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Hysteresis: The New European Disease Of Permanent Unemployment

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Hysteresis: the new European disease of permanent unemployment

For the younger generation this appears a real possibility, although I'm sure there are some areas of the UK where generations have become permanently unemployed and will logically be the better economic choice.

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This is true....there are more people than paid jobs, even pin money jobs.....plenty of work to do, but not the money to pay for it......can't afford a cleaner so clean, can't afford a decorator so decorate, can't afford a chef so cook, can't afford a child minder so mind children and old people etc......no money ever passes hands but still a full time job......then find out there is no pension.....

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What is the point of this article when they don't even mention labour taxes and regulation and the effect on the labour market. The economics profession, at least as presented by the media, confines itself to one possible solution to every problem: asset price increases. This is nonsense. If you tax labour, then you increase unemployment. Jobs that were marginally profitable become unprofitable. I have a house in a small village in France. Half the village is unemployed, and the village is also falling down do to lack of maintenance, but if you try to hire someone to do any work, the taxes they have to pay double the cost of hiring them. Not surprisingly, they remain unemployed and the village continues to decay (not helped by bored, frustrated young people going on vandalism sprees).

The tax basis for funding the European welfare state (high labour taxes) is fundamentally flawed and we are seeing the results. This has nothing to do with secular stagnation or too-high real interest rates. It's an over-taxed, over-regulated labour market and a tax system designed to favour property-owning rentiers.

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Youth unemployment is high all over Europe ....... Boredom, disenchanted and resigned youth....seen them smoking dope together, drinking together.....no job, no transport...no hope.......what the Syrian refugees will do for work is anyone's question?

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Hysteresis? Thought that was something to do with stretchyness

Two things, firstly why do we have contributions from richc and RichB but Richard A has nothing on-topic to offer?

Secondly, this:

strain_33.gif

When an economists says hysteresis it sits over something that they've observed but don't understand, and which they don't understand why it happens sometimes and not other times and to differing extents.

When a material scientists says hysteresis they do so in a context where they have a model that explains not only the effect but also other unrelated effects and also probably made novel predictions which were correct. The phenomenon turns up time and again, in exactly the same way, to the same extent.

Economists should be required by law to not borrow the language of the physical sciences. This should be called RFC (Recession F**ked Cohort) honouring the useful contribution that econometricians have made which is to notice that to a lesser or greater extent, depending on the recession, hitting the beginning of your working life as a recession bites will f**k the cohort over on a permanent basis.

Still at least they don't suffer in vain; we've reformed the financial sector who made this mess and house prices are back in line with incomes...

Edited by Bland Unsight

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This is true....there are more people than paid jobs

Any sensible society would use that to say "Great, we don't need to work as hard any more!" The fact that this is even a problem shows how completely bonkers we are.

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Minimum wages too high, cost of living too high.

Attack the latter and you don't need the former.

Really, given we're minted as a society, you shouldn't need much moolah to get by.

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Minimum wages too high, cost of living too high.

Attack the latter and you don't need the former.

Really, given we're minted as a society, you shouldn't need much moolah to get by.

Absolutely...... Refuse to pay the price they ask.....high prices are the problem not low wages.

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Minimum wages too high, cost of living too high.

Attack the latter and you don't need the former.

Really, given we're minted as a society, you shouldn't need much moolah to get by.

The minimum wage is irrelevant when the cost of employing someone is more than doubled by the tax burden.

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What is the point of this article when they don't even mention labour taxes and regulation and the effect on the labour market. The economics profession, at least as presented by the media, confines itself to one possible solution to every problem: asset price increases. This is nonsense. If you tax labour, then you increase unemployment. Jobs that were marginally profitable become unprofitable. I have a house in a small village in France. Half the village is unemployed, and the village is also falling down do to lack of maintenance, but if you try to hire someone to do any work, the taxes they have to pay double the cost of hiring them. Not surprisingly, they remain unemployed and the village continues to decay (not helped by bored, frustrated young people going on vandalism sprees).

The tax basis for funding the European welfare state (high labour taxes) is fundamentally flawed and we are seeing the results. This has nothing to do with secular stagnation or too-high real interest rates. It's an over-taxed, over-regulated labour market and a tax system designed to favour property-owning rentiers.

+1000

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Economists should be required by law to not borrow the language of the physical sciences

Not just economists.

Didn't read it, but assume they are talking about what used to be called pulling on an elastic band. Growth doesn't seem to reduce long term unemployment, until it (growth) is so great as to be unsustainable.

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Any sensible society would use that to say "Great, we don't need to work as hard any more!" The fact that this is even a problem shows how completely bonkers we are.

