The unemployment can be defined like the inactivity of a person wishing work ler. This definition of unemployment knows many alternatives and its concept always gives place to theoretical and statistical controversies.
Unemployment is often regarded as residual and voluntary until the beginning of the 20th century. At the time of the Great Depression of the Years 1930, unemployment becomes by its width one of the social problems and economic most central of the developed Pays. The determination of the level of the Emploi also becomes with this Economic crisis one of the most fundamental questions of the economic reflection. Unemployment remains, in the current economic reflection, a political subject of confrontation: its causes or the political ready to fight against him, thus do not make consensus.
Associated with the Poverty, the Precariousness and the Exclusion, it is also in the foreground of the political debate since the end of the Glorious Thirty in some countries of Western Europe, where it reached very high levels; unemployment transforms the social structure of the company, upsets the life the most touched of, while causing the concern of many active.
Unemployment is however not regarded as a major element of the economic and political debate in the countries which are close to the full employment.
Unemployment is prone oppositions between the economic schools of thought, and between the economic models and social of the various nations. Difficult to apprehend in the Developing country, where the Moonlighting is very important, its importance varies much a country developed with the other.
Definitions of unemployment
Historical context of the concept
The concept of unemployment is intrinsically related to the idea of Salariat, i.e. of a contract between a worker and a Employeur. The individual is unemployed who wishes to sell his labor force to another individual but does not find taking in the conditions that it require. However if paid work from now on were essential in the contemporary Western companies, there remains a historical reality, fruit of an evolution of the economic system.
Until the end of the 19th century, the economic activity of the individuals is shared between work rural, in residence and independent, and the work paid in factory. Many people cumulate the two types of activity and the peasants devoting itself to an agricultural production from a point of view of Autoconsommation remain a long time numerous. There exist already forms of under-employment: seasonal worker in the case of the agricultural sector or of the economic situation at the time of the decelerations of activity. It is however difficult to speak about unemployment in an economic context where the wage report/ratio remains an exception.
Historians of the economy stressed that unemployment was finally an invention of the end of the 19th going century of par with the constitution of the urban proletarian class. It is at that time that “the border work/not-work becomes a clear cut between two worlds and is lived like such, the more so as it is separation of place, between work place and place of habitat. ”
Various statistical definitions
In many countries, the statistics of unemployment know the cohabitation of an international definition suggested by the International office of work (the ILO) and local definitions specific to the national organizations.
According to the ILO, any person is unemployed (of more than 15 years) who fills the following criteria:
- “to be without work”, i.e. not to have an activity, even minimal, during the week of reference;
- “to be available to work”, i.e. to be able to accept any employment appropriateness which arises in the fifteen days, without a third obligation being an obstacle with the return to the activity;
- “to seek an employment actively, or to have found of them one which starts later on”.
To be unemployed according to the European statistical system Eurostat, it is necessary to have been without work during the week of reference (that is to say less than one weekly hour of activity) and to have made specific steps in order to find an employment, without inevitably being itself declared like unemployed near the administration.
With the the United States, the Office off Labor Statistics account like unemployed people not having employment, while having sought actively during the 4 past weeks, and available to work.
In France, the indicator of the National agency for employment (ANPE) provides the figure of the applications in end of the month (DEFM). They are the “people without employment immediately available, held to achieve positive acts of looking for a job, in the search of an employment at immediate and full-time duration” (category 1 of ANPE, to see Chômage in France.)
These various definitions imply that measurements of unemployment vary from one statistics to another according to the countries, the methods or the organizations comptabilisateurs. Thus, in France, the people with unemployment not registered with the ANPE will be listed by the ILO. Conversely, the applicants for work carrying on an activity lower than 78 hours per month can be entered by ANPE if they fill the other criteria.
Limits of the statistical tool
According to the countries, the informal economy (known as “black” or “gray”) generates not declared credits which can be in addition entered like unemployed (to allow the office plurality allowance-wages).It is also difficult to compare the figures of different periods, because the definition itself evolved/moved considerably in time. It is thus very delicate to compare unemployment rate in time.
It should be also noted that the population of the occupied credits is in increase in the majority of the countries. Thus, in France for example, there was 19,9 million credits occupied in 1960,23,4 million in 1980, and 26,7 million in 2000, an absolute increase twice more important than that of the number of unemployed (negligible in 1960,1,8 million in 1980,3 million in 2000).
