This article presents a very simple idea which will eliminate unemployment. It will bring power to the people. It will significantly increase workers' salaries. It will bring justice and growth to the economy. People know nothing about this idea because the rich hide it from the public.
The owners of corporations favour unemployment because the unemployed workers are pressured to accept poorly paid jobs to feed their families. A higher unemployment rate produces cheaper labour. The owners of corporations are capable of generating unemployment by influencing the economic policy from importing labour to rising interest rates. It seems that an unemployment rate of about 5% is very convenient for employers and economists have accepted it as a "normal" state. This "normal" state allows the exploitation of workers through low labour costs, while the total workers' purchasing power is still large enough to produce profits for private companies.
Today's economy recognizes cyclical, frictional, and structural unemployment. Cyclical unemployment is the result of oscillations in the process of expansion and recession of production, which oscillates demand for work. Some economists realize that the burden of crisis and benefits from profits should be more equally distributed between employers and employees, but they do not know how to implement it.
Frictional unemployment is the result of people willing to move between jobs, careers and locations. Structural unemployment is the consequence of a change in technology, which results in the absence of demand for available workers. These kinds of unemployment are invented by scientists to give students something to learn and are not worth mentioning. Economists today are so indoctrinated with the false teaching that they believe unemployment is the unavoidable price, which must be paid for technological development. They even believe that 0% of unemployment is not a positive thing. I want to stress here that 0% unemployment will solve most of the existing economic problems.
The current philosophy of economics protects capital as the main requirement for the protection of individual economic rights and of society. This is wrong. We need to base the philosophy of economics primarily on equal human rights because people are the main purpose of the economy and are the subjects that the economy cannot exist without. Besides, equal human rights are the condition for creating a good society. This is the foundation of my philosophy.
Society regulates freedom if such freedom endangers people. The stronger has no right to endanger the weaker, and if so, the stronger will be legally punished. Can you imagine what life would be like without law governing the rights and obligations of citizens? But there is no such law in the free market economy. A stronger producer might suppress a weaker from the market and thus endanger their survival. If we have adopted laws that prevent a stronger to threaten a weaker in daily life, we need to protect the weaker in the economy as well. But we don't, and this is the reason our society deteriorates.
The unemployment of workers cannot form a healthy basis for a good society. A just society requires the availability of work to everyone. If job creation is not needed, full employment will be achieved by reducing the work hours proportionally to the unemployment rate. This is a political measure which needs to be accepted by people and must be enforced in both the public and private enterprises. The regulation of working hours will produce full employment and create a much better economy.
The shortening of working hours will reduce employees' salaries proportionally to the reduction of working hours. For example, an unemployment rate of 10% will shorten the working hours of all workers by 10% and the workers' wages would decrease by 10%. This 10% of the money the companies take from employed workers will be distributed to the newly hired workers. Initially, the full employment will not burden employers with additional labor costs, and all workers would get employed and receive incomes. The previously employed workers would probably perceive the lower wages as a disadvantage, but in the long run, their salaries will significantly grow because in the reduced work market the employers will be forced to increase workers' salaries to be able to keep them.
The shortening of working hours will bring great benefits to society. The lower salaries of workers caused by the elimination of unemployment are not even close as bad as what unemployment brings to workers who receive no salary. Such a measure would guarantee that unemployment and economic insecurity of workers can no longer exist.
People are accustomed to fluctuations in living standards depending on the performance of the economy. The real purchasing power of wages changes more than the unemployment rate due to changes in the market supply and demand, economic crisis, inflation and deflation. Workers silently accept such fluctuations in purchasing power. They accept that they live worse through the crisis. So, why would they not accept this measure in the name of solidarity among workers, which will help them establish a healthy long-term basis to achieve higher standards of living?
Shortening work hours proportionally to the rate of unemployment will not only eliminate unemployment, but it will also solve the problem of exploitation. Here is a simple explanation: If there are a total of two workers who apply for a total of one work post, the competition among the workers will reduce the cost of labor so that the worker who gets the job will be exploited. If there is a total of one worker and a total of two jobs, the competition among employers will increase the wage of the worker. Regarding this, the reduction of work hours proportionally to the rate of unemployment will put workers in a better position in the production process. Lower availability of workers will raise the value of the labor of workers and thus, employers would pay workers more than they do today.
Access to the free market is a privilege that society gives to companies, and the companies must pay for this privilege in a way that satisfies society. Increasing the wages of workers will be at the expense of employers. Employers would not like it at the beginning of course, but later they will profit from higher earnings of workers.
Employers must understand that they cannot earn more if there is not a greater consumer purchasing power. They must understand that the purchasing power of society cannot be increased without increasing the wages of workers. They should understand that there is not a better distribution of incomes, neither for employers nor for workers than of the one achieved through a fair labor market.