything we can to get quickly back into the job market, into the cycle. Why? It seems to be more than just about money. It seems like the real issues is that unemployment is tantamount to being a failure.

The significance of our work in our self-esteem and in the appreciation that society and family have for us are making unemployment a destructive phenomenon. When one becomes unemployed, one loses not only one’s job, but one’s self-esteem and social status.

The Economic Crisis’ Impact on the Job Market

One of the most significant damages of the global crisis is the rise in unemployment. The crisis manifests in low demands, decline in private consumption, closing of factories, and cuts by employers. All of those bear an immediate effect on the job market. Not only is the number of unemployed rising, but there is also a decline in the number of jobs available in the market. Put differently, once laid off, it is harder to find a new job and the unemployment period is prolonged. Some of the unemployed are completely ejected from the job market and stop looking for a job altogether.

On September 26, 2011, the heads of the Organization for Economic Cooperation and Development (OECD) and the International Labor Organization (ILO) published a joint statement in which they expressed their concern over the seriousness of the jobs crisis, where “200 million people are out of work worldwide.”[1] They also warned that “The job shortfall [in Europe] may increase [from 20 million] to even 40 million by the end of 2012.”

In the U.S., the unemployment rate has only recently declined below the 9% threshold but is still very high.[2] In Europe, and especially among the PIIGS countries (Portugal, Italy, Ireland, Greece and Spain), unemployment is at its peak and in the double digits, with the exception of Italy.

Unemployment is at its worst among the young. According to an ILO report titled, World of Work Report 2011: Making Markets Work for Jobs, “Among countries with recently available data, more than one in five youth, i.e. 20 per cent, were unemployed as of the first quarter of 2011.”[3] According to unemployment statistics from Eurostat, youth unemployment is rising dangerously high with rates of 21.4% in the euro area, the highest being in Spain (48.9%) and in Greece (45.1%).[4]

According to the report just mentioned, the state of the job market poses an imminent risk to the political and social stability of many countries around the world. “As the recovery derails, social discontent is now becoming more widespread… In 40 per cent of the 119 countries for which estimates could be performed, the risk of social unrest has increased significantly since 2010. Similarly, 58 per cent of countries show an increase in the percentage of people who report a worsening of standards of living. And confidence in the ability of national governments to address the situation has weakened in half the countries.

“The Report shows that the trends in social discontent are associated with both the employment developments and perceptions that the burden of the crisis is shared unevenly. Social discontent has increased in advanced economies, Middle-East and North Africa.”[5]

Indeed, we have already seen the impact of economic crises on societies and governments in countries such as Egypt, Yemen, Libya, or—though to a lesser extent—in Spain and Italy, and even in the U.S. with the Occupy movement, or Israel with the protests of the summer of 2011.

In addition to the growing tension in many countries, the traditional fiscal and monetary solutions to the crises in general, and to the unemployment in particular, seem ineffective as the national debt of many countries has bloated to perilous proportions. This threatens the solvency of many countries, as well as hinders governments’ abilities to cope with social problems such as unemployment. In such a state, unemployment is expected to rise much higher, distress to worsen, and social unrest to break out at intensities that may well pose an imminent threat to the stability of governments and the entire international system.

Is the Growth of Unemployment Reversible?

Among the plights of the economic crisis is the contraction of production, both in the industry, and in the overblown services sector. This occurs due to contraction in the market, in foreign trade, private consumption, and in the global stock markets. Job cuts are expected not only in the private sector, but also in the public sector, primarily because governments are driven into implementing emergency plans, part of which means cutting expenses and diminishing the workforce among civil servants.

The current global crisis is nothing like traditional cycles of economic and financial activity, which has always been characterized by crises and recoveries. The continued advancement of humanity toward a single, global system, toward a network of increasingly tighter connections in economy and in society, and toward complete interdependence among us is an unavoidable process of change. If we can adjust our relations, including our economy and society, to the changes happening in the global-integral world, we will be able to obtain equilibrium with the laws of the new system. That new balance has many advantages to us, yet we currently perceive some of them as negative, even disastrous. Among the most conspicuous of those trends that we perceive as negative is the permanent decline in employment.

The decline in consumption is not transient, nor is the contraction in the industrial activity and output. They are both obligatory and reflect return to reason after an age of over-consumption and its many harms. The failing current global economy—with all its competitiveness, egoism, and intrigues—will step down from the stage of history and return to its natural size—a balanced economy. The contraction of industry, services, trade, and the public sector are also mandatory.

