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What causes unemployment?

* Abstract

The job market is not an homogeneous one. There is an internal job market inside each large company. This paper is devoted to the external market.

We can see the amount and the length of unemployment. They demonstrate that this unemployment is not due to circumstances. Such an unemployment has structural causes. Cyclical factors turn out with two others factors. Three causes of unemployment give three kinds of jobs searchers and three strategies for outplacement.

* The adaptation unemployment

In a classical economic model, the labour market is the subject of fluctuations as do the products or the services markets. Alternatively, there are under-employment and excess-employment, due to an adjustment delay between offer and demand of work. In order to respond to the demand from their customers, the companies make investments in capital and hiring in labour. The specialized skills being not always available from the market, the offer-demand rules draw the skills to the most efficient companies. These offer higher wages and a more attractive way of work. The less efficient companies content themselves with least skills. So, they contribute to the training of their employees. The competition is stired up by any little fluctuation on any market: products, services, labour or capital. The competition regulates quantities offered and demanded while fixing prices. The rise or the drop of prices restores, little by little, the balance between the offer and the demand. When a new skill is strongly demanded, specialists are employed at a high rate. Then, people offering their work try to get this skill. The teaching organizations built the relevant trainings. The lack of skills is absorbed. All the companies find the skills on the market. The embauchage salary returns to its normal level. On the other hand, when a company has difficulties, she dismisses her too many employees in order to fit her costs to her takings. The market shares lost by one are collected by some others. Growing companies increase their hiring. The skills dismissed by the company in difficulty are employed by the efficient ones. Nothing is lost, nothing is created, everything is moved. The fluctuations are due to an adjustment delay. This kind of unemployment is temporary. It increases or decreases the way temperature climbs or drops inside a boiler controled by a thermostat. Altough simple, this equilibrium theory fits some real mechanisms. This adaptation unemployment exists. But it's not the only one.

* The redeployment unemployment

The actual economy is caracterized by the opening of the markets and the world wide globalization of the production. This new scale is a result from the growth of many international companies. These large firms don't destroy the small ones. The competition is a two level game: competition between large companies to organize the world market, subcontracting from large to small, competition between the small ones. This differentiation between companies goes with a transformation of occupations. The technical division of work is most important in the large international companies than in Small or Medium Companies. The expected behaviours, the company culture, don't make easier the transition from one kind of company to the other. The specialization of the Small and Medium Companies, in the activities left by the large ones, increases this difference. By putting work out to contract, a large company gives the risk of fluctuations to the subcontractors. By the "just-in-time", stocks and their financing are left to the supplier. Now, it's the turn of the large company to be in difficulty. She dismisses. Governments rely on small companies to create jobs. The transfert of skills, from the large companies to the others requires a technical and organizational redeployment. It's necessary to change the point of view, to loose the habits, to acquire a new way of thinking and working. As a versatile, multi-purpose work, job hunting contributes to this evolution. Training specialized for entering Small and Medium Companies, shared-time jobs improve this process.

This hierarchy of companies has modified the labour market and the industrial trade. The diversity of skills, of customs and cultures requires a longer adjustment delay. Sometimes, values may be conflicting. An increased change in the mentality prolongs the transfer.

* The crisis unemployment

The industrial production occures in a world wide productive system. The search for productivity in the material transformation has pushed the automation of the processes up to a very high level. The flows, tightened up to the just-in-time, are disrupted by the least strike. This regulation of the physical flows is allowed by the developpment of data flows, in order to command and to control. These data flows reside in computers networks. The world wide productive system is an efficient engine. It pushes the world economy in a rapid running. The mechanisms multiplying jobs, in an upward or in a downward trend, become very important. The customer's demand fluctuations accelerate the fluctuations in the demand for industrial equipments. This gives a high level to the instability factor. The company needs flexibility in her hiring while the employee would like to savour the satisfaction of a well made work. The more the engine is rapid, the more the vehicle requires a large and distant visibility. The companies have to understand, to expect and to anticipate the evolutions. In order to reduce the time-to-market, we experiment the concurrent engineering, simultaneous design of product and process. The computer aided design tools show virtual products in three dimensions. Before the real production, we virtualy simulate this production. Before the real sell, we simulate the customer's behaviour. These tools require and use a large field of knowledge. Each ounce of intelligence in a software requires tons of knowledge. The speed of the industrial engine causes an exponential need for know-how, in order to drive the social vehicle. The knowledge processing is very expensive since the computerized tools are missing. Good specialists are far from the industrial world. A few ergonomits appeared during the Marshall Plan. Linguists, terminologists, specialists in semantics are only introduced in the translation services. This unproductivity in the knowledge process causes a bottleneck, even a deadlock, in the large industrial company.

While putting the emphasis on the productivity in the only material process one gets incomprehensible the actual underemployment. A real, complete technical progress would produce only an adjustment unemployment. This would be resorbed by the companies who drive the world market. The large company has not enough global productivity. Her undeniable gains of productivity in the material transformation are not large enough to finance the search in the knowledge processing. She's like an exhausted athlete unable to climb a wall. Too poor for investing in all the domains, she refocuses on her activity core: the industrial production. She slows down the development of really new products. Having lost her leadership, she becomes a competitor among the Small and Medium Companies. These have the advantage of flexibility. In order to lighten herself, she externalizes her non-industrial activities. The hero throws away his weapons in order to climb the wall. The actual unemployment is the conjunction of: a strong productivity in the secondary activities and a low productivity in the tertiary activities. If possible, people left on the labour market must create the new market of knowledge. The actual development of telework may be analysed in this context and in fonction of this stake.

These three causes of unemployment give three kinds of jobs searchers and three strategies for outplacement.

Telework concerns particularly the third catégory. For this, we have designed and created the Network for Remote Activities.

Hubert Houdoy

on 24 May 96

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Mise à jour: 16/07/2003