> The generous (by US
>standards) unemployment and welfare system creates a powerful incentive for
>many people to register as "unemployed" even though they work under the
>table. I know of many such cases. The net result is that people who
>actually have jobs count as "unemployed" in Europe, in the US the same
>shadowy service sector jobs would count as "employment" because there is
>little incentive in claiming the "unemployed" status.
My point was that the definitions of "unemployment" are unrealistic, so that many unemployed are counted as employed. (An hour or two of casual work in the previous month puts you in the "employed" category.
But yes, there are also people working in the black economy (for cheap wages obviously) who might be counted as unemployed. The dole is able to be exploited by employers as a wage subsidy, they pay less than legal wages to people who are unable to complain because they are illegally not declaring the income.
This is indirectly encouraged by the government here, through the ridiculously low earnings thresh-holds. People on the dole can only earn $31 a week before their dole is affected. Tax is also punitive, with all extra earnings being effectively subject to double income tax, as a result of the low tax-free thresh-hold. (its too complicated to explain briefly.)
But the end result is to ensure that unemployed people on the dole are highly exploitable as a cheap labour pool. Those who are caught working while getting the dole are also given harsh prison sentences. No employer has ever, to my knowledge, been prosecuted, let alone imprisoned, for defrauding the welfare system by paying sub-minimum wages to people on the dole. In fact they are usually quite happy to co-operate with the authorities and provide the evidence needed to prosecute the people they have exploited. They are just disposable work animals to these scum. Often they take advantage by exploiting them in other unspeakable ways as well.
Its a wonderful system, for the employing class.
>Of course the question is which of the two is more efficient and more
>desirable socially. The apologist of the US system would point that the
>welfare system undercuts work ethic and promotes cheating. There is
>probably some element of it.
We can hope so. But don't expect too much.
>However, the European welfare system can be thought of as "popular
>Keynesianism" i.e. government providing subsidies directly to the people
>instead of wealthy corporations. The benefit of such "direct benefit" from
>the Keynesian point of view is that they work better to stimulate demand -
>which is their intended purpose - as opposed to corporate subsidies which
>are often used to offset debts or losses or to finance mergers - whose
>effect on aggregate demand is minimal.
The dole is an indirect subsidy to employers, in many ways. But the question is, how does it affect the statistics. I guess the statistics are so dodgey to start with that any affect from welfare payments is a drop in the ocean.
Bill Bartlett Bracknell Tas