> If unemployment did not exist, the capitalist class would have no power to make workers work harder using the threat of losing their jobs.
How so?
There could be 0% unemployment and anyone could find another job easily, but the other job could pay less, or have less flexibility, or be in a less convenient location, so you still prefer the job you have now.
Suppose unemployment is low because prices are high, so no one can afford to go without a job and will take jobs under unfavorable terms in order to make rent.
> There could be 0% unemployment and anyone could find another job easily
Technically, 0% unemployment would mean that you can't take another job, as you transitioning into another job would create frictional unemployment, which would mean that the unemployment rate would not be 0%.
In practice, somewhere around 3% is usually considered full employment. The 3% are those in the process of changing jobs.
> Technically, 0% unemployment would mean that you can't take another job, as you transitioning into another job would create frictional unemployment
Transitioning to another job only creates frictional unemployment if there is a period where you are out of work but looking for work. Otherwise (e.g., if you find a new job before leaving) if you have a break from work as part of transition, it creates a frictional exit from the labor force, not frictional unemployment.
But 0% unemployment is hard to imagine if employers can terminate workers without first finding them acceptable replacement employment.
It comes down to profit. Costs (like labor wages) cut into profits. Capitalism could hypothetically support a high thriving-wage for all workers and still create profit for the owners, but historically the owner intentionally depresses wages so that the owner's profit portion is larger.
High unemployment creates conditions favorable for the owners. It creates leverage for the owners to coerce the workers into accepting lower wages. A scenario where the state offered full employment as a competitive labor market to the private sector would force the private owners to raise their wages. Then they would have to deal with how they want to approach their profit situation. They'd probably just raise prices of their products. But in the end, the owner is making the decision on what the prices would be. Not the employees.
The way it does this isn't by paying workers more than competitors do for the same work. It's by charging customers less than competitors do, which actually selfishly benefits them by increasing their market share, but also distributes more wealth to workers because you can buy more for the same dollar (or the same amount of stuff and add to your savings or pay down debt).
What prevents this is uncompetitive markets, which are occasionally found as a result of natural monopolies, and more commonly found as a result of regulatory capture.
Are people really confusing unemployment with no job vacancies?
You could have 100% employment, and still have people looking to hire. If there are 1000 people in a population who all work, it doesn't mean none of the businesses are looking to hire
That would still require the employer to have a monopoly on jobs.
Unemployment is very frequently caused by people who can command wages well above subsistence level preferring to go unemployed while holding out for a wage consistent with their skills, even if there are a zillion subsistence-level jobs they could take in an instant if need be.
Wouldn’t that depend on the social safety nets in place? Say unemployment in Europe versus the US. Also nothing stopping a terminated person from seeking other employment opportunities.
You know that the basis of all production the most labour intensive industries are not in Europe or US. But in third world countries. Its where you find most factories, mines, farms... You know why the industries migrate there? Because there is very little social safety and labour is cheap. When we talk about capitalism, we need to remember that it is a global economic system.
Labor is cheap in those places because cheaply sold labor is a better deal for residents than subsistence farming; over time, the labor gets less cheap as living standards increase for those places.
It's obviously possible to take that observation too far, and to excuse all sorts of abuses. But the underlying phenomenon seems to square pretty well with what we know about living standards over time worldwide.
How so?
There could be 0% unemployment and anyone could find another job easily, but the other job could pay less, or have less flexibility, or be in a less convenient location, so you still prefer the job you have now.
Suppose unemployment is low because prices are high, so no one can afford to go without a job and will take jobs under unfavorable terms in order to make rent.