why do we have unemployment?
... just as the State has no money of its own, so it has no power of its own - Albert Jay Nock
Clayton says no unemployment in a free market.
I said no such thing.
Clayton -
Here's my 2cents on the original question.
http://mickanomics.blogspot.co.uk/2013/03/economists-prove-that-earth-is-flat.html
What Went Wrong with Economics
Actually, the question should be inverted. Why do we have employment?
Having job means to sacrifice one's leisure time, where one could be doing whatever was in his possible range of options, to do some specific task.
And this is usually done in exchange for payments that increase or maintain the range of possibilities of consumption.
But it can also be done to acquire skills or respect or status or power or any other indirect gains from having an occupation.
The concept of full-employment is deceitful. It is a practical impossibility to be fully employed, meaning that everybody has a point where the tradeoff between longer hours and getting paid more is no longer viable, if anything due to the law of diminishing returns.
And somebody will remain unemployed if he cannot find opportunities where the proposed trade-off is acceptable.
This might happen because he is already wealthy or has little ambitions that can be attained by a regular job.
Or this might happen because he's waiting better opportunities that might appear.
Or this might happen because he is so unskilled or unstable that nobody is willing or able to offer him any employment opportunity and he is not able to generate income by himself.
Often this happens because the minimum wage law set the bar too high for unskilled labor.
ToxicAssets: why do we have unemployment? Actually, the question should be inverted. Why do we have employment? Having job means to sacrifice one's leisure time, where one could be doing whatever was in his possible range of options, to do some specific task. And this is usually done in exchange for payments that increase or maintain the range of possibilities of consumption. But it can also be done to acquire skills or respect or status or power or any other indirect gains from having an occupation. The concept of full-employment is deceitful. It is a practical impossibility to be fully employed, meaning that everybody has a point where the tradeoff between longer hours and getting paid more is no longer viable, if anything due to the law of diminishing returns. And somebody will remain unemployed if he cannot find opportunities where the proposed trade-off is acceptable. This might happen because he is already wealthy or has little ambitions that can be attained by a regular job. Or this might happen because he's waiting better opportunities that might appear. Or this might happen because he is so unskilled or unstable that nobody is willing or able to offer him any employment opportunity and he is not able to generate income by himself. Often this happens because the minimum wage law set the bar too high for unskilled labor.
Wrong. You don't automatically have leisure time. You work because you need to survive. Either you hunt and gather your own food or you perform some other function at least as valuable and buy your subsistence. Your standard of living is increased when your productivity increases where you can afford to have leisure time.