Unemployed, But Not Out Of Work

The Bureau of Labor Statistics reported this morning that a net 701,000 Americans lost their jobs during the month of March.  This figure likely greatly understates the true numbers since most of the survey was conducted before the wave of business closures late in the month, as indicated by unemployment claims numbering in the millions.

CBS News aired a report today featuring a Georgia farmer worried about losing his crops.  If the crops aren’t picked on time, they will be lost.  The reason they may go unpicked was a shortage of workers.  Seems border closings limit the supply of laborers from Central America.  There are also widespread reports of mass hiring by grocery stores and delivery services as more consumers choose to prepare meals at home and have necessities delivered.

Apparently a large number of workers are looking for work at the same time that vital work risks going undone.  This suggests that a sizable portion of the unemployment problem isn’t a fundamental shortage of work, but our economy’s failure to efficiently match workers to employers.  

Meanwhile if this work doesn’t get done, there is a real risk of starvation in the midst of plenty.  The government can rain money all it wants, but if no one picks the crops or distributes the groceries no one will eat, either.

The farmer was asked why not hire Americans?  He replied that, unfortunately, it was hard work that most Americans didn’t want to do.  If so, we can only conclude that a large part of the unemployment problem is voluntary.  

If they truly want to solve the unemployment problem, figuring out why people would rather not take available jobs needs to be taken into account by policymakers.

6 thoughts on “Unemployed, But Not Out Of Work

  1. cb says:

    I would ask the farmer: How much do you currently pay a crop picker for a typical days work, and what is a typical days work, hours and production.

    Then: The question that needs to be answered is: At what price would an American that needs work, be willing to do that job.

    There after: The farmers needs to step up and pay that price. If that price is not sustainable, or doable, or to risky for the farmer, then the bailout /risk mitigation/”stimulus” actions currently being taken to bail out the current speculator/stockholder/investor class should be directed through producers/farmers to workers with money for labor, AND a % of the profits, if any, going back to the taxpayer.

    It appears we need to do some restructuring within our society.

    1. Bill Terrell says:

      Good points, cb. Perhaps the farmer does need to pay more. But it also has to be put in the bigger context … the farmer is but one link in the supply chain. Ultimately how much the farmer can pay is determined by how much the final consumer is willing to pay. Food production isn’t a high margin business. If the farmer is to pay more, the consumer will too.

      At the other end if the chain, we also have to consider whether we’ve created a spoiled workforce. Did government programs to make college “more affordable” entice too many young people into low value added degrees? Maybe we needed more farm workers and less psych majors. Or for that matter code writers … did we really need like 3.5 million smart phone apps more than we needed people to grow and harvest our food supply? Are we, through a patchwork of government programs from disability to unemployment, paying too many people to not work?

      I don’t know, but I do know somebody has to grow the food, and if student debt loads are any indication, there are more than a few grads who weren’t really college material. And that if somebody doesn’t grow the food, people will starve no matter how much money they have.

  2. Steve says:

    “The farmer was asked why not hire Americans? He replied that, unfortunately, it was hard work that most Americans didn’t want to do. If so, we can only conclude that a large part of the unemployment problem is voluntary. ”
    I think the issue is more logistical, awareness based and the suddenness of the need. Here in the UK, the same argument was made by farmers re: labour shortages and crops not getting picked. However after a well publicised recruitment campaign, April and May jobs crop picking jobs are fully subscribed with both native and local migrant labour taking on the jobs disproving the whole “British” people are too lazy to do the jobs theme. It’s possible that the UK being more densely populated allows people to move into those jobs without having to move house. I’m just guessing. In the US can distance to the farms be a problem? Or maybe it will turn out that the crops will get picked after all once people realise there are opportunities to work in the sector.

    1. Bill Terrell says:

      Thanks for the comments, Steve. Distance is undoubtedly a factor. But that would also apply to workers imported from abroad. And we could also look at it as subordinate to the pay issue. There is some level of pay that would be sufficient to attract even domestic labor to travel, although it might have to be pretty high in light of policies designed to pay people not to work. My point is simply that such policies have costs as well as benefits … carried far enough it’s not beyond imagination that everyone could have plenty of money but nothing to eat. In any case, it’s clear that government programs can rigidify an economy, and that that needs to be taken into consideration when formulating policy.

      Awareness is likely an issue too. Reports like these have only just surfaced in the mass media. It’s just one instance, but a friend has said she’d take such a job if she lost her current one.

      It cuts both ways. As I’ve argued in previous posts, government actions as a whole have widened, not narrowed, the disparity between rich and poor. Here in the US, the Federal Reserve has expressly adopted a policy of lowering interest rates to raise asset prices. As the wealthy are by definition the owners of most of the assets, this pursuit of a “wealth effect” is an act of playing reverse Robin Hood. And recently passed “stimulus” measures disproportionately benefit the financial elite. Instead of $500B for direct payments to citizens and $1700B for corporations and businesses, it would have been much more effective for all of it to have gone directly to individuals. That money would have found its way into businesses anyway, but the people would have decided how to allocate it on the basis of how much they valued their services, not their political influence.

      I hope you and yours in the UK stay well!

  3. Steve says:

    Yes we’re all well here. Thanks for asking. I hope you are doing fine on your side of the pond. We’re very fortunate where we live in Wales. It’s a small town of about 4000 people and I’m happy to report that the 2 stores and local butcher’s are booming (the butcher said turnover was up 3x!) during these strange times and health wise everyone is fine.
    I totally agree the money should have been mailed directly to everyone equally It’s quite amazing because if they did mail out money then some companies may actually become deservedly profitable and their stock prices would go up anyway. Or it would set a new business on its way.
    They must know this- so is it just corruption or do they think they’re genuinely doing the right thing? It’s possible that this seemingly “free” money may be distributed more equitably in future crises now that it’s become more common knowledge (in no small part because of websites like this) that the Central Bankers can just make money appear or buy trillions of dollars of debt with a key stroke. But in the UK they still seem to want to offer short term “loans” to small businesses while buying the debt of barely profitable big businesses which is nuts when we know that excess debt got us to this point in the first place.

    1. Bill Terrell says:

      Considering the distance, the parallel is striking between your small town in Wales and mine in Pennsylvania. It’s quieter than usual and people aren’t going out as much, but otherwise not all that different than last year at this time. The local grocery is bustling and the pizza place down the street remains open, much to my relief…

      I’ve often wondered too just how much of the absurd policy we see is ignorance and how much driven by an ulterior agenda. Surely these people are too smart not to have at least some inkling how damaging their policies are for the welfare of the average citizen and the long term health of the economy as a whole. On the other hand, we can’t directly observe thought processes and motives, so mostly we just try and deal with what we can observe.

      We could complain about the inevitable macro inflationary effect of money printing. The Fed says it wants to have inflation in order to prevent deflation. Putting aside the highly questionable logic behind that, and just accepting that it’s going to print money, we still have the matter of how it’s going to get it into circulation. Is pumping it into the circuits of high finance the only way? Not hardly. When it decides it’s going to water the monetary garden from the roots up, say by distributing its zero cost money democratically in equal amounts to every citizen, then maybe I’ll be convinced that all it wants is to depreciate the currency, and not redistribute wealth to an elite constituency.