75-01-B1
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Unemployment(1)
TranscriptWhen is a recession real and when is it a case of mass hysteria? The answers may surprise you. I'll be right back. For the next few days I'm going to talk about unemployment. To those of us who live through the great depression of the 30s the word is traumatic, almost like the age-old panic words famine and plague. When the Depression came about almost one-fourth of the nation's labor force was thrown out of work virtually overnight. There was nothing to cushion the shock, no severance pay, no unemployment insurance, no welfare. Workers went from earning a living to almost instant destitution. All of my life, I'll carry the memory of my father opening an envelope on Christmas Eve and learning that, as of that moment, he was unemployed. I can still see him sitting there holding that letter and then almost whispering, "That's quite a Christmas present." If you've ever been out of a job you know how much that news must have hurt but today the way the U.S. Department of Labor measures unemployment statistics it's reporting, in addition to those who've actually lost their jobs, a lot of people is unemployed who really aren't in that plight. Unfortunately for everyone, the inflated figures make for scare headlines, you can hardly pick up a paper or watch the news on TV without being treated to a dramatic announcement of the latest increase in unemployment, plus dire predictions of worse to come. The employment picture is not as bright as we'd like it to be, but it's far from being as dark as most news stories would have it. We're in a fight against inflation, that means sweating out a period of economic dislocation even a recession. If we take the advice of some of those in Congress who urges to drop the fight against inflation and take only anti-recession measures, instead we'll be on the road to disaster. Economics is not an exact science. The mathematician can declare with perfect confidence that two plus two make four, not so the economist. All his formulas and theory can be upset by an imponderable factor called human nature. Let the press play up every fractional change in the unemployment rate headline every temporary layoff until enough people decide to put off buying something such as a new automobile and we'll have a recession, whether the economist predicted or not. We can't afford an artificially induced depression psychology. The job situation has not reached the crisis stage and does not warrant the high-priced panic measures conjured up by Congress. The fact is more people are employed today at a higher level of income than at any time in our history. When we hear the word unemployed we have a mental picture of desperate men long out of work knocking vainly on door after door in search of a job. Now that may have fit the depression of the thirties, but it doesn't describe the situation today. Today, most unemployment is of relatively short duration. The unemployed is an ever-changing group. In fact, the average period of unemployment is 10 weeks or less. In England both inflation and recession are worse than they are here. Why then is their unemployment rate only a third of ours. The answer is it's all in the way you count. If we use their method we'd have an unemployment rate of less than one percent. Should a man who quits his job to look for a better one be considered unemployed and hence eligible for a subsidy from his fellow citizens? Tomorrow, I'll be back with the answers to this and some other questions and to tell you how we count our unemployed in the United States I think you'll be surprised. This is Ronald Reagan. Thanks for listening. |
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