Even more bonkers is to have a society that devotes a significant amount of it's resources, time and effort toward creating labour saving technology while at the same time persecuting people without jobs. :lol:

Surely a high level of unemployment should be seen as a sign of progress? Why isn't productivity measured in terms of the number of people whose labour is no longer required?

Politicians should be boasting about how many jobs they have eliminated as their nation has become ever more productive and efficient by reducing the need for labour.

It's bizarre that we practically worship labour saving innovation but despise the people whose labour has been dispensed with because of it.

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Even more bonkers is to have a society that devotes a significant amount of it's resources, time and effort toward creating labour saving technology while at the same time persecuting people without jobs. :lol:

Surely a high level of unemployment should be seen as a sign of progress? Why isn't productivity measured in terms of the number of people whose labour is no longer required?

Politicians should be boasting about how many jobs they have eliminated as their nation has become ever more productive and efficient by reducing the need for labour.

It's bizarre that we practically worship labour saving innovation but despise the people whose labour has been dispensed with because of it.

If 1 man produces 1 widget & becomes unemployed you lose 1 widget of output.

If 1 man produces 100 widgets (due to productivity/innovation) & becomes unemployed you lose 100 widgets of output.

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Youth unemployment is high all over Europe ....... Boredom, disenchanted and resigned youth....seen them smoking dope together, drinking together.....no job, no transport...no hope.......what the Syrian refugees will do for work is anyone's question?

Mostly down to being locked into an uncompetitive currency union with germany who have a bonkers view of demand.

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Nobody wants jobs, at least I don't. The wages oh yes that's a different story. If machines do everything that's fine with me so long as I still get money.

To many traditionalists I just said something against their religion...

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Hysteresis: the new European disease of permanent unemployment

For the younger generation this appears a real possibility, although I'm sure there are some areas of the UK where generations have become permanently unemployed and will logically be the better economic choice.

and why, pray tell, do we have unemployment????

if you try to micro-manage everything, then people just vote with their feet and feck off somewhere they can get a bit of freedom.

the people with the money and the knowhow feck off, you lose your innovation/industrial base...causing lack of business,growth and unemployment

..and then, the politicians in power, love power so much they will then do the following to save face,rather than admit their schemes don't work

1) lie

2)lie then bully/propogandise/demonise those who don't share the view of "the enlightened leaders"

3)turn violent against the citizenry to keep them in line-

no 3) is a peach.......they want to be seen as saviours, so will not overtly do the dirty deeds, but will do it by proxy, in this case it's islam....who are being used as cannon fodder to destroy the "heretics", council of trent stylee.

..the other jesuit arm is responsible for the "compassionate" immigration,poisoning of your food supply via hormones/contraceptives etc,via the corporate systems they control...as this can be done by stealth.(the classic illusionists trick being done skillfully by the media,focussing all of your attention on ISIS)

just like nazi germany ,eastern europe,and mother russia experienced.

it's textbook stuff.

and the EU has been the whole shabang of power mad politicians with an idealogical obsession,disdain for the little folks,and stifling over-regulation and intrusion.

that's why we must leave....these people are'nt just obsessed, they are f@cking dangerous.

the solution to EU problems is not MORE europe at all, it needs to do a lot less,a lot better.

sadly, that is not the mindset of the people running it.

most of them are catholic/jesuit trained from school and university.

almost from birth, they are indoctrinated with "guilty" of everything from the beginning....and so will breed a culture to suit if given too much power....hence mass surveillance etc.

now before any catholics get the hump with me, I wold like to point out there were one or two popes who were actually fairly decent,who got on the wrong side of them,much to their detriment.

Same with US presidents like JFK..decent guy but would not play ball..and ron reagan..the best president the US never had.

but you will have to agree,that is how you were brought up....original sin and all that.

Edited by oracle

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and why, pray tell, do we have unemployment????

Because we're efficient and organised enough to not require that many people to do all the stuff we want to do. Being from a society of morons though that's a problem, particularly when we keep trying to go further down that path. Either ditch the efficiency if people like doing the jobs anyway, or embrace the fact that we should all be able to have more leisure time (or probably best a bit of both). But no, we'll continue f***ing up the world and pretend we're making it better because we're idiots.

if you try to micro-manage everything, then people just vote with their feet and feck off somewhere they can get a bit of freedom.

the people with the money and the knowhow feck off, you lose your innovation/industrial base...causing lack of business,growth and unemployment

Yet life goes on - most of it is clearly a waste of time, and the obsession with "growth" utterly ludicrous.

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Nobody wants jobs, at least I don't. The wages oh yes that's a different story. If machines do everything that's fine with me so long as I still get money.

To many traditionalists I just said something against their religion...

I don't want a job, but that's another reason why I really don't like subsidising those who work less than I do.

Bring on the post scarcity economy!

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