Unemployment: descriptive approach
In France and in the European Union
See also: Unemployment in France
See also: Unemployment in the European Union
History
Unemployment, definite like an undergone inactivity, already exists in the traditional companies, but its statistical inexistence - in France, the first statistics date from the census of 1896 - makes not easily quantifiable before the 20th century. One can however advance the probable figure from 6% to 8% unemployed in first half of the 19th century, which makes it possible Karl Marx to describe a “industrial army of reserve” in the Capital (1867). After having decreased with the Beautiful Time , unemployment reappears after the First World War following the crises of Reconversion and in spite of the strong growth of the Années 1920. It reaches rates in the neighborhoods of 10% with the the United Kingdom and in Germany. A spectacular rise follows the economic crisis of 1929, the reaching unemployment of the peaks of 25% with the the United States and 33% in Germany. Only Germany succeeds in really solving the problem in a particular political context, the Nazisme which settles thanks to the economic disaster.
The Glorious Thirty which follow the Second world war are marked by a very weak unemployment bordering the 2% in Western Europe, the 4 to 5% in North America and the 1% with the Japan.
Unemployment starts to grow as of the end of the Années 1960, and knows a particularly significant rise following the Oil crisis of 1973. Ten years later, it touches 8,3% of the population of the countries of OECD. The preserving revolution in the United Kingdom and the United States with the elections of Margaret Thatcher and Ronald Reagan lead to a timid fall of unemployment in these countries, significant drops of unemployment is also noted in FR of Germany until the reunification.
In 1994, unemployment would touch 7,8% of the active population in the countries of OECD. Since, he knew significant drops with the the United States, the the United Kingdom and in other countries of Europe like the Ireland or the Spain. There remains endemic in France, as in Germany since the fastening of the Länder of the East.
Limits of the definition of unemployment
At the fourth quarters 2004 according to OECD the unemployment rate standardized for the men from 25 to 54 years was of 4.6% with the the United States and 7.4% in France. At the same period and for the same group, the Taux of employment was of 86.3% in the United States and 86.7% in France.
One thus notes a higher unemployment rate 60% in France than in the USA, whereas a more significant number individuals work in the first group - what is against-intuitive if one expects that the level of unemployment reflects the situation of the job market.
It is thus necessary well to take care not to interpret without precaution the figures of unemployment. Indeed, the definition of unemployment rests on the fragile distinction between not-employment of a potential credit on the one hand and the inactivity on the other hand. In spite of the efforts of definition and standardization, this measurement thus remains extremely subjective and easily influenceable by various policies undoubtedly not improving truly the situation of the job market.
OECD rather recommends the use of the Taux of employment than of the Unemployment rate to judge effectiveness of the Job market and Employment Policy .
Comparisons between country
See also: Unemployment rate
With the the United States, the Job market is characterized by a logic of Flexibilité. The employees are paid according to their supposed effectiveness, and the precarious employment multiplies as much in the industrial sector and as in the tertiary sector, allowing the workers not qualified to remain competitive. According to Philippe d' Iribarne, the precarious employment is more easily accepted because the social hierarchy and the standing are less problematic. The country is thus marked by a frictional Unemployment important but relatively stable. The share of the long-term unemployment , i.e. higher than one year, is of 6,1% in 2001.
Scandinavian countries S as the Sweden are marked by one very strong solidarity between citizens and of the very important assistances to the least employable workers. On the other hand, the unemployed are held to accept employment which is proposed to them. In the case of the Denmark, the Entreprise which lays off does not pour a allowances. the Assurance unemployment is not obligatory; it is managed by several private cases. In the event of job loss, the unemployed touches 90% of his old wages during four years at the maximum . The allowance is not decreasing. It is versed to 100% if the person worked at least 52 weeks during the three last years. This policy causes important expenditure for the State. The researchers of employment are also helped by the municipalities. They must accept the Stage S and the Formation S suggested.
In the majority of the European countries, the high level of Social protection comes to answer the important identification of the individuals to their employment and their station in the professional hierarchy. Unemployment rate is very high, and the significant part of long-term unemployment: 43,7% in the Europe of the 15 and 37,7% in France, always in 2001. According to Philippe d' Iribarne, it is this social logic which explains the difference in attitude between the industrialized countries.
