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West's Employment Dysfunction

Written by The Daily Bell

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Middle-aged 'missing out on jobs recovery' ... The middle aged are missing out on the jobs recovery with two in three new positions going to those under 35 and the remainder being taken up by the over-50s, figures show. More than 350,000 jobs, 95 per cent of those part-time, have been created in Britain so far this year but it appears that those in their forties and fifties are being bypassed by the boom. In fact workers in the 35-50 age bracket, the largest single age demographic in the workforce, comprising almost 11 million workers, continue to register a rise in unemployment... Two-thirds of the additional jobs created in Britain in 2010 have gone to young people aged under-35 with the other remaining third being filled by those aged over 50. The number of middle aged Britons in work is now 320,000 – that is 2.9 per cent lower than at the start of the recession in spring 2008. – UK Telegraph

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Dominant Social Theme: Life can be unfair.

Free-Market Analysis: Does the West have a free-market? From an investment standpoint, this is obviously an important question. Free-markets generate innovation, entrepreneurship and provide the creativity that keeps societies prospering and moving forward. We return to this question in light of the article excerpted above. A society skewed two-to-one toward youthful employment cannot be a healthy one in our humble view. It tells us that skill and knowledge are not determinant factors but the brute energy and strength of youth. Yes, in modern, Western society, the mature worker has an increasingly rough go – as we can see from this article excerpt in the Australian publication, the Gold Coast Bulletin:

Gold Coast man jobless after 426 attempts ... Malcolm Holt says he's willing to turn his hand to any job in order to pay his way. Despite decades working in senior management roles, the 55-year-old from Surfers Paradise on Queensland's Gold Coast has been rejected after applying for 426 jobs across the nation in 14 months, the Gold Coast Bulletin reports. Mr. Holt is so desperate for work he said he was willing to sweep gutters or work in traffic control in order to pay his way. "Once people see my resume, nobody is going to give me a job as a storeman or packer. "They think I'm far too qualified and experienced. "They don't realise I just want to work and get my pride back."

This is certainly a nightmare scenario. We would argue such reports indicate a larger dysfunction, and one that is not being addressed but is in fact getting worse. The Great Recession of the first decade of the 21st century has been a merciless winnower of employment opportunities – and has likely exacerbated the trend toward younger workers. Unemployment in America, for instance, a country known for a broad array of opportunities, is said to hover close to 20 percent; we think it may be closer to 25 or even 30 percent.

One would think there might be a wholesale reconsideration about how societies are structured and what they offer to their citizens in terms of job longevity and opportunity. Yet the instinct seems simply to restructure what is available. In Europe, austerity is actually reducing benefits and pensions; in America, businesses continue to travel abroad and the manufacturing sector shows no signs of returning to what it once was. Now, we read this from Bloomberg:

U.S. CEOs in Survey Are Most Optimistic Since 2006 ... Optimism among U.S. chief executives in the fourth quarter rose to the highest level since the start of 2006 as business leaders projected increased sales, investment and hiring, a private survey showed. The Business Roundtable's economic outlook index climbed to 101 after falling in the previous quarter for the first time since the beginning of 2009, the Washington-based group said today. Readings higher than 50 coincide with an economic expansion. The gauge, which increased from a third-quarter reading of 86, rose to 102 in the first quarter of 2006.

One might be relieved to see that the business leaders are predicting increased economic expansion. And yet the implication of the article is the virtual collapse of Western economies in 2008 is simply to be ignored. There will be a return to business as usual. This would be too bad. For society to try to ignore what has just occurred is neither feasible nor wise.

Why would the economic collapse of the past two years be ignored? The only reason that comes to mind in our view is that such a collapse was expected and even welcomed. We come to this perverse conclusion because we believe that Western society is dominated by a small group of elite Anglo-American banking families that are working inter-generationally to bring about one-world government.

These families have put in place an economic structure that actually encourages the implosion of business and industry on a regular basis – within the context of nation-states. Using various regulatory and legislative structures, the Anglosphere has created an environment that favors corporatocracy at the expense of the entrepreneur and continually encourages globalism at the expense of nationalism.

