# Solving the Unemployment Problem

written by Pj on Thursday January 10th, 2013 -- 1:45 p.m.

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It occurred to me the other day that solving unemployment is trivially easy.

My mother has a job at a factory, and over the past few months has rarely had a weekend off.  Who wants to work 7 days a week? I'll tell you who: People who don't want to lose their job.  That's the only reason they don't all tell the company to go fuck themselves.

So what's our unemployment rate at, currently? Like 8% or so? That's almost nothing.

Let's just make it illegal for employers to require employees to work more than 40 hours a week.  Suddenly these companies who are forcing their employees to work 56 hours a week need 40% more employees to get the same amount of work done.  Problem solved!

Well, maybe.  It depends on how many of these companies exists, but I suspect it isn't too few.  If 1 in 5 employees are being forced to work like this, that completely eliminates unemployment as it will take all of the currently unemployed to make up the difference.  However, 1 in 5 seems like a high estimate.

If it's less, we can just reduce the limit further.  Make it 32 hours a week so everyone works 4 days and gets 3 days off.  Hell, let's do that even if it makes the unemployment rate negative.  I guarantee it'd still be a good thing, even to those who say "but I wouldn't be able to pay my bills on only 32 hours of pay per week."

The reason: Employers don't much have to compete on salary because jobs are in far more demand than employees are.  If you reverse the situation, then suddenly employers have to pay their employees more, otherwise they won't have employees.  The newspapers will be full of legitimate job postings and anyone who is only making minimum wage won't have any trouble at all finding higher pay elsewhere.

Indeed, I wonder if this isn't the source of the wealth disparity in the U.S.  Rich people can't become rich without the poor giving them their money one way or another, and so the question is; when are we giving them our money? One way we're probably doing so is by accepting less pay than we are worth.  If an employee accepts \$9 an hour when they're worth \$10 an hour, and an employer has ten employees, that employer gets a whole salary without doing any of the work for it.  So it's easy to understand why your boss always makes twice what you do despite doing his best to do less work than you do.  Do the same at a company with thousands of employees and its easy to have a CEO who makes a hundred times what the lowest-paid employees make.

However, if we create a situation where employees are in demand, all of this changes.  Every little bit the CEO tries to skim off the payroll makes it harder to find employees, which increases HR costs at best, and makes it more likely that the employees that are found are genuinely worth less.  Any company that doesn't pay its employees fairly would be ensuring its own demise.

To have people working seven days a week, when they don't want to, and when others are working zero days a week, is just dumb.  However, it's what companies like to do.  They save money on training costs since they get more work per unit of training effort, and it certainly helps them out when negotiating salaries when they can point to a huge stack of applications and say "we can replace you easily" whereas, if they actually hired all of those people so they didn't have to force their current employees to work overtime, then that stack of applications wouldn't exist.