All of the economic systems, which have gone out of control over the last 30 years, the “era” of the rule of extreme neo-liberalism, will return to their natural sizes, the size required to provide for the needs of the human race on reasonable, equal, just, and harmonious levels.

In the 2011 Lindau Nobel Laureate Meeting in Economic Sciences, Dr. Joseph E. Stiglitz gave an insightful lecture, titled, “Imagining an Economics that Works: Crisis, Contagion and the Need for a New Paradigm.”[6] Near the 15-minute mark of the lecture, Dr. Stiglitz made the following comment: “Today, about 3% of the population is engaged … in agriculture in the advanced industrial countries, and they produce more food than even an obese society can consume.” Evidently, there is no need for an employment rate of 90%, nor even of 50%. 20% employment is more than enough to cover all essential needs in agriculture, industry, and services of the human society. In other words, the current trend of growing unemployment is not a passing phase, but a new state to which humanity is entering.

As we can see, humanity’s return to reasonable consumption means that hundreds of millions all over the world will be permanently out of work. If we adopt the suggested program for educating the unemployed, that change will be a welcome one. It will enable us to accelerate the shift in our interrelations to match the global and connected world that humanity has become, where everyone is dependent on everyone else in every aspect of life.

If we do not properly address the challenge of mass global unemployment, it could undermine and topple governments and regimes, and become a worldwide catastrophe.

The Statistics Aren’t Telling the Truth about Unemployment

The true numbers of unemployed in the U.S. and Europe is far higher than reported. The current method for measuring unemployment does not take into account people who aren’t seeking work by their own volition or who have given up on reentering the job market. The fact that these people are not counted in the workforce significantly decreases the reported unemployment rate, which is defined as the ratio between the workforce and the general population at the working age (usually ages 16-64).

In most countries, even one who works part time, even an hour a week, is considered employed. There are many other misrepresentations in the current measurements of unemployment, and the majority of those methods tilt the numbers downward. The difference between the reported unemployment and the real one varies among countries, but it would not be overstated to say that the actual rates of unemployment are 25%-50% higher than reported.

The contraction of the economic activity due to the global crisis, and the return to balanced economy are exacerbating the crisis in the job market. Unemployment is currently a global epidemic expected to keep spreading rapidly and reach unprecedented proportions. It is a social time-bomb whose cord has been lit, and it is not very long.

Unemployment Threatens the Stability of Governments and Regimes

It seems like the rise in unemployment rates is worrying governments and decision-makers because they perceive it as causing social and economic ills. The state strives to put the unemployed back to work as quickly as possible and is willing to pay the unemployed a basic ration for a limited period of time. Yet no one among decision makers seems to be asking, “What should a citizen’s healthy and balanced life in my county be like? Is it right to encourage unemployed people to rush to find a new job and get back in the (rat) race? Who gains or profits because of it?” Another point is that a dissatisfied constituency will not vote for the incumbent party or president, and politicians know that all too well. Third, there is genuine fear that the demonstrations and the (currently peaceful) protests will become a violent wave, washing over the entire world, as it already has in some countries in the Arab world. We have already seen sparks of riots, racism, and other forms of violent protests in France, the U.K., Italy, and Greece.

With the Arab Spring in the background, rulers being overthrown, and civil wars and bloodshed breaking out, the tenacity of unemployment is a cause for grave concern for governments and for economists in the Western countries.

An Emergency Program to Deal with Unemployment

As we have seen, the rising unemployment and the bearish forecasts make it a problem that requires immediate attention. This socioeconomic time-bomb destroys families, deepens inequality, divides society, and could revert to violence and social and governmental instability.

Even countries where the economy is currently solid will do wisely to adopt the programs to be presented in this chapter. The interdependence of economies and financial markets throughout the world leaves little doubt that the crisis will spread and affect everyone. Germany, for example, is tied to the Eurozone by its navel; it is already being hurt by the current financial crisis there, and the prospect of near future recovery seems very slim at the moment.

Every person should recognize that in a closed global and integral system, in a global village, one’s fate depends on one’s approach toward others. Relations based on mutual concern, social solidarity, balanced consumption, and cooperation and harmony are all mandatory today. The chaotic and volatile reality of our time necessitates a change in the awareness of all the people in the world. We must all learn to live in the new network of connections. We must know how to adapt ourselves to it, or we will remain essentially opposite to it, and as long as the gap between us and the network remains, the crisis will keep worsening personally, socially, and globally.

