Monthly Archives: February 2023

The Paradox of Education for Employment

One of the first to remark upon the fact that unemployment could well develop into a permanent feature of contemporary (and future) societies was John Maynard Keynes (1883-1946). The British economist, in his essay, “Economic Possibilities for Our Grandchildren” (Keynes, 1931), argued that technological unemployment might become a permanent feature of modern economic systems of production, distribution and consumption. Keynes was among the first to coin the term <technological unemployment>. His prediction was that replacement of human labor with machines and automated processes would not merely create temporary dislocation. It would permanently exclude a significant proportion of the population from the labor market altogether. This prediction was made well before the development of computers, artificial intelligence, industrial robots and the Internet. The counter argument to Keynes’ view, of course, is that introduction of new technology dislocates human labor, but does not exclude it. Blacksmiths, ferriers and wainwrights have all but vanished, but now we have steel workers, tire repairers and car manufacturers. What will the future bring? Surely something. We simply cannot foresee the new jobs, at the moment, but they will emerge in due time. This optimistic view has not been warranted by developments in OECD countries in the first 20 years of the 21st century. From 2001 to 2021, the unemployment rate for all OECD countries has stayed within the range of 5.6% to 8.3%, with the current rate (2021) at 6.8%. Of the employed, about one-third (33%) are long-term unemployed (those unemployed for at least 12 months).

“Employment rates are defined as a measure of the extent to which available labour [sic] resources (people available to work) are being used. They are calculated as the ratio of the employed to the working age population. Employment rates are sensitive to the economic cycle, but in the longer term they are significantly affected by governments’ higher education and income support policies and by policies that facilitate employment of women and disadvantaged groups. Employed people are those aged 15 or over who report that they have worked in gainful employment for at least one hour in the previous week or who had a job but were absent from work during the reference week. The working age population refers to people aged 15 to 64. This indicator is seasonally adjusted, and it is measured in terms of thousand persons aged 15 and over; and in numbers of employed persons aged 15 to 64 as a percentage of working age population.” OECD (2021): Employment Rate (Indicator). doi: 10.1787/1de68a9b-en Retrieved 25 Feb 2023.

In the calculations of the OECD, people are deemed to be employed if they work one hour in a two-week period, and much of the work available is casual, on-call, part-time employment, especially for younger workers. Casual, on-call, part-time work is underemployment, and from such employment, no livable income is possible to achieve. Added to the casualization of work and less than livable incomes has been the unemployment caused by the Global Financial Crisis of 2008 and the ongoing COVID-19 pandemic (beginning in late 2019).

The unemployed and the underemployed comprise labor that is surplus to requirements. Surplus labor is caused by downturns in business (decrease in demand for goods and services), by adopting business models which intentionally use underemployment and by replacing human labor with automated systems and computer-controlled machinery in the activities of production and distribution of goods and services. Employment of surplus labor cannot be achieved by education. Surplus labor becomes employed through the creation of additional jobs, either by

  • new investment to expand current business or to create new enterprises in the production and distribution of goods and services, or
  • restructuring the labor market and thereby reducing the work hours per day performed by an individual and employing additional individuals, or retiring the employed at an earlier age, say, at 50 or 55 instead of 60 or 65, or hiring individuals at a later age, say 20 or 21 instead of 15 or 16.

Surplus labor is not a problem that education can solve. Occupational (vocational, technical and professional) education can help develop the ranges of knowing which are in demand in an economic system, but education cannot create new jobs nor can it restructure working conditions such that there are increases, decreases or redistributions of the number of employees required by an economic system.

If sufficient goods and services are continuously available for the needs and demands of a society and if, as well, there is unemployment and/or underemployment, this situation indicates that the unemployed and underemployed are surplus labor. They are not needed for production and distribution. They are freed from the necessity to contribute to the production and distribution of requisite goods and services. They have freedom from work.

In such a situation, where labor supply exceeds labor demand, there is nothing inherently wrong with unemployment. It is only a problem if three conditions accompany it (and they usually do):

  • no income, or below livable income, for the unemployed and the underemployed,
  • the insistence by governments and their supporters that the unemployed have an obligation to work and should continuously seek employment (even when there is no work available) and
  • the view that the unemployed are out of work, not because they are labor surplus to requirements, but because they are lazy, and they therefore are deserving of their poverty because of their idleness.

The first difficulty, no income, or below livable income, for the unemployed and underemployed, is not an educational problem. Resolution of the problem requires political and economic action, not occupational (vocational, technical and professional) educational programs. The problem can be resolved through the establishment of consumer democracy. Consumer democracy is a system of distributive justice in which there is provision of a livable income that assures access to the necessities of modern life – decent housing, pure water supply, adequate diet, suitable clothing, sufficient power supply, appropriate medical and dental care, efficient means of communication, reliable and convenient transport, sound schooling, readily accessible information that is accurate and truthful and good quality recreation and entertainment. Such a system requires that existing unemployment benefits, social security payments and pensions for the aged, disadvantaged and disabled be extended into a system of a guaranteed personal livable income for all members of society. Such an income is not only desirable. It is an economic and social necessity for fairness in a society with chronic technological unemployment (see A. Lowrey, 2018, Give People Money. New York: Crown Publishing Group; J. Quiggin et al., 2020, “Meet the Liveable Guarantee: A Budget-Ready Proposal That Would Prevent Unemployment Benefits Falling Off a Cliff.” The University of Queensland. School of Economics. Retrieved 25 Feb 2023).

The second difficulty, the insistence by governments and their supporters that the unemployed have an obligation to seek jobs continuously in an economic system that does not have enough jobs to go around, is again not an educational problem. The problem can be resolved by simply acknowledging that there is surplus labor and that it is inherently unfair to maintain the obligation of everyone to work without maintaining, with equal diligence, the right of everyone to work and the provision of a job for everyone. The obligation to work, the right to work and the provision of a job to perform must be extant to satisfy the conditions of fairness and justice. If governments and their supporters insist that 100 per cent employment is imperative, then the employment opportunities must be restructured such that they are evenly and equally divided. With equal apportionment of employment, everyone works, but naturally everyone works fewer hours per week, or fewer weeks per month, or fewer months per year, or everyone works fewer years in a lifetime (for example, we begin work at a later age and/or take retirement at an earlier age, with an adequate provision for a livable retirement income). If everyone works, then everyone works fewer hours, thus, again to be fair, wages must be increased to assure that everyone is earning a livable income even though they are working fewer hours per week, month or year, or fewer years in a working lifetime. This rearrangement of the structure of work, along with the adjustment of wages to assure a livable income, assures distributive justice, through provision of a livable income for all, and productive justice, with each of us bearing a fair share of the labor burden.

While the first two difficulties of unemployment (inadequate income without employment and obligation to work where there is no work available) are resolvable through political and economic action, the third challenge associated with unemployment (the view that the unemployed are unemployed because of their laziness and therefore they are deserving of their poverty) is resolvable through education. Through education, we can develop an understanding of how economic systems function, how demand for labor supply fluctuates and how unemployment arises, not from individual idleness, lack of ambition or moral inadequacies, but from surplus labor. Through education, we can also consider what constitutes a worthwhile life that is not predicated on wage for labor, fee for service or product for payment, but rather a life that is predicated upon how well we treat and develop ourselves as mindful human beings and how well we treat other members of our society as fellow human beings deserving of dignity, respect and self-determination.