President Sirleaf And World Bank/IMF: Debate Employment Policy; Don't Fuss Over The Rate Of Unemployment 

By  J. Yanqui Zaza    


The Perspective
Atlanta, Georgia
July 16, 2013

For over seven years Liberians, including President Sirleaf's advisers have discussed the rate of unemployment.  Government says the rate of unemployment is 3.7%, indicating that the country's security is good. Critics say the rate of unemployment is 80%, implying that the country is sitting on a time bomb. 

Did the government reduce the rate of unemployment to 3.7% by hiring workers to transform Liberia's natural resources to marketable merchandise? For instance, did more skilled workers transform diamond or gold into precious merchandise, iron ore into steel, latex into rubber, log into planks, etc?  I guess the government reached at the 3.7% rate by counting market women, Yana boys who sell pencils or packs of candy, wheel barrow boys who sell water, etc. But President Sirleaf's employed Liberians don’t make $50.00 to $2,000.00 a night the kind of economic dividends prostitutes earn to cover their basic needs. (Robert Kolker of the NY Times, 6/30/13). 

Employment, which generates economic dividends to pay rent, send children to school or to pay medical bills, is an old age problem. Without it, an unemployed is sometimes perceived as a parasite, and subsequently, may abandon his/her responsibility, relocate or worse, he/she might become dangerous to a community. And too many of the unemployed do bankrupt a community, because security as well as business is undermined. Why? This business profit is reduced because the demand for goods and services continues to decline, affecting business profit.

So, to maintain the demand of goods and services at a reasonable level as well as reduce the threat that emanates from an undermined security, developed countries usually provide free money (food stamp, free housing, Medicaid, etc.) to the unemployed. Or in some arrangement, the unemployed receive money for goods and services that might not fit the conventional definition of employment. For example, President Franklin D. Roosevelt paid workers to plant 3 billion trees across America and construct 58,000 monuments, activities that did not generate income.

By workers hiring to plant trees and, or construct monuments, the unemployed had money to buy goods and services. Coincidentally, employers, in anticipation that more people will use money to buy goods and services, did hire more people to produce. The Chinese, in 2013, are using the "Roosevelt concept," that is the would-be demand for goods and services would compel employers to hire more workers or reduce unemployment. They have planed to build houses for 250 million citizens as part of the way of creating employment. By giving houses to 250 million citizens, Chinese believe that employers, wanting to meet the demands of the would-be buyers, would hire more workers to produce goods and services. 

Building houses for 250 million citizens was a Chinese employment policy. Since employment was declining because export was stagnant, due to the global economic crisis, an increase in the purchase of goods and services locally would reduce unemployment. America, by a different approach, has decided to give more money to employers for them to produce, which they hope would lead to more hiring. Even before this new employment policy, government had given more money to its citizens ($600.00 refund and tax cut) to buy goods and services in 2009 and 2010. Apparently, either the money was small, or the money was used to paid down consumers' debt, therefore there was and is little demand for goods and services.

In either case, whether the money was small or consumers redirected the money at debt liquidation, there is no local demand or external demand for America's goods and services. Externally, American goods are either expensive or inferior. In America, residents' disposable income has been declining because employers continue to relocate good-paying jobs outside of the US. If America wants to reduce unemployment, employers must relocate in America to hire American workers, government should increase employment or give more money to the unemployed. 
The Liberian government does not have money to pay the unemployed. Neither does the country have the technical skilled manpower to entice good-paying employers. Worse, the country lacks electricity, water and other infrastructure that good-paying employers need to produce goods and services. 

Yet the current approach of awarding concessionary agreements that allow investors to export the country's resources without adding value does not spur economic activities.  Also, the belief that this approach would bring some relief until the government trains more skilled manpower has been proven to be a disaster. 

Since 1926, Firestone and Liberia implemented this approach, without success. Okay, forget about the past. President Sirleaf and the World Bank promised since 2006 that billions of dollars of concessionary agreements would train Liberians. Yet Liberians are still waiting.

Why? Educating a workforce for an investor that relies on an uneducated workforce is counterproductive. The plantation industry (Slave-Industry) is aware that an educated workforce does reduce the profit margin. Therefore, if Liberia wants an employment policy then it must require investors to produce goods and services that would require an educated workforce. Such an effort will encourage investors as well as the government to institute comprehensive educational policy. 

So a good employment policy must require for investors to add value to the country's resources before being exported. In addition, the country must undertake projects similar to President Franklin D. Roosevelt's Project of "planting trees and constructing monuments." What does that mean? Employ former combatants to cut down trees to construct roads or build elementary schools and, or clinics around the country. Further, hire them to make rice farms, cassava farms or poultry farms, even if the process of rice farm making does not generate profits. The Chinese wall or the Egyptian Pyramids did not generate profits during the earlier period, until modern times of tourism. 

Sure everyone is aware that the World Bank and International Monetary Fund does not favor government's role in economic activity. Nonetheless, the concern of our international partners should not be the only factor in instituting our policy. In fact, experts at these institutions are beginning to listen and learn. Certainly, if you play the videotapes of many uprisings around the world, which are directly the result of high unemployment, they might give you a chance to try your ideas. Or remember of the French Revolution, which warns: If you annoy the salt of the earth enough as well as the rank and file, you might end up beheaded

© 2013 by The Perspective
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