Thursday, February 6, 2014

Can America fix its cyclical Unemployment Problem: Revisiting an old debate?

Keywords and Terms: Unemployment Compensation; Cyclical; Relational; Disillusionment; Stigma Disenfranchisement, Congress, Free-Market Enterprise, Corporate America; Re-engineering; Mental Health Raved Homes; Coding and Algorithm; Machine Power; Globalization; Off-shoring; Change

I am confused; not so much about what is broken in American Politics; but, about what is fixable but which congress has paid little attention. The phenomenal perennial unemployment problem that characterize the free market economy continues to ravage many American homes. The recurrent nature of unemployment in the free market economy has made some economists diagnose this problem as endemic of capitalism; and somewhat, relational. To the untrained mind, the question is: what does cyclical or relational mean? In a lay man’s mind, cyclical means occurs every now and then or ever so often; some say every ten years, others claim five years. Relational, in the construct of an economist: unemployment and inflation are inverse variables. Simply put: when inflation is down, unemployment is often up. Depending on what data is used, unemployment continues to be a handicap to a completely free market economy; and the conventional approach of addressing the unemployment problem has woefully failed with globalization and hyperventilating revolutionary advances in Information Technology.

 The social implication of unemployment has been damaging: broken marriages and families, increasing mental health issues, domestic violence, drug use and college dropout, disenfranchisement and disillusionment and much more! Call them what you may, the devastating impact on American life, especially among the middle income group, has been horrendous. The stigma of waiting on unemployment line, food bank rotational roasters and public health services has promoted many stereotypes; a few of which has been used by politicians to ride into office. How about the slogan: Washington is broken and is going to fix it? Did anyone in congress do anything significant lately in solving America's unemployment problem except to fight over whether to extend unemployment compensation to the long-term unemployed?  Did any of our lawmakers contemplate a fresher look at the problem of unemployment rather than fight over the impact of unemployment compensation on the nation’s budget? Your answers to these questions are as good as mine. Interestingly or shamefully, the helplessness of the devastation of associated problem of unemployment on our neighborhoods has made a few of us in policy making, wonder: what in the world are we doing calling ourselves policymakers, when we cannot solve a problem that has, and continues to ravage American homes. Americans deserve answers to the cyclical problem of unemployment and men and women in United States Congress cannot continue to use the unemployment compensation issue as ping-pong to rising into office; or, humiliating another 40 million of our citizens, who for other reasons, may not have been victim of laziness. The downturn or stigma of not having enough education hardly suffice these days, where the labor force is rapidly being ravished by advances in information technology; and the odds of holding on to your job is partly determined by how quickly advances in information technology impacts your occupation.

Loss of self is professed by psychologists as the core component of schizophrenia. Many unemployed have identified with loss of self as a component of depression that they find themselves, after a loss of job or being unemployed for far too long. No one is adducing unemployment to schizophrenia or using the term, economic schizophrenia; however, unemployment schizophrenia is not far away from the question. Maybe that is why I am simply saying, I am confused. Confused in the context of being schizophrenic of unemployment problem; yet convinced that as a nation, we have the wherewithal to solve this problem, but has refused to do so for whatever reason. For many in the baby boomer generation, if America can send a man to the moon, there is hardly any problem that she cannot solve here on earth? When a neighbor of ours lost his home due to long term unemployment last year, to say the least, I was very worried and terrified. Worried and terrified, because I know many of us in the labor force are just a paycheck away from unemployment psychosis or schizophrenia. A paycheck away from unemployment psychosis is as bad as a paycheck away from mental health problems, seriously!

Taken together, unemployment and associated psychoses can influence the state of mind and welfare of families, communities, state and nation. To promote safety net in term of unemployment insurance checks is probably not the complete answer to the unemployment problem.  If it has been since FDR; that solution is outdated; and what variables existed during the thirties and forties that led to a prescription of this temporary solution as a panacea to unemployment, hardly exists anymore. The characteristic nature of industrialization that led to unemployment in the thirties and forties have taken a different shape or form because of advances in information technology and globalization. It is time that we as a nation take a deeper look at unemployment compensation; and seek to prescribe more evolutionary or attentive solution to the cyclical unemployment problem, to forestall the ravages of unemployment psychosis. Advances in information technology have revolutionized the way industries are ran and managed by corporate executives. It is time for change, not only in the convoluted acceptance of unemployment insurance as a temporary solution to unemployment problem; but rather, in terms of the realities of advances in information technology and how it has sped up production levels and allowed corporate America to make zillion of dollars, while millions of Americans remain on the soup line. It is time to consider other alternative solutions to unemployment insurance compensation as a way to smitten temporarily associated problems of unemployment.

