Mass unemployment is becoming a headache for all world leaders. At the World Economic Forums (WEF) in Davos, Bangkok and Istanbul, people were talking about how to address growing unemployment.
To find real solutions to this global jobs crisis we need to be clear on the cause of the problem. The conversations I heard at the WEF revealed widely shared yet false assumptions about key causes of unemployment. The key myths are, as follows:
Myth 1: “Unemployment is due to falling demand.”
Are people’s needs really falling? Or just the amount of money in circulation to employ people/assets to meet those needs?
Myth 2: “Unemployment is due to technology displacing human labour.”
Could we not design systems of ownership and revenue distribution so that the income from technology frees us to work creatively and caringly for each other? How can we govern technology to release us to a world of service, not a life of redundancy?
Myth 3: “Unemployment is due to the cost of hiring and firing.”
Why then do some countries with high wages and labour standards, like Scandinavia, have less % unemployment? Where would competition between nations to lower costs of hiring and firing lead us?
Myth 4: “Unemployment is due to a lack of skills and appetite for the new types of work.”
The world has more skilled labour than ever before, and more labour mobility than ever before, and many people with Masters degrees can’t get a job.
Myth 5: “Unemployment is due to the option to claim benefits.”
Why then was the existence of benefits not keeping people out of the workforce before the recession? Why do some countries with the most supportive welfare states, like Scandinavia, have less % unemployment?
These assumptions arise from a general lack of understanding about the first key function of a currency, which is to help connect assets, including people’s time, with needs. If a currency becomes scarce in an economy, then there is less ability for exchange. That means needs go unmet, and assets go underutilised. Its called unemployment.
I recorded a short interview for the social media corner of WEF in Istanbul to explain where we need to start looking for real solutions to the global jobs crisis.