76-18-A4
- Main Page \ Reagan Radio Commentaries \ 1977
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Unemployment[edit]
Transcript[edit]There are people in America unemployed through no fault of their own, people who desperately want a job with a future. By far the largest group of unemployed are young people. Some want part-time work while they continue their education. Others want to help the family and some are looking for that first toehold in the job market. The smallest group of unemployed is, however, the one of greatest concern -- the head of household, provider for the family. I'm not going to get into the subject to what measures could best solve these problems; or the effect on teenage employment of the minimum wage; or the lack of investment capital to create jobs because of ridiculous tax policies. These are the result of actions motivated by politics, not statesmanship. But I would like to point out that U.S. Labor Department statistics on unemployment seem to be designed with the preservation of government programs in mind rather than creating full employment. We can't provide answers until we understand who it is we should be trying to help. Two years ago, when New York City's financial plight was getting so much attention, most of us were unaware that Massachusetts was in about the same shape and the word bankruptcy was heard frequently. Unemployment was at or near the top of all the 50 states (a little over 11 percent). And, of course, the cost of the tax-free benefits for the unemployed was part of the state's financial distress. So, even though Massachusetts as a state has subscribed to all the social reforms of recent years, necessity forced it to trim spending wherever and however it could be done. Unemployment benefits had been hiked and extended in the 1974 repression. Total unemployed had risen in Massachusetts from some 168,000 in 1974 to almost 300,000 in 1975. So, unemployment benefits were attacked as one of the areas in which state spending could be cut. In one year unemployment fell from more than 11 percent to 7 percent, a full point below the national average. In numbers, roughly 140,000 people were taken off the unemployment rolls. Naturally, one has to ask how a state creates 140,000 jobs in less than a year. The answer is -- Massachusetts didn't. There were only 19,000 more jobs in 1976 than in 1975. The explanation for 120,000 people disappearing from the rolls of the unemployment figure in America is distorted by the availability of unemployment benefits. Milton Friedman has said, "A large fraction of our unemployment figure does not constitute a human problem -- it constitutes people taking advantage of very good arrangements". Not only do the tax free benefits lure people to quit jobs more frequently , they actually lure people into the job market. The effect is an artificial layer of unemployed who don't reflect the economic situation in the country at all. Right now the United States has the highest percentage of its population at work than at any time in its history. Forty-one percent, but we have a high recession type unemployment figure. Professor Feldstein of Harvard, a top expert on unemployment, says that a possible one-fourth of our unemployed represent people who have voluntarily quit their jobs or are simply moving into the job market because of the generous tax free benefits. This explains the economic miracle in Massachusetts. A drive was put on to ensure that benefits went only to those who had legitimately lost their jobs or were seriously looking for work. The disqualification rate on employment compensation jumped 200 percent. Between 1974 and '75 Massachusetts had only lost 30,000 jobs, but the unemployment rate had gone up by 131,600. In other words, 100,000 people simply came out of the woodwork to get on the gravy train. If Washington would quit playing a numbers game, we could bring unemployment down toward 5 percent with hardship to no one. We could save billions of dollars and concentrate on the really hard-core unemployed who need our help. This is Ronald Reagan. Thanks for listening. |
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