On “structural unemployment”

by J.A. Myerson

In a new segment we’re calling “Anticap Nerd-rant”…

One pesky byproduct of trying to teach oneself about economics and finance so as to figure out Just What The Hell Is Going On Around Here is needing to learn lots of obnoxious jargon. One particularly cringe-making example is en vogue of late, “structural unemployment.” What people mean when they say it is that the base of unemployed workers are actually unemployable, because they simply lack the job skills that employers want.

I find this idea objectionable for a number of reasons, none of which is its assertion that there are structural impediments to full employment. That, I get, but I think the structure of this unemployment has different contours. The tone with which people talk about structural unemployment sneeringly implies that labor cannot meet the needs of capital, when this unemployment crisis is so clearly about capital’s inability to meet the needs of labor.

People are not crippled by lack of skill. It is capital that is crippled, insofar as it cannot by means of investing in people draw anything like the profits possible through investing in their debt, and profit it must. So, the extremely rich are getting exponentially richer as compared to the whole country, through the collection of money (sometimes on threat of prison)  from people who simply are not making enough money at their jobs to pay what is being demanded of them (because capital is not paying them money; it is lending it to them).

Unemployment is implied in debt like this. Debt makes capital much larger profits than are to be found investing in employing people to do meaningful — even long-term profitable — work. (Engineering and constructing, say, a national transit infrastructure that won’t bake us right off the planet.)

The unemployment structure, in other words, has less to do with people’s inability to perform the tasks needed than capital’s inability to invest in the tasks people need to perform. There are jobs a-plenty that need doing, if companies would hire people to do them, but those who own the capital stock of this country seem to be making too much on usury to care.

I’d like also to suggest that prison prescribes a contour to the structure of unemployment. Michelle Alexander is excellent on the prison system’s imposition of structural barriers to employment upon those who pass through (often thereafter to return.) We are taking about an in-no-way-insignificant and perpetually-increasing portion of the population. Incarcerated prisoners also perform labor, at Very Efficient Rates. As we know, the private sector is exceptionally capable in the field job creation, and the good news is that prison privatization is on the rise. Who an tell what exciting employment opportunities await?

Or how about this for structural inequality: in the 1990’s North American capital both stimulated Latin immigration (by undermining Mexican agriculture with NAFTA) and profited off of it (by exploiting extremely cheap labor, whose providers were afforded no right to redress if even those meager wages were stolen). Now, in an economic downturn, people like Mitt Romney go around referring to these people as “illegals” — a noun! Only one Presidential candidate — Newt Gingrich — has put forward an immigration plan that would provide jobs, and those through the implementation of a permanent, legally disempowered peasantry class, a concept of which, Tocqueville observed, Americans lack an intuitive understanding.

Perhaps I’m a curmudgeon objecting to a useful concept in economics because of its inelegant name. I’m not an economist. I don’t know. But I hate, hate, hate anything that implies the mass of unemployed people are at fault for their unemployment.