Americans Want to Believe Jobs Are the Solution to Poverty. They’re Not

> Thus in the not too remote future, the rate of interest would have to be negative and income tax would have to be replaced by an income subsidy.

Interesting. We definitely have negative interest rates in some places by now. Now waiting for the income subsidy.

Both article and (so far) HN comments manage to avoid the phrase Protestant Work Ethic. The Protestant Work Ethic is a belief that work itself is inherently a good idea, usually because it is in some sense desirable by God, but this idea has outlasted mainstream confidence in the Protestant idea of a personal God.

If you reject the PWE then very different possibilities emerge and in particular "full employment" stops looking like a good public policy goal and start looking like you're just trying to waste as much of people's time as possible.

That's cool, you can do whatever you want, but you may want to re-think that plan. If you study history you'll find loads of examples of both individuals and civilizations that fell because they acted in a way that caused a significant cost to others without thinking of the consequences.

Assuming the natural resources you might want to exploit are living beings, you have to maintain an equilibrium in the environment or you can get resource starvation, which then impacts you directly, either as increased costs or an end to the goods entirely. You can easily see this in things like elephant/rhino poaching, where the unregulated demand will eventually result in no more supply at all. Even slavery requires considering the costs of maintaining the slaves, as if the slaves deteriorate, they won't be as productive, and it will cost you more to acquire new ones. Or if you attempt to take over some new lands, but your diseases wipe out the native population, now you don't have the natives to use as slaves anymore.

In respect to the American economy today, inequality and exploitation can lead to several problems. 1) Lack of skilled workers, 2) ballooning health care prices and increased taxes, 3) political unrest leading to trade problems, not to mention limited business growth, 4) overthrow of government, 5) state taking over commercial entities, 6) economic collapse , 7) massive refugee crisis. Oh wait, that's Venezuela. For us it's just the first few.

No matter what, you will eventually have to consider the costs to others if you want to acquire unlimited resources.

Yes, there's frictional unemployment. How much, though?

This may differ by country, but you typically only show up in the numbers if you were fired. After all, if you quit your job, you aren't involuntarily unemployed, which is what the numbers are supposed to measure.

How often do people get fired? I remember reading numbers of every 20 years on average (don't have the source handy, I'm afraid), but let's call it every 10 years to make it conservative.

In a situation of true full employment, with a plethora of employers looking for employees, at least low to medium skill workers should be able to find a new job basically immediately -- within a week perhaps. Let's be conservative again and call it two months.

This means people are unemployed for two months every 10 years on average, which translates to ~1.7% frictional unemployment. That's way less than the 5% number you cite.

In fact, several industrialized nations saw unemployment rates below 1% for some time between the Second World War and the 1970s. In other words, achieving well below 2% unemployment rate is absolutely realistic.

If you convert the delta to the 5% number you cite to the US workforce, you get about 5 million people. 5 million people who are suffering simply due to political ideology.

On a more political level, I think it's important to keep in mind that the current situation (where people misleadingly talk about full employment even for unemployment rates much higher than 2%) is very beneficial to employers, because it greatly strengthens their bargaining position. Now add the fact that the majority of funding for economics think tanks is aligned with employer interests, and it's clear why the public discourse may be somewhat skewed and biased towards accepting inhumanely high rates of unemployment.

I'll call you inhumane then. Despite record employment levels and rising average net worth in the USA, millions of people are still starving and struggling with drug addictions and so on.

Averages and generalizations only tell a portion of the story. Anecdotes can shed light on "noise".