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NATIONAL
JOBS FOR ALL COALITION
UNCOMMON SENSE
2 ©Revised August 1995
UNEMPLOYMENT
MEANS LOST OUTPUT
AND HUMAN DEFICITS
By Helen Ginsburg, Professor of
Economics, Brooklyn College of the City of New York and Executive
Committee, National Jobs for All Coalition
Unemployment adds to the federal deficit,* and to the already
oversized
human deficit. And, although it is hardly ever mentioned, unemployment
also
means a tremendous loss of potential output. In plain language,
jobless
workers and unused capacity do not turn out goods and services
that could
be used to raise living standards. Houses that are not built,
urban transit
systems that are not produced, and child-, health-, and eldercare
workers
who are fired or not hired cannot meet the housing, mass-transit,and
human-service needs of our people.
LOSS OF OUTPUT. The magnitude of this loss is not trivial. For
example,
suppose unemployment in 1994 had been 4 percent--the interim 5-year
goal
of the Humphrey-Hawkins Full Employment and Balanced Growth Act
of
1978--instead of the 6.1 percent experienced in that year. In
that case, the
nation would have produced roughly $280 billion in additional
goods and
services--more than $1,000 for every man, woman and child. As
noted
economist Robert Eisner, former President of the American Economic
Association, commented on the staggering loss caused by unemployment:
the
nation is "literally throwing away potential output."
OUR REAL DEFICITS. Eisner also brings a much-needed correction
of
the deficit hysteria that has dominated the political agenda by
pointing out
deficits that are more serious than the budgetary one. Over the
long haul, he
says, "our deficits are in our rundown infrastructure of
roads, bridges,
airports, waste disposal facilities" and inadequate environmental
protection.
They are also in our neglect of "a significant part of a
generation growing up
semi-literate in an unending cycle of poverty, in an educational
system more
and more clearly behind that of the World's other developed nations,
in our ...
gaps in child care and health care and in inadequate housing for
tens of
millions of Americans. These are our real deficits. They are large.
They pose
awesome dangers to the future of our economy and our nation."
["Deficits:
Which, How Much and So What?" American Economic Association
Papers and Proceedings, May, 1992]
*See Uncommon Sense #1: "Increasing Unemployment Increases
the
Deficit; Reducing Unemployment Reduces the Deficit."
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Adapted from Sheila D. Collins, Helen Lachs Ginsburg and Gertrude
Schaffner Goldberg, Jobs For All: A Plan for the Revitalization
of
America, New York: Apex Press. 1994, pp. 110-111.
Editor: June Zaccone, Economics (Emer.), Hofstra
University
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