Editing Unemployment (section)

==Remedies==
{{see also|Job creation index}}
{| class="wikitable" style="text-align: right; font-size: 75%; float: right; margin:0 0 1em 1em;"
|+United States families on relief (in 1,000s)<ref>{{cite book|last=Howard|first=Donald S.|title=WPA and Federal Relief Policy|year=1943|page=34}}</ref>
|-
!
! 1936
! 1937
! 1938
! 1939
! 1940
! 1941
|-
! colspan="7"| Workers employed
|-
! WPA
| 1,995
| 2,227
| 1,932
| 2,911
| 1,971
| 1,638
|-
! CCC and NYA
| 712
| 801
| 643
| 793
| 877
| 919
|-
! Other federal work projects
| 554
| 663
| 452
| 488
| 468
| 681
|-
! colspan="7"| Cases on public assistance
|-
! Social security programs
| 602
| 1,306
| 1,852
| 2,132
| 2,308
| 2,517
|-
! General relief
| 2,946
| 1,484
| 1,611
| 1,647
| 1,570
| 1,206
|-
! colspan="7"| Totals
|-
! Total families helped
| 5,886
| 5,660
| 5,474
| 6,751
| 5,860
| 5,167
|-
! Unemployed workers (BLS)
| 9,030
| 7,700
| 10,390
| 9,480
| 8,120
| 5,560
|-
! Coverage (cases/unemployed)
| 65%
| 74%
| 53%
| 71%
| 72%
| 93%
|}

Societies try a number of different measures to get as many people as possible into work, and various societies have experienced close to [[full employment]] for extended periods, particularly during the [[post-World War II economic expansion]]. The United Kingdom in the 1950s and 1960s averaged 1.6% unemployment,<ref>{{cite book | last = Sloman | first = John | title = Economics | year = 2003 | page = [https://archive.org/details/economics0000slom/page/811 811] | publisher = Prentice Hall | location = London | isbn = 978-0-273-65574-9 | url-access = registration | url = https://archive.org/details/economics0000slom/page/811}}</ref> and in Australia, the 1945 ''[[White Paper on Full Employment in Australia]]'' established a government policy of full employment, which lasted until the 1970s.<ref>{{Cite news|url=https://www.theguardian.com/commentisfree/2019/jul/26/having-a-constant-pool-of-unemployed-workers-is-deliberate-policy|title=Having a constant pool of unemployed workers is deliberate policy {{!}} Van Badham|last=Badham|first=Van|date=26 July 2019|work=The Guardian|access-date=24 October 2019|language=en-GB|issn=0261-3077}}</ref>

However, [[mainstream economics|mainstream economic]] discussions of full employment since the 1970s suggest that attempts to reduce the level of unemployment below the [[natural rate of unemployment]] will fail but result only in less output and more inflation.

===Demand-side solutions===
Increases in the demand for labour move the economy along the [[demand curve]], increasing wages and employment. The demand for labour in an economy is derived from the demand for goods and services. As such, if the demand for goods and services in the economy increases, the demand for labour will increase, increasing employment and wages.

There are many ways to stimulate demand for goods and services. Increasing wages to the working class (those more likely to spend the increased funds on goods and services, rather than various types of savings or commodity purchases) is one theory that is proposed. Increased wages are believed to be more effective in boosting demand for goods and services than central banking strategies, which put the increased money supply mostly into the hands of wealthy persons and institutions. Monetarists suggest that increasing money supply in general increases short-term demand. As for the long-term demand, the increased demand is negated by inflation. A rise in fiscal expenditures is another strategy for boosting aggregate demand.

Providing aid to the unemployed is a strategy that is used to prevent cutbacks in consumption of goods and services, which can lead to a vicious cycle of further job losses and further decreases in consumption and demand. Many countries aid the unemployed through social [[welfare spending|welfare]] programs. Such unemployment benefits include [[unemployment insurance]], [[unemployment compensation]], welfare, and subsidies to aid in retraining. The main goal of such programs is to alleviate short-term hardships and, more importantly, to allow workers more time to search for a job.

A direct demand-side solution to unemployment is government-funded employment of the able-bodied poor. This was notably implemented in Britain from the 17th century until 1948 in the institution of the [[workhouse]], which provided jobs for the unemployed with harsh conditions and poor wages to dissuade their use. A modern alternative is a [[job guarantee]] in which the government guarantees work at a living wage.

Temporary measures can include [[public works]] programs such as the [[Works Progress Administration]]. Government-funded employment is not widely advocated as a solution to unemployment except in times of crisis. That is attributed to the public sector jobs existence depending directly on the tax receipts from private sector employment.
[[File:State Employment growth and Tax Changes for the Top 10%.jpg|thumb|Supply-side economics proposes that lower taxes lead to employment growth. Historical state data from the United States shows a heterogeneous result.]]

In the US, the unemployment insurance allowance is based solely on previous income (not time worked, family size, etc.) and usually compensates for one third of previous income. To qualify, people must reside in their respective state for at least a year and work. The system was established by the [[Social Security Act]] of 1935. Although 90% of citizens are covered by unemployment insurance, less than 40% apply for and receive benefits.<ref>{{cite web|work=Center on Budget and Policy Priorities|title=Introduction to Unemployment Insurance|url=http://www.cbpp.org/cms/index.cfm?fa=view&id=1466#_ftn2|access-date=21 October 2010|date=15 December 2008}}</ref> However, the number applying for and receiving benefits increases during recessions. For highly-seasonal industries, the system provides income to workers during the off-season, thus encouraging them to stay attached to the industry.
[[File:State Employment growth and Tax Changes for the Bottom 90% v2.jpg|thumb|Tax decreases on high income earners (top 10%) are not correlated with employment growth, but tax decreases on lower-income earners (bottom 90%) are correlated with employment growth.<ref name="economix.blogs.nytimes.com">{{cite news| url=https://economix.blogs.nytimes.com/2012/10/19/tax-cuts-for-job-creators/ | work=The New York Times | title=Tax Cuts for Job Creators | date=19 October 2012}}</ref>]]

According to classical economic theory, markets reach equilibrium where supply equals demand; everyone who wants to sell at the market price can do so. Those who do not want to sell at that price do not; in the labour market, this is classical unemployment. Monetary policy and fiscal policy can both be used to increase short-term growth in the economy, increasing the demand for labour and decreasing unemployment.

===Supply-side solutions===
However, the labor market is not 100% efficient although it may be more efficient than the bureaucracy. Some{{who|date=March 2021}} argue that minimum wages and union activity keep wages from falling, which means that too many people want to sell their labour at the going price but cannot. That assumes [[perfect competition]] exists in the labour market, specifically that no single entity is large enough to affect wage levels and that employees are similar in ability.

Advocates{{who|date=March 2021}} of [[supply-side]] policies believe those policies can solve the problem by making the labour market more flexible. These include removing the minimum wage and reducing the power of unions. Supply-siders argue that their reforms increase long-term growth by reducing labour costs. The increased supply of goods and services requires more workers, increasing employment. It is argued{{by whom|date=March 2021}} that supply-side policies, which include cutting taxes on businesses and reducing regulation, create jobs, reduce unemployment, and decrease labor's share of national income. Other supply-side policies include education to make workers more attractive to employers.