Benefits to the State from the Program Dealing with Unemployment

Systemic and government stability. The government will not be perceived by people as indifferent or as doing only the necessary minimum, but as an entity that regards unemployment as a high-priority issue and allocates substantial resources for that purpose, primarily in developing human capital and people’s social skills.

Enhancing personal empathy with the state and lifting the national morale. Within a few months after the implementation of the program, a new generation will emerge that does not seek riots or unrest. These individuals will know the reason for the crisis and why they lost their jobs. They will also understand the laws of the global and connected world, and the changes incumbent upon each person, and upon society as a whole.

Optimism is a mighty power. The recognition that we must achieve a balanced economy—not one based on consumerism, but on rational consumption and mutual guarantee—holds within it an optimistic economic and social vision. A generation with such a view will be in a better position to achieve economic prosperity, political and social achievements, thriving health, and a sound family life. This optimism will also allow the state to provide sustainable solutions to the crisis without panic, thus preventing hasty, rash decisions.

Saving up on resources. Financing the new educational program, paying for grants to the workers, and defining the study as a job will indeed cost money, but will also save a lot of money and resources. Many governments invest in national infrastructure projects and execute large-scale construction projects during crises. The funds spent on the national infrastructure are regarded as “growth-generating investments,” and numerous people are employed in executing them. The cost of investment in infrastructures, such as roads and railroads, is far higher than the cost of the emergency program we are suggesting. Moreover, investing in infrastructure will not solve the real problems that today’s global and connected world presents. The damages of hidden unemployment—both in the private sector and especially in the public sector—are enormous. The public sector is expected to contract substantially, particularly in Europe, but also in the U.S., and taking the unemployed into the new education-and-grant program will be far less expensive, and far more efficient, than employing them in national projects.

Financing the efforts to deal with the unemployment problem: The cost of employing a person in the public sector in most countries is overblown and entails large-scale hidden unemployment. The salary of a person who is actually in hidden unemployment can finance the grants of at least two unemployed persons. The expected growth in unemployment and cuts will save the money that will be invested in establishing and maintaining the government educational framework. This will qualify those who were ejected from the job market, and ease their transition into the new way of life.

For more details on the surplus following the expected rise in unemployment, see Chapter, “Surplus and Improving the Public's Well-Being.”