The Purpose of the Emergency Mechanism for Dealing with Unemployment

To deal with the problem of unemployment, we must set up an emergency mechanism whose goals are as follows:

  • Admit the unemployed into a regular study framework (details below), which will be defined as employment. Anyone who partakes in it will not be considered unemployed, neither in the state’s statistics, nor in one’s social status.
  • A participant in the study framework will be given a grant that allows for reasonable sustenance, subject to participation in the educational framework. The qualifications for the grant are participation in the study program. The derogatory term “unemployment compensation” will be replaced with “grant” or “scholarship,” which testify to the fact that that person is taking part in an educational course. The semantics here is of paramount importance.
  • The sum of the grant will be determined by the state, considering the necessary conditions of the employee and his or her family, with the aim of allowing them reasonable provision.
  • Another important goal is prevention of unemployment, bitterness, and mass demonstrations. Just as one’s ordinary job forms a social framework, the new educational program will be a social framework. This framework will alleviate not only the social and financial distress, but will also secure a healthy daily schedule, prevent idleness or decline into crime and various addictions. One who partakes in the educational framework in return for a government sustenance grant will be regarded as one who has found a job. That person’s work is to study and acquire life skills—understanding the new reality and the changes it commits a person to undergo in order to sustain oneself with dignity—as well as to evolve personally and socially toward life in mutual guarantee among all people. Such a worker, who upgrades his personal worth, who receives a grant, and who feels that the state cares for his or her fate will not go into the streets to demonstrate.
  • Provision of practical tools for rejoining the workforce (details below).
  • Upgrading the social status of the unemployed from that of an outcast to that of a person being in a process of positive transformation and expansion of social and professional skills.
  • Deepening sympathy with the state and social cohesion, even—if not especially—in times of crisis. Understanding the crisis and its causes will prevent arguments and disputes, enhance social cohesion and sympathy with the state’s institutions, and will create a dynamic of change out of a sense of sympathy and understanding of the required change on all levels of life.

The Curriculum of the Educational Program

The content of the permanent study framework for unemployed that were “hired” to study in it will be as follows:

  • Personal finance, allowing dignified living within the limits that the grant allows. Imbalance of the family budget is a global phenomenon. The idea is to adopt a routine that will allow people to lead a life of dignity according to one’s financial possibilities. Such courses already exist and have proven to be successful.
  • Studying life skills under conditions of uncertainty, such as maintaining family integrity, parenthood, maintaining mental soundness, and improving social skills. The student will also acquire tools to assist one’s functioning in the proximate economic surroundings, with the emphasis being on ramifications of the crisis on one’s personal life and the social environment, one’s way of life, and the values by which one lives.
  • Expanding horizons regarding the implications of the tightening connections among individuals, firms, and countries on the daily reality regarding personal, national, and international affairs. Each person will have to understand that in the global world, all of us—ordinary people, policy makers, and tycoons—are in the same boat. Teachings will include explanations of the reasons for the global crisis, its impact on the lives of each of us, understanding the interconnections and the irreversible interdependence among individuals, firms, and countries in the entire international system, and the changes incumbent upon us in terms of human relations—the way we communicate, cooperate, and function on the daily level.
  • Acquiring the necessary social skills for a stable and peaceful life in the global and interconnected world: social solidarity, consideration of others and of the environment, balanced consumption and so forth. This part of the course will also include an explanation about the necessary transformation in social and economic frameworks, in business entities, work places, education systems, and family life. The educational, informational framework will lay down the basis for an internal change following which people will transform human relations and internalize the extent to which reality has become global and integral. The transformation will include a shift from relations based on competition, individualism, egoism, and maximizing personal benefit, to the kind of relations necessary in conditions of mutual dependence among all parts of the system—cooperation, mutual concern, consideration of others’ needs, balanced consumption, and mutual guarantee.
  • Qualifying students of the educational framework as instructors for newcomers into the framework.

All content will be taught through social activities, simulations, group work, games, and multimedia content. The learning will not be the traditional teacher-class frontal approach.

