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Approach to Full Employment in Europe

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An ironic fatalism surrounds the issue of unemployment today in Europe. Everyone agrees it is of vital importance to the present and future society, yet few people believe there is anything that can be done about it. In spite of the fact that employment is the principal means by which democratic, market economies seek to provide their citizens with opportunities to meet their needs and fulfill their socio-economic aspirations, we accept with a sense of resignation that a significant portion of the population will not and cannot avail of that means for one reason or another.

Such a conclusion is not tenable, practically, morally or theoretically. Theoretically, we must understand that the number of jobs created in a society is not subject to fixed laws of nature. It is a question of human choice. Each new person born generates more than sufficient work to support their own future employment, if only artificial impediments do not prevent them from doing so. Morally, we cannot and should not accept that modern society, which has found ways to defy gravity and explore outer space, is incapable of fashioning a social system that enables every citizen a reasonable livelihood. Practically, we should understand that societies, like businesses, utilize only a small portion of the resources and potentials at their disposal and that abundant opportunities exist to harness untapped potentials for job creation. There are innumerable factors, which contribute to the creation of new jobs, and there is ample scope for action, even within the limits imposed by structural rigidities and political vested interests.

Our environment became polluted when business strayed from the basic axiom that industry is meant to serve society, not disturb the physical environment. The disturbance was a result of unthinking initiatives. The argument that pollution is inevitable or a lesser evil is not valid. Pollution can and must be rooted out. Employment is a natural birthright with which no government, for whatever reasons, has a right to tamper. Employment is a political right and only that government that creates full employment is politically right. No government has the right to justify unemployment of any degree. The key to effectively addressing the problem of unemployment is to recognize that it is a man-made problem and fully lends itself to be solved by human initiative. To quote Willy Brandt, "problems created by men can be solved by men."

There are innumerable practical steps that can be taken, but the efficacy of those measures will depend on the political will with which they are undertaken. Therefore, will come first. Although everyone will agree that eradicating unemployment is highly desirable, it is difficult to garner political will for action precisely because most people believe that a high level of unemployment is inevitable and cannot be eradicated. Political will is based on social will and social will depends on widely held beliefs. If society comes to understand that creating full employment is feasible, the required social and political will can be generated to achieve it. Therefore, formulating a sound theoretical approach to employment generation becomes a very important practical step toward dealing with the problem. In the words of management expert Peter Drucker, “there is nothing so practical as a good theory.”

Unemployment is a symptom of how the society is functioning. The same symptom may result from very different causes. The symptom of unemployment can result from strictly economic factors as it did during the Great Depression. But the problem of employment today – most especially in Europe -- is political rather than economic in origin and therefore it cannot be effectively addressed by relying solely on economic policies.

Our approach is to consider employment in its widest context as an activity of society and to see its relationship with the development of the society. This approach leads to several important observations and conclusions:

  • The development of society results in the emergence of new activities, organizations, technologies and ways of life, which bring with them new employment opportunities.
  • At any point in time, no society utilizes more than a small fraction of the potentials available for its development. These potentials include the collective energy of the society, the accumulated knowledge of humanity, proven technologies, practically useful information, capacity for improving organization, systems, skills, etc. This becomes particularly clear during times of war when societies mobilize themselves for very high levels of production and other activities, e.g. during WWII, the Americans abridged the time required to build new freight ships from three months to four days.

Assuming the perspective of the society as a whole, a wide range of strategies can be formulated to accelerate job creation by raising social aspirations and expectations, increasing the speed and productivity of social activities, innovation and dissemination of new products, processes, services and activities. A few illustrative examples can be provided but the actual list of appropriate strategies should arise from a detailed examination of actual conditions in each locale. These strategies can be categorized in terms of whether their impact on job creation is direct, semi-direct or indirect.

  • Direct: Numerous studies confirm the existence of a substantial shortage of workers with the required level of skills to fill vacant positions. Tool, die and machining manufacturers in the USA report that they are forced to invest in automated equipment because of their inability to recruit sufficient people even for high paying jobs in manufacturing. One study estimated that 80% of small firms in Germany find it difficult to recruit the skilled people they require. Another study estimated a shortage of 158,000 workers with networking skills in Germany alone. In Austria, 42% of enterprises report skilled-labor shortage. The technical skills shortage applies to jobs in every sector. Firms also find it difficult to recruit people with essential non-technical skills, especially basic interpersonal skills for selling, customer service and working in teams. Equipping job seekers with the types of skills firms are seeking can significantly accelerate job creation and business growth.
  • Semi-direct: Unemployment rates tend to be highest among young people with the lowest educational attainments. Raising the minimum mandatory level of education by one or two years will slow the movement of youth into the workforce, enhance the learning capacities and employability of new job seekers, and increase job growth in education and education-related fields such as publishing.
  • Indirect: Any action that increases the speed, efficiency and productivity of social activities has at least an indirect impact on job creation. The increasing speed of communications and transactions resulting from cell phones and computerization are illustrative. Faster decision-making by government accelerates activities in the private sector.

During the 19th and 20th Century economic development has been spurred by dramatic advances in scientific and industrial technology. The argument that technology eliminates jobs is a very partial truth that veils its even greater role in job creation. New technology does directly eliminate some types of jobs. It abolishes low-skill, low-pay jobs and creates high-skill, high-pay jobs. It offers people higher standards of living and expands the scope of economic and social activities, resulting directly and indirectly in the creation of far more jobs than it abolishes.

Technology has been an important driver of economic growth and employment, but equally important have been advances in the technology of social organization – the way we organize work to increase efficiency. A plethora of social innovations have also been a major contributor to employment generation. Money, mass production, multi-national corporations, television networks, producer cooperatives, research institutes, NGOs, shopping malls, courier services, fast food, and the Internet represent innovations in the technology of organization, not just in the technology of material processes. The scope for organizational innovation, which is the science of management, is virtually infinite and remains largely untapped.

Money is the most powerful and least understood of all social organizations, one capable of unlimited innovation that can generate unlimited economic and social development. Banking, mortgage, insurance, venture capital, investment funds, and the credit card are monetary innovations that have supported an enormous expansion of economic activity and job creation. There is ample scope for expanding the use of these instruments and for new monetary innovations that will have a similar impact.

Employment is a function of social aspirations and expectations. When citizens expect a higher level of communication, transportation, education, health services, entertainment or culture, society is energized and resources are mobilized to provide them. The aspiration releases the energy, the energy generates the effort and resources needed, which create the jobs. The social aspiration for higher technical education has generated a 25-fold multiplication of engineering colleges in one state of India within the last 25 years. Rising concern with the environment has created millions of jobs in industry. Aspiration for higher standards of comfort and convenience are major job generators. When women demand greater social freedom, more jobs are created to eliminate the drudgery of house work, the demand for higher education increases, shopping, entertainment, sports and leisure activities expand.

These observations illustrate that the issue of employment embraces the entire society – its values, culture, attitudes, expectations, organization and skills, as well as technology and public policy. Taking this wider perspective, ample means can be found for expanding employment through measures that accelerate development of the society as a whole. Full employment is an achievable goal for Europe today.

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