In number of Developing country, unemployment is a not very relevant concept. Statistically, it can reach official rates often exceeding the 30%, but the measurement of unemployment neglects the economic activities independent and family intended for subsistence farming and representing the essential source of richness for populations put at the variation of the capitalist economy. In the poorest countries, this free-lance work accounts for 37% of the activity in urban area, and well more in rural area.
The experiment of the last quarter century showed that certain formerly poor countries could solve the problem of unemployment. The Asian Dragons (South Korea, Taiwan, Singapore…) in particular, but also the Ireland for example, succeeded in eliminating the employment problems and know low Unemployment rates. In the majority of the cases unemployment was reduced by a strategy of integration of the countries to the International business and their specialization in activities requiring many Main-d'oeuvre, while the strategies of substitution of importation would have only little effect.
In many countries, in particular in Africa, political instability and economic constitutes a discouragement with the investment of the companies and explains a big part of unemployment. The constant increase in the active population because of strong Natalité worsens the problem. In the case of this continent, centralization interventionist of the decisions relating to the agricultural production in the capitals where reign corruption constitutes an obstacle essential with the rise of rural agricultural employment. It is however the agriculture which could provide the essence of missing work.
The halation of unemployment
According to the statistical definitions, each individual can return in one of the three following categories:
- Unemployed if it fills the criteria of the definition,
- active occupied if it works indeed,
- inactive if it does not work and does not fill the criteria of definition of unemployment (example: reprocessed S, the Child S, the student S…).
The Economic crisis started in the Western countries as from the years 1970 contributed to create new situations making this categorization sometimes dubious.
It is noticed initially that a certain number of people are between a situation of inactivity and unemployment ( cf zone 3). Among them, much wish to work but are not entered because they have not enough chance to find an employment (and are thus exempted of looking for a job) or because they gave up, by discouragement, to seek an employment. In this last case, it can be a question unemployed of long life undergoing of the cases of extreme social Exclusion, mothers with the hearth wishing to work but not starting a step, or of students choosing to continue their studies failing to have been able to be made engage.
The fuzzy zone between employment and unemployment ( cf zone 2) increases with the multiplication of the atypical forms of employment: workers undergoing one nondesired part time, people seeking an employment but having worked a little in the week or the month of reference, as well as the people having an precarious employment.
In the same way, one finds situations intermediate between employment and the inactivity ( cf zone 1), situation occupied by the individuals making the choice work less. Lastly, the clandestine workers and the employees “with the black” are not catégorisables in any of the three groups ( cf zone 4).
Sociology of unemployment
Certain populations are more likely to undergo unemployment, either because they do not have “a good” qualification, or because they have a weak will to work, or because they undergo a phenomenon of Discrimination. These causes of unemployment can combine.
The will of work appears by the capacity of the individual to accept not very desired stations with weak wages and to be solved to compensate for the economic obstacles with its employment by accepting certain constraints like the Mobilité. The Unemployment rate is thus much higher among nonthe graduates (see table), and, for the graduates of the Higher education, it strongly varies according to training, and the reputation area of the university or the school of formation.
The long-term unemployment and the simultaneous coexistence of not provided job offers could be primarily related to problems of inadequacy between the offer and the application for a job.
In France, the number of graduates trained in certain fields (history of art, for example) does not correspond to the real needs of the economy. Some economic sectors know, in the developed Pays, a deficit of Main-d'oeuvre (Artisanat, personnel of old people's homes,…).
Unemployment and discriminations
If the qualifications constitute one of the most discriminating variables |- ! Year!! Without diploma, Patent or STOCK!! CAPE, BEP and equivalents!! Baccalaureat and equivalents!! higher Diploma (Vat +2)!! higher Diploma (Vat +5) |- |1999 |17,9% |11,1% |10,7% |7,1% |6,3% |- |2005 |15% |9,3% |9,2% |6,6% |7,0% |} |style=" vertical-align: top" width=" 40%" |
Different experiments
Among the modest social categories, the work is a big factor of Honneur and personal valorization, the more so as the distinction between “workers” and “lazy” made there more quickly. Unemployment is thus lived like a loss of identity and Dignité which worsens at the time of each failure to recover an employment or when the unemployed must start the administrative approaches which complete its categorization of unemployed. Moreover, the Ennui is much deeper in these mediums where opportunities of devoting itself to alternative activities (cultural, associative, sporting…) are rarer than in the easy mediums.