Benefits to the State from Implementing the Program for Dealing with Unemployment

  • Systemic and government stability. The government will not be perceived by people as indifferent or as doing only the necessary minimum, but as one who regards unemployment as a high priority issue and allocates substantial resources for that purpose, primarily in developing the human capital and people’s social skills.
  • Enhancing the sensation of sympathy with the state, and lifting the national morale. Within a few months after the implementation of the program, a new generation will emerge—that does not strive for riots or unrest, that knows the reason for the crisis and why they had lost their jobs, that understands the laws of the global and connected world and the changes incumbent upon each person, and upon society as a whole.
  • Optimism is a mighty power. The recognition that we must achieve a balanced economy—not one that is based on consumerism, but on rational consumption and mutual guarantee—holds within it an optimistic economic and social vision. A generation with such a view will achieve economic prosperity, political and social achievements, thriving health, and a sound family life. This optimism will also allow the state to prepare to provide sustainable solutions to the crisis without a political hourglass dripping fast and causing it to act and decide rashly.
  • Saving up on resources. Financing the new educational program, paying for the grants to the workers, and defining the study as a job will indeed cost money, but will also save a lot of money and resources. Many governments invest in national infrastructure projects and execute large-scale construction projects during crises. The fortunes spent on the national infrastructure is regarded as “growth-generating investments,” and numerous people are employed in them. The cost of investment in infrastructures such as roads and railroads is far higher than the cost of the emergency program we are suggesting. Moreover, investment in infrastructure will not solve the real problems that today’s global and connected world presents. The damages of hidden unemployment—both in the private sector, and especially in the public sector—are enormous. The public sector is expected to contract substantially, particularly in Europe, but also in the U.S., and taking the unemployed into the new education-and-grant program will be far less expensive, and far more efficient, than employing them in national projects.
  • Financing the efforts to deal with the unemployment problem: The cost of employing a person in the public sector in most countries is overblown and entails large-scale hidden unemployment. The salary of one person who is actually in hidden unemployment can finance the grants of at least 2 unemployed. The expected growth in unemployment and cuts will save the money that will be invested in establishing and maintaining the government educational framework, which will qualify those who were ejected from the job market, and ease their transition into the new way of life. For more details on the surplus following the expected rise in unemployment see Chapter, “Surplus and Improving the Public’s Well-Being.”

The Program’s Benefits to the Unemployed

An immediate implementation of the program holds great benefits to those who have lost their jobs, starting with the ability to provide for one’s family, through acquiring life-skills and tools for managing the family budget, improvement of the social status and self-esteem, and acquiring knowledge and social skills necessary for any person in today’s global and interdependent world. Understanding “the big picture,” our belonging to an educational framework that equips every person with the tools to become integrated in the new world, coupled with the supportive social environment, will give hope and optimism for the future. At the same time, it will create a way of life that has a better balance between work (study), family, community, and society.

Defusing the Social Time-Bomb

At the end of the day, it is hard for us to come to terms with the fact that unemployment has not yet peaked but is expected to climb to proportions we have not known before. The current economic and social systems will not be able to cope with the ramifications of unemployment in the high double digits. The suggested program will allow citizens and state to gradually and mutually adjust to the new situation. The unique curricula will prevent unrest and violence, and will allow for normal life to continue, on the way toward a transformation in human relations, as required by the interdependence that the current crisis has uncovered. That change will manifest in a new and balanced economy, under the umbrella of mutual guarantee, which will facilitate not only the provision of people’s basic needs, but also a quality of life, profound fulfillment, harmony, and sustainable social and economic structures.

Looking forward, it is likely that many will choose to join the program of their own volition and not because of circumstances. Some will even choose it as a way of life. The surplus in productivity and technological progress, alongside the return to a balanced and reasonable economy, will facilitate a dignified existence to all the people in the world, assuming the majority of them will choose to live under the principles taught at the educational program. A few will provide agricultural products, a few will provide industrial goods, and a few will provide the services and trade necessary for our lives. It will be possible to alternate performing those functions as long as the focus is not on material goods and competition. Instead, the focus will be on personal and social development, ties of mutual guarantee and harmony among all people, and between humanity and Nature.


[1] http://www.oecd.org/document/17/0,3746,en_21571361_44315115_48753169_1_1_1_1,00.html

[2] http://www.tradingeconomics.com/united-states/unemployment-rate

[3] World of Work Report 2011: making markets work for jobs (International Institute for Labour Studies, 2011), ISBN, 978-92-9014-975-0, http://www.ilo.org/wcmsp5/groups/public/—dgreports/—dcomm/—publ/documents/publication/wcms_166021.pdf, p 7

[4] http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Unemployment_statistics

[5] World of Work Report 2011: making markets work for jobs (International Institute for Labour Studies, 2011), ISBN, 978-92-9014-975-0, http://www.ilo.org/wcmsp5/groups/public/—dgreports/—dcomm/—publ/documents/publication/wcms_166021.pdf, p viii

[6] http://www.dictionaryofeconomics.com/resources/news_lindau_meeting

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