The known stereotypes of blaming Americans for being lazy, looking too much for handouts or seeking easy access to services at the expense of taxpayers or the national deficit, hardly hold anymore. Here are some concrete eye opener: there are many more Americans between the ages of 24 and 62 who remain in long term unemployment, despite the fact that they own college degrees; many more Americans are obtaining social security disability benefits as a substitute for gainful employment, because they have remained unemployed for far too long, despite active search; there are more significant proportion of Americans who have lost their jobs because their kind of work has been shipped overseas by corporate America, under the pretext that labor cost is exorbitant if those goods are produced here; the rapid advances in information technology have been at a growth pace never before imagined or contemplated, that in some cases, many jobs have been killed and some professions obsolete because machine power has practically taken over; the range of factors that had facilitated  growth during the early era of industrialization, are much different from those that we are seeing in the information age.

Current research in the field of information technology is suggestive that it is feasible for many more professions, going obsolete because of coding and algorithm advances; and, the potential these technologies have in revolutionizing efficiency of production and manufacturing, must never be underestimated. Current political regulations and legislative constraints in some states have made it difficult for some recently laid-off unemployed to retrain in other professions, because of the added costs. Worse still, some state governments are jostling and getting into tax-right-off competition for some Fortune 500 companies moving into their state, without imaging or imagining what depletion the move may have on the 'looser-state' labor force of the migrating corporation. Furthermore, some states are looking at unemployment compensation from the prism of potential fraud, without investigating alternatives to unemployment compensations as solution to unemployment problems. Despite the ravages of unemployment on our neighborhoods, the reality of machine power, consequence of increased production efficiency, is probably outstripping the management's ability to retain more on the job. Some might view the increasing advances in information technology as needed energy for growth without contemplating reforms to the old solution of unemployment compensation. We beg to differ and are calling for visitation of a solution that is probably archaic considering advances in information technology and how they are rapidly changing the face of the economy. 

It is important to understand that the nation cannot afford to undermine the welfare of its people because of the failure to act; or, advances in one area of America's economy, information technology. Whether we like it or not, the tsunami of change that is coming to the production processes and the possible impact of machine power taking over many more professions are real. It is time to start looking at alternatives for many more Americans that will be turned out to pastures because of advances in information technology.  The fragments of disorder to human welfare from threats of advances in information technology are potentially going to quadruple in the coming years, as production processes continue to be stream lined with advances in machine language and its ability to replace man in the labor force. Change is here and its consequences are making old economics paradigm questionable, if not on shaky grounds.

In this article, we have argued for new approaches to solving the cyclical unemployment problem in America's Economy, absent the conventional unemployment insurance payment to the long term unemployed. The serious threats of machine power to the continued employment and welfare of many Americans are real. Advances in computer coding and algorithm are going to bring a wave of change that has the potential of eradicating many more professions and getting more Americans out of work. The argument here is not to kill the machine or slow down pace of how information technology is revolutionizing production processes or impacting employment; rather, the argument is to find a newer solution to an old problem that is not going to go away. We are suggesting that Congress revisit unemployment compensation as a panacea to solving structural unemployment problem, because the nature of the problem or factors that precipitate long term unemployment, while still similar somewhat during the rapid industrialization of the forties, fifties and sixties, are hardly the same, consequent from what we are experiencing in the economy. The reasons for economic recession are compelling; the revolutionary change from quadrupling advances in coding and algorithms are even more compelling and the potential they have in impacting long-term unemployment, deserve a second look. Adoption of newer solutions to combating long term unemployment and practical solutions to shoring up unemployment insurance are probably in order just, considering what is to come.

Before being labeled as an alarmist, it is imperative that you look at the various illustrative examples of how people have lost their jobs or been displaced or replaced by machines; or, how corporate decisions have off-shored some production processes, vis-à-vis, jobs. The vexing problem of unemployment is not going to go away by itself; and, the divided congress isn’t affording a more concrete look at social welfare programs, not from the prism of cost, but from a more holistic and practical way that may bring succor to those who have lost their jobs and those about to.  Corporate America would continue to look out for its bottom line, just as it should rightly do; however, our government has the obligation to remain the government of the people and by the people. For this and other reasons, we are calling for a revisit of using unemployment insurance compensation as the primordial solution to structural unemployment.  In conclusion, we are suggesting that the consideration of other methods of addressing structural and cyclical unemployment, endemic of the free market economy, is evidential and not out of order, considering the potential change around the corner. The alternative methods of ameliorating unemployment problems will contribute newer knowledge to understanding how to better address this nagging problem; and, significantly assist American families through recovery of imminent unemployment and its associated problems.