On the level of the global population, the importance attached to the fight against unemployment depends less its volume that effects of advertisement or that waves of localized Licenciement S relayed by the Médias. The feeling would be that the parties of left are not more capable to solve unemployment than those of right and conversely, from where the weak impact of the question of employment on the end result of the elections or Jacques Rueff tried to show that unemployment rose primarily from the obstacles to competition imposed by certain monopoleuses institutions like the trade unions, and sometimes the State.
To include/understand the neo-classic analysis of unemployment, we in a first situation place where the volume of employment is L1 and the real wages wr1. For an exogenic reason, an technological innovation for example, the application for a job of the companies decreases ( cf curve “Application for a job”), while the offer of work remains constant.
This evolution induces a new point of balance between supply and demand, and thus necessarily new wages, noted wr2. The passage of the wages wr1 to the wages wr2 causes a rise of “voluntary” unemployment because certain applicants for work, ready to work for remuneration wr1, prefer to remain idle if the wages are wr2. The volume of employment is L2. It corresponds to the natural unemployment rate of the economy.
However, it is possible that, for various reasons (regulation, minimum wage, pressure of the trade unions), the wages are not flexible with the fall and remain, in spite of the fall of the application for a job, on the level wr1. The volume of employment is then defined by the number of workers whom the companies want to engage with these wages, i.e. L3. In this situation, unemployment rate is higher than the natural rate, because of the lack of flexibility.
Thus they are the Syndicat S or the regulations ic state which - by preventing the prices and the wages to play their part of variable of adjustment - cause the massive increase in unemployment. Jacques Rueff explains:
The balance of under-employment
See also: balance of under-employment
For Keynes, the companies engage consequently with their anticipations of outlets. It is thus the effective Demande which determines the level of the production. This same level of production fixes the level of employment. With final, it is thus the only effective request which determines the volume of the production and the volume of employment.
To represent the economic equilibrium obtained graphically one determines initially the function of total request (DG1) according to the real income (Y). The first bisectrix (DG=Y) is in addition traced which describes all the points of possible balance, i.e. points where demand and are equalized. The intersection of DG1 and the bisectrix makes it possible to define effective balance. However, nothing ensures that the production defined by this balance (Y1) is the production which allows full employment (Ype). If it is not the case, effective balance is not equal to the balance of full employment (Epe) and there thus exists an involuntary unemployment.
The analysis is thus radically different from that of the neo-classics. At Keynes, there is no more, strictly speaking, of labor market: the real wages are not the equilibrium price between an offer of work and an application for a job. It is not either because the operation of this market is blocked (by the trade unions, for example), prohibiting a fall of the real wages, that unemployment exists. The level of employment is fixed at the macroeconomic level, apart from the job market: it is the product of the effective request. It is thus conditioned by the two components of this request: propensity to consume households and the investment. It is only when the level of employment is given, according to a level of production corresponding to the effective request, that the real wages are fixed. It can thus exist a balance of under-employment i.e. a situation where the effective request corresponds to a level of production lower than that which would allow the full employment. A fall of the real wages would have, in this situation, only for effect to increase unemployment, in consequence of a decrease in the effective demand (any fall of the wages involving a fall of consumption).
For Keynes, in the short run, marginal propensity to consume households is stable. The level of employment is thus basically bound, for him, with the other variable of the effective request: the investment.
More recent theories of balances of under-employment propose the idea of a Salaire of efficiency: the Nouveaux keynésiens note that difficultée for the companies to measure the real Productivité their employees (this measurement has a cost) can lead them to remunerate them by the top of the wages of the market, in order to reinforce their incentives to increase or maintain their productivity to remain in the company whose wages are higher than those of the market. The level of higher wages is then compensated by an addition of productivity. When this strategy is adopted by the whole of the companies, the market price can rises with the top of the equilibrium price. Imbalance thus created would be then at the origin of an insufficiency of the offer of employment, from where drift an important unemployment.
The arbitration between inflation and unemployment
See also: Curve of Philips
In 1958, Alban William Philips publishes an empirical study on the Great Britain which brings it has to establish a decreasing relation between the unemployment and the variation of the wages.
Replacing the money wages by the Inflation, Paul Samuelson and Robert Solow draw a new curve, that commonly called the Courbe from Philips. It highlights that starting from a certain threshold, when unemployment decreases, inflation accelerates and conversely. This point criticizes where the political authority must make an arbitration between inflation and unemployment is baptized NAIRU ( not accelerating inflation off misses unemployment ).
