From: jmarttila@abo.fi (Fast-Eddie Felson)
Subject: Re: Immigrants and employment
Organization: Turku School of Economics
Date: Thu, 20 Aug 1992 01:12:11 GMT

Reply-To: jafitv@termo.unit.no (Jan Arne Fagertun)
>> The society doesn't want to employ anyone, it's the businesses and
>> organizations that employ people. Nobody has the obligation to employ
>> anyone. It was in a particular eastern country that the society used
>> to employ people. Our western society, however, works so that people
>> are employed only if there's a need for such and even then employers
 
>How is this need defined then ?
 
Okay, lets's have a few words about "need" later        Original
referred as demand. Now let's imagine a chain of         demand      II   /\
demand. In the other end we have someone who needs          I        II  /II\
some product or service, I'll call that one the          Product     II   II
original demand. The product the original demand            I        II ? II
is about needs production. The production needs         Production   II   II
a) capital, b) raw-material and c) labor.               I   I   I   \II/  II
                                                    Capital I Labor  \/   II
Now the market economy this chain goes from            Raw-material
top to bottom. The original demand defines the
product. The product defines the production. The
production defines the amount of capital, the 
raw-materials, and finally the labor. This works
fine because the demand always defines the supply
and if the supply doesn't match the demand it must
adjust to it or it stops existing.
 
In the economy of the former USSR style the chain goes from bottom to top 
beginning from the labor. The labor needs jobs, i e production. The
production makes the products and finally the products need someone to
buy and consume them.  The flaw is that the labor doesn't define the
production, that is, any kind of production would fulfil the need. The 
production doesn't define the products, any kind of products fulfil 
production's need. Now these products need someone who needs them, but
as the supply doesn't meet the demand completely there is a lot of wasted
efforts. To avoid a total khaos and bringing the supply closer to the demand
the chain must be contolled - in the USSR case by the central government.
The central government directs the labor to work for the production they 
think that can make the products they think the demand is about. This is a 
long chain and not too easy to control. Also the problem of the supply not 
meeting the demand still exists, because the need of product is defined
by the central government, not by the original demand itself. Sometimes the 
supply is closer to the demand, sometimes not.
 
In a pure market economy the supply always meets the demand so there will
be no wasted efforts on any ring of this chain. 
 
Now here we get to my original statement, that there must be a need for the
labor, before the labor can be employed - not so that the society has to
create production to fulfil the labor's need to work. 
Which was to be proved O:)
 
>Don't people starve in large areas of the world ?
 
Yes, to keep in the terms of my previous argumentation, the demand of food 
can't reach the supply because there are not enough resources to make 
enough supply. This is mainly caused the natural conditions that are not
suitable for agriculture, the source of food. This is, however, another 
important question, but has nothing to do with employment.
 
>> can make the choise of who they want to employ O:). Nowadays employers
>> would rather like to get rid of their current employees than employ
 
>I know. But have you ever wondered about this:
>After all, when the businesses don't want their workers, they don't
>just vanish - they have to keep on living. The society pays the
>unemployed. Isn't it a bit strange that the businesses can just "hand
>the workers over to the society" to feed them until the businesses
>need their working capacity again ? Sort of make others handle the
>businesses' problem.
>Why should the society pay people to waste their production capacity ?
>Instead of paying them for unemployment, the society should "buy their
>production capacity", and sell their products.
 
The businesses problem is how to make profit. That's the only real problem.
If employing the workers doesn't increase profit, but rather decreases
it, it's not worth employing the workers. Shall this loss caused by employing
an unneeded worker be called X. 
Now our system guarantees to each member of the society a certain minimum 
income in case of unemployment. Shall this income be called Y. 
If the society wants to pay a business for employing a worker the 
amount paid must exceed X - otherwise the businesses won't do it. Now when 
we think, what is good for the society, we can draw the conclusion that 
when Y is bigger than X, it's worth paying the business to employ  
the worker rather than letting the worker be unemployed and get the direct 
economic support from the society. If X is bigger than Y, it's better for 
the society to let the worker to stay unemployed than pay for the worker's 
employment.
 
>The society can't just "get rid of the people", like the businesses do - 
>we have to handle it in some way or another. Why not just handle it in 
>the best way for both the society and the people ?
 
Afterall the society *is* the people and what the society pays the people 
pay in form of taxes. The best way is what I described above.
 
>> Yes, Pakistani people are less likely to go in strike and they do the
>> same work with less money. Usually, however, they are offered only
 
>As far as I know, Pakistani workers inside Norway is (or at least
>should be) paid as much as norwegian workers, for the same job.
>But that's not the point - the point is that immigrants were very
>welcome at some time, and (nearly) all, both immigrants and norwegians,
>were employed. There were enough jobs for both the norwegians and the
>immigrants.
>Did the immigrants take the jobs from the norwegians, then ?
>Or is it a political/economical question ?
 
The employers know what they can pay to a worker and the less the better it 
is to the employer. The employee knows what he/she wants to be paid for a 
particular job and the more the better it is. The Pakistani people are 
satisfied with a smaller income than the Norwegians which makes them more 
attractive to the employers.
 
Let's take an example: You Norwegians are known as shipowners. The profits 
of shipping have been low and to increase the profit the shipowners must 
decrease the cost of making profit. One way to do this is to register the 
ships to a country that doesn't have much restrictions about the crew so 
the shipowners can hire less educated people from for example Pakistan. 
This is to say that the Pakistanis were welcome to the Norwegian ships, but 
they took the jobs from the Norwegian sailors who wanted more money.
The Norwegians are also often organized in labor unions which partly keeps 
the wages high and partly makes the Norwegians less trustworthy as they 
tend to go in strike once in a while.  
 
The concept of people being paid equally for the equal jobs belongs to the 
same category than the concept that the society has to make jobs for the 
unemployed. You say the Pakistani workers should be paid as much as the 
Norwegians. As it's not the businesses' problem to keep up the standard of 
living of the workers, but making profit there's no reason why the 
businesses would pay more than the workers are worth. If the Norwegians are 
paid more, it simply indicates that the businesses give more value to the 
Norwegians' work than to the Pakistanis' work. 
 
>> I thought you were joking when you said you are a communist O:)
 
>Joking is too serious to make jokes about .-)
 
Oh, but I was not joking O;) 
 
 
      Greetings,
 
      Jouni  
    _______________________________________________________________________
    Jouni Marttila - Yo-kyl{ 11 B 25, 20540 Turku, FINLAND - +358 21 374624
         jmarttila@finabo.abo.fi - jmarttila@finabo - abovax::jmarttila
Newsgroups: soc.culture.nordic