Unemployment Reasons

From World Political Forums:

Geb22's Original Post: Hi, I would like to hear your thoughts on whether technical progress and globalization are important sources of unemployment today.

Posted by SmallPox: Globalization does not create unemployment. It only categorize geographic areas into specialization. When a manufacture job in Canada goes to China, the job is not lost to China, it's merely changed into something else. Now that the manufacturer of gas-pumps can't manufacture gas-pumps in Canada anymore, he'll either have to manufacture higher end products or go back to school and find employment that is actually in demand in his area and increase his skills. So he didn't lose his job, the economical circumstances forced him to find a job more appropriate for the specialization of his geographic area. Canada has incredibly low unemployment rates, despite the fact that outsourcing has been present here just as much as the US.

In fact, globalization creates MORE employment. By allowing the free-flow of goods and jobs around the world, it allows countries to specialize into fields, making them richer and therefore increasing their demands for higher-end goods and services provided by the "west". When Peugeot opens a factory in China, it forces its factory workers to find higher-class work. This higher-class work is then increased in demand because engineers, managers and sells-people are now in higher demand for the operations in China because with the reduce cost, more has to be spent on selling, innovating and managing. Globalization also increases production (see comparative advantage to trade) and the diversification of the market for the economy.

The reason there's so much unemployment in the US is because the Bush Administration did everything to make it look like a loose canon to investors and debt in Iraq are in the triple digits in the billions already.

That's an interesting perspective coming from someone living in Canada. What I find most interesting is that every time I come across economic threads, the vast majority of people demonstrate literally no understand of economics, but yet, due to the influence of the media, everyone speaks as though they understand it. I think Harry Frankfurt got it write in On Bullshit, "One of the most salient features of our culture is that there is so much bullshit". People understand the basic key words thrown around in economic debates and so they just harp on them endlessly. But actually economic knowledge, well, that's pretty much missing from all the debates. Smallpox here comes close to demonstrating an understanding of how things work, which is why I choose to post his response.