Milton Friedman and the monetarists sought to show the inexistence of such a long-term arbitration. For Friedman, the individuals end up adapting their reactions to the operations of the government. If this one decides for example to lower the interest rate to start again the activity, it causes new recruitings on the short term, as well as an acceleration of inflation. At the beginning, the workers are easily deceived monetary illusion, but in the medium term they note that them purchasing power dropped and thus require rises of wages, causing the return of unemployment to its initial level.
The new traditional prolonged this analysis while postulating that the economic agents were from now on able to directly anticipate the effect of the policies of revivals on inflation, then requiring immediately rises of wages and thus making these policies ineffective as of the short term.
Some debates on unemployment
Does technological advance destroy employment?
Since at least the destruction of their machines by the luddites, at the beginning of the Industrial revolution, the idea that technological advance destroys employment is commonly allowed. The economic scene tends, however, to prove that it is false. The most traditional critic of this idea was formulated by Alfred Sauvy, in the Machine and Unemployment (1980), where it presents celebrates it thesis known as of “discharge”. After having recalled that, during the two previous centuries, technological advance upset the modes of production and multiplied by ten the productivity without causing the durable increase in unemployment, he insists on the indirect effects of technological advance: the work devoted to the production of the machine; the increase in the sale of the products profiting from progress, thanks to the fall of their price and the mass production; appearance of new consumption or increase in old consumption . From these processes rises what it names “discharge”, i.e. the transfer of the active population of the activities for which the need for labor decreases because of progress towards new activities caused by this same technological advance (manufacture of the machines created by progress, productions new, etc). It is by this process of “discharge” that Alfred Sauvy explains the transformation of the structure of the Active population: the agricultural company became industrial, before being dominated by the Tertiary sector - by causing each time a qualitative transformation of employment, but not their quantitative reduction. Alfred Sauvy postulates finally that the Humanité will always invent new desires which technological advance will fill.
In 1995, Jeremy Rifkin disputed, in its book the End of Work , the argument of discharge in the context of a third industrial revolution whose automation and computerization push gradually with the disappearance of work, even in the tertiary sector. This futuristic thesis is however not without similarity with unfounded concerns of the workmen of the 18th century.
Universalization, source of unemployment in the rich countries?
See also: Social dumping
According to the Theory of the international business, the countries would specialize in the activities which abundantly require the factor of production with which they are best equipped. That of labor for the poor countries, that of capital and know-how in the rich countries. According to Walter Stolper and Paul Samuelson the result of this evolution is to equalize the wages drawn from the same work throughout the world. This could explain the fall of the wages in manufacturing industry in the United States and unemployment in the countries where the wages are rigid with the fall (in France for example).
However if some economists underline the bond between commercial and assembled opening inequalities, many which is those propose a check analysis. According to Paul Krugman, the idea that the rise of unemployment would be related to an unfair competition of the countries with low wages concerns one popular theory of the international business . He explains why the interest of the policies to speak on behalf of such theories is only electoral. He specifies that the majority of the works treating of this subject or the “economic Guerre” are the work of essay writers and not of economists and are sold thanks to their easy theses which feed the imaginary popular one. It is the “pop” theory which neglects all the possible causes of unemployment ( cf supra).
Quotations
There is no more violent means of coercion of the employers against the employees than unemployment| Henri Krasucki
They are propensity to consume and the amount of the new investment which jointly determine the volume of employment and it is the volume of the employment which determines in a single way the level of the real wages and not the reverse| John Maynard Keynes, general Theory of employment, the interest and the currency , 1936
At every moment, all the existing population is always ensured to find work but with wages answering the market rates. There can be permanent unemployment only if one fixes a minimum level of wages higher than the level which would be established spontaneously, which causes to dedicate to permanent unemployment the workmen who will find work only below the fixed minimum| Jacques Rueff, “the insurance unemployment, causes permanent unemployment”, Revue political economy , 1931
Any person is entitled to work, with the free choice of her work, equitable and satisfactory terms of employment and with protection against unemployment| Universal declaration of the Human rights, Article 23,1948
One thought of being able to find the exit of a recession and to increase employment by decreasing the taxes and by increasing the expenditure of the government. I say to you ingenuously that this option does not exist any more, and insofar as it existed forever, that went on each occasion since the war only by injecting an amount of larger inflation in the saving, followed in a higher unemployment rate at the following stage| James Callaghan, speech with the conference of the Workers party (the United Kingdom), September 28th, 1976.
See too
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