It Is Easy To Beat The Productivity Of The Unemployment Sector

A blog about business and economics.
June 21 2012 5:35 PM

It Is Easy To Beat The Productivity Of The Unemployment Sector

Regarding the eurozone, Simon Johnson says: "Fiscal austerity will not help, but fiscal expansion is also unlikely to do much – although presumably it could increase headline numbers for a quarter or two. The private sector needs to grow, preferably through exporting and through competing more effectively against imports."

That to me reads like a German-style prescription to avoid the adding up constraint and have everyone simultaneously increase net exports (perhaps by finding customers on Mars). Tyler Cowen who praises the column assures me on Twitter that this simply means that Spain, Greece, and the rest ought to raise their productivity. My view is that all countries at all times ought to aspire to raise their productivity, but this is so overwhelmingly true that it can hardly be the answer to specific problems. The Chilean government would do well to take action to raise its workers' productivity and so would the Spanish government and so would the American government. And yet these three countries are in very different economic circumstances right now, and the fact that Chile has the worst productivity of the three hasn't stopped it from having the lowest unemployment rate as well.

Advertisement

One particular problem the United States and Spain are both having right now is that the "sit on the couch feeling depressed and useless while scanning the help wanted listings" sector of the economy suffers from extraordinarily low productivity. Zero productivity, in fact. So looked at correctly, moving any substantial fraction of unemployed people into paid work would be a boon for Spain's productivity. Statistically speaking, however, it would likely show up as a decline in per worker output since the marginal unemployed Spanish person is probably less skilled than the average still-working Spanish person.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

TODAY IN SLATE

Politics

Don’t Worry, Obama Isn’t Sending U.S. Troops to Fight ISIS

But the next president might. 

The Extraordinary Amicus Brief That Attempts to Explain the Wu-Tang Clan to the Supreme Court Justices

Amazon Is Officially a Gadget Company. Here Are Its Six New Devices.

The Human Need to Find Connections in Everything

It’s the source of creativity and delusions. It can harm us more than it helps us.

How Much Should You Loathe NFL Commissioner Roger Goodell?

Here are the facts.

Altered State

The Plight of the Pre-Legalization Marijuana Offender

What should happen to weed users and dealers busted before the stuff was legal?

Surprise! The Women Hired to Fix the NFL Think the NFL Is Just Great.

You Shouldn’t Spank Anyone but Your Consensual Sex Partner

Moneybox
Sept. 17 2014 5:10 PM The Most Awkward Scenario in Which a Man Can Hold a Door for a Woman
  News & Politics
Weigel
Sept. 18 2014 8:58 AM Does this Colorado Poll Show Latino Voters Bailing on the 2014 Election?
  Business
Business Insider
Sept. 17 2014 1:36 PM Nate Silver Versus Princeton Professor: Who Has the Right Models?
  Life
Food
Sept. 18 2014 9:34 AM How to Order Chinese Food First, stop thinking of it as “Chinese food.”
  Double X
The XX Factor
Sept. 17 2014 6:14 PM Today in Gender Gaps: Biking
  Slate Plus
Slate Fare
Sept. 17 2014 9:37 AM Is Slate Too Liberal?  A members-only open thread.
  Arts
Television
Sept. 18 2014 8:53 AM The Other Huxtable Effect Thirty years ago, The Cosby Show gave us one of TV’s great feminists.
  Technology
Future Tense
Sept. 17 2014 9:00 PM Amazon Is Now a Gadget Company
  Health & Science
Bad Astronomy
Sept. 18 2014 7:30 AM Red and Green Ghosts Haunt the Stormy Night
  Sports
Sports Nut
Sept. 17 2014 3:51 PM NFL Jerk Watch: Roger Goodell How much should you loathe the pro football commissioner?