We can identify certain factors that skew Western societies in this direction. There are three main tools that have been used: Regulation, taxes and central banking. Regulation is of course an obvious mechanism. Government can pass onerous laws that cost a good deal to fulfill and in doing so put the "little guy" at a disadvantage. The more regulations that are loaded onto industry the higher the barriers-to-entry are raised and the more larger entities tend to dominate at the expense of smaller enterprises.

Taxes, especially complex taxes, take a toll on entrepreneurialism in much the same way as regulation. A complex tax code with high rates favors large business structures that can afford sophisticated accounting that minimizes the impacts while providing a global structure for further efficiency. It is perfectly possible for a modest-sized business competing within a given niche to pay a high tax rate while the much larger multi-national in the same space pays little or no taxes. This obviously weakens the smaller player and tends to winnow out entrepreneurial efforts over time.

The most pernicious instrument of entrepreneurial destruction is the quasi-public central bank. Throughout the world, central banking economies are ubiquitous today; these are often private entities that maintain their privileged position through the color of law. In simplest terms, central banks have acquired the franchise to print money for a given nation-state. Since the Anglo-American axis is responsible for the most part for organizing the modern day economy, it has also coordinated central banking around the world.

Today, central banks tend to inflate (print money) in concert. As they do, a "boom" ensues. Eventually the boom becomes more manic until it can no longer be sustained and economies subside into varying degrees of ruin. As this process is repeated over and over, whole industries collapse and massive business consolidation takes place. Once every 50-100 years, the entire paper-money scheme itself is seen to be insolvent – as it is today – and a wholesale restructuring takes place.

The modern-day central banking economy, when combined with Western "regulatory democracy" mixes up a noxious brew of authoritarian manifestations. Mainly, society itself is configured around very large quasi-statist industrial enterprises. The profile has been called "fascism" or even "socialism" though the "ism" really doesn't matter. The point is that such larger enterprises tend to be very unwieldy and put an emphasis on rote production rather than innovation or flexibility.

In such an environment, people's internal existences are bound to be unsatisfactory because the system in which they work and live is geared toward the destruction of the very culture that they hold dear. Cleverly, the system as constructed makes people participate in their own demise (metaphorically speaking, anyway). The harder people work and the more they participate, the more centralized, authoritarian and dysfunctional the larger nation-state becomes. The better a job people do, the worse it gets.

The public school system in the West is deliberately positioned to produce dumbed-down graduates. Industry in Western countries is so hamstrung by various regulations and tax provisions that those participating are actually helping to make them uncompetitive. Those who work in the public sector are also helping destroy the fabric of the culture that has nurtured their families in the past. The Anglosphere's organization of society has acquired the unwilling cooperation of the citizenry.

In the past, in normal societies, people worked in crafts and trades. Without judicially mandated corporatism, business and industry tended towards flexible partnerships rather than the brutal and inefficient giganticism of multi-national production. The circulation of honest money (gold and silver) would tend to discourage consumerism, while building up savings and self-sufficiency. Municipalities would hold power rather than huge nation-states. Taxes would be low and efficiently administered. Regulations would be virtually non-existent at a municipal level because they would have to be administered by people who would have to justify their existence.

People tend to believe that modern, Western cultures have evolved the way they have naturally. In fact, they have not. It is not normal for societies to have 30 percent unemployment. It is not normal for older people to find that their skills are unmarketable because they have "too much" experience. These deviant experiences are the hallmarks of a central banking economy that values destructive centralization over dynamic entrepreneurship and mindless production over creative profit-seeking problem-solving.

Western elites have promoted the modern economic environment; one that values accounting over production, speculation over investment and paper shuffling over manufacturing. But in the post-Internet society that we believe is developing now, people may gradually rediscover the kind of sensible agrarian republicanism that has been deliberately destroyed in the past 200 years or so. And in doing so rediscover their own independence.

Conclusion: Living in a world where one's utility is deponent to one's youth and one's experience is actually a drawback is neither healthy nor professionally sustainable. There is, in fact, a reason for the way things are – and reasons as well to believe that things can change, ultimately, for the better.

The Daily Bell

© Copyright 2008 - 2010 Appenzeller Business Press AG (ARBP). All Rights Reserved. The Daily Bell is an informative compendium of independent economic views and analysis, which is published by ARBP.

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