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RESOLVING UNEMPLOYMENT [email protected] March 6, 2014 J Progress Econ Resolving unemployment 26 million unemployed in EU 16-24 of age: 5.6 million, or 23,5% 7,7% in DE, 56,5% in ES, 57,3% in Greece, 50% in Croatia, 22.8% in BE = underestimate: Bloomberg: 31.2 million instead of 19 million in euro area http://blog.lesoir.be/docs/2013/11/29/la-carte-du-chomage-dans-lazone-euro/#more-1184 PROSPECTS: IMF: Euro unemployment rate will increase to 12% in 2014 and will remain above 11% until 2017 March 6, 2014 J Progress Econ Resolving unemployment 26 million unemployed = a disaster For the individual, for family & children For society: missed creation of plus-value, of material, intellectual, artistic wealth Inequality (see Wilkinson & Pickett) POVERTY: EU 25%; 31%aged16-24, 37%ES,45.8%GR,51%BUL 6000 children living in sewers Suicides, ‘austerity kills’ Stuckler&Basu March 6, 2014 J Progress Econ Resolving unemployment CHRONIC SOCIETAL NEEDS: waiting lists! Social housing, schools, transport, clean energy, insulation More staff for nurseries, old-age homes, handicapped, hospitals, teachers for drop-outs, homeless day-&night centers,for mentally handicapped & psychiatric pts,warders in prisons, rehab of convicts,treatment of convicted youngsters. Efficient tax revenu services, police & justice depts, postal service, drinking water, sewage, garbage collection, flood control, more trees More staff for libraries,theatres&companies,orchestras,musea, independent scientific research, broadcasting Humane reception of refugees instead of death at Lampedusa = largely neglected by profit-making sector March 6, 2014 J Progress Econ Resolving unemployment PROPOSAL: In the non-profit& social profit: open 26 million vacancies through public funding wages will be spent at once in the commercial economy: rent,food,energy,clothes, transport,school,internet,health corporate profit ; production;employment =crucial feature of this proposal March 6, 2014 J Progress Econ Resolving unemployment COST ESTIMATE Average 1000 €/m + unemploy benefits >minimum wage or poverty level; adjusted to collective agreements (Trade Unions) after start of hiring = 1000x12x26 million= 312 billion/y RESOURCES COMPARISONS March 6, 2014 J Progress Econ Resolving unemployment RESOURCES: a) immediately: ECB loans à 0.25% through central banks, EIB, to agencies, local govts Legislation:broaden mandate of ECB cfr FED,BoE b) Halt tax evasion,retrieve lowly taxed capital from havens 1000 billion/y (HermanVRompuy),25.000 billion €(OffshoreLeaks); OECD:automatic exchange between 42 signat. Sanctions mandatory (Gabriel Zucman) c) FTT 0.1% =316 billion if 27 member states d) Basket eurobonds (Bofinger) ✚VAT revenue,corporate tax,GDP(debt ratios ) March 6, 2014 J Progress Econ Resolving unemployment COMPARABLE EXPENDITURES ECB Febr26:”2500 billion will be repaid” March 6, 2014 J Progress Econ Resolving unemployment COMPARABLE EXPENDITURES 2 EC approved aid to financial sector 4500 billion total aid 5085.95 billion, = 40% of GDP: bank guarantees 3646 billion; recapitalisation 777 billion; liquidities 216 billion; asset relief interventions 445.65 billion BE supports private corporations 24.66 € billion/y Obama Adm Stimulus 2009: $1529 billion FED QE:2008: $800 billion+1020 billion/y BoE QE: since 2009: £375 billion BoJapan: $74 billion/month =$1350 billion 312 billion € March 6, 2014 J Progress Econ Resolving unemployment OBJECTIONS Skills & qualifications Risk of inflation “Not the task of public authorities “Public spending should be reduced TWO FALLACIES “Investment for growth” Activation of the unemployed COMPARISONS to ARRA,iAGS,ETUC,FES March 6, 2014 J Progress Econ Resolving unemployment SUMMARY 26 million jobs in the non- and social profit by public funding Relieve societal needs business profit, production, hiring, GDP, debt ratios March 6, 2014 J Progress Econ