Yet Nobody Gives A Damn Or Has The Balls To Do It!
Poverty stems from unemployment. Unemployment is resulting from the gap between demand and supply in labour market. To combat poverty is to simply put unemployed workers into the jobs. Boom! A piece of cake. But, wait. Which unemployment are we talking about? There are two types: cyclical and structural unemployment.
Total Unemployment = Cyclical + Structural
Note: the article will not take corruption into equation.
Cyclical Unemployment
Recession plays a major role causing such unemployment. The word cyclical refers to the cycle in economics. Downs in economy interrupt the consumptions affecting the production. Low production results in decrease in requirements for labour. As there are many layoffs, the workers spend less since their spendings are heavily driven by their future expectation (click here for Milton Friedman's Permanent Income Hypothesis). This creates a vicious cycle.
consumption down --> production down --> labour requirement down --> unemployment up --> consumption down
The idea of increasing government expenditure to smoothen the economy cycles is derived from the original idea of John Maynard Keynes. Lack of demand is the source of problem. What should have been done in households during recessions is not applicable in macro scale. During recession, households tend to save due to uncertainty. He believed that government should spend more. The subsequent effect of government expenditure produces the well known multiplier effect. Hence, this can break the vicious cycle.
Households =/= Nations
Government expenditure up --> requirement for labours up --> labours' consumptions up --> Multiplier Effect
Magical as it may seem, this imposes a greater problem as government expenditure needs money to spend. The loaded government can supposedly ease the pain of such unemployment easily and instantly. A massive infrastructure project might be an ideal choice to create jobs and help the economy to grow in the long run. On contrary, this remedy increases the complexity for a deprived country with a high debt baggage. Despite its complication, most politicians tend to advance the expenditure in order to satisfy the aspiration of suffering workers. This is aligned with the controversial saying from Keynes, "In the long run, we are all dead."
Structural Unemployment
This type of unemployment is due to dynamic trend in labour markets. Trends are mostly triggered by technological improvement, obsolescence of workers' skills and shifting in demography. Compared to cyclical unemployment which is solely due to economic cycles, the structural gap resulting from the trend poses greater scale of problem in a longer term.
Some objected that the rapid development of technology led to potential unemployment. This causes the headlines of technological development bring about anxiety amongst workers. This may sound logical yet absurd at the same time. The latest development of Tesla bot clearly puts humanity into the least dangerous job and promotes a leap of efficiency. Such development should not be hindered at all cost. Humans should keep reminding themselves of their ultimate goal (click here). However, it cannot be denied that individuals predominantly concern themselves about their own short-term well-beings. This is worsen by recently acquired, yet outdated skills and bubbling demography. It may simply be solved by education.
Practical as it may seem, a radical change in education which might help covering the structural gap of unemployment is nearly unachievable. It is not entirely due to small margin of error considering agility and adaptability to eliminate continuously emerging gap. It is because politicians tend to avoid decisions producing a long-term results. The Monocle Guide of How to Make a Nation emphasises the importance of a body eyeing on the future. It proposes that The Minster of Future should exist to complement the government role imposed by term limits. Besides that, there is nothing much can be done. Once again, everything goes back to what Keynes said, "In the long run, we are all dead."
Solution
Both cyclical and structural unemployment are the roots of all poverty. In cyclical unemployment, the job opportunity clearly drops because of recession. On the other hand, inability of workers to cope a more relevant skills in a rat race with the technology causes drops in job requirement as well. The problems boil down to one thing: over-supply of labour. As easy as child's' play, eliminating poverty can be done by limiting the supply of labour. As John Rawls' Theory of Justice (which will be discussed in the near future) states that everyone has rights to live, one cannot just annihilate unemployed workers. So how? By Limiting the reproductive rights. The idea is to limit every couple rights to produce a baby. This will be discussed in the next article elaborating pros & cons, couples' eligibility and spectrum of policy.
Surplus in labour force = unemployment = poverty
Hence,
Limiting reproductive rights --> less fluctuation in cyclical; more agile and adaptable in structural --> Less surplus in labour force = no unemployment = no poverty
Comments