Unemployment as a Nonproblem

IKENNA ANYANWU_70-X3_mod7_Discussion 9/24/12
Discussion Assignment
In this module, we'll discuss the idea that unemployment is a "non-problem".
After reading the notes inclusive through Module 7, please respond to the following question:
Jean-Baptiste Say, the classical economists, and some contemporary economists would argue that a discussion of unemployment is a "non-problem." Discuss the position that France or Germany really has no "unemployment problem." Hint: examine union rules, customs, and lifestyles, and compare union-management bargaining positions in France or Germany with those in Ireland or Spain.
The beliefs of Jean-Baptiste Say and other classical economists’ that unemployment is a “non-problem” are entrenched in their opinion that the economy is self-regulating (invisible hand). They reason that any unemployment should be considered voluntary unemployment since jobs do exist but workers may be unwilling to take the jobs due to undesirable wages or other circumstances. Another possible explanation for unemployment being a “non-problem” may be found in the concept of opportunity cost.
It is true that different countries have different natural rates of unemployment, but why is this so? Since the same paradigm is employed in calculating the unemployment rate across the board for different countries, why are some economies seemingly not utilizing the full potential of their resource market? In some cases, a nation having a comparatively lesser unemployment rate doesn’t automatically imply that a more efficient resource market is in operation there than one with a higher unemployment rate. This incongruity is evident when France is compared to Ireland. Ireland with a current unemployment rate of 14.9% apparently features a better resource market than France which has a 10.2% unemployment rate. A November 2010 article on The Economist’s website, titled “Two cases that help explain France’s high unemployment”, the author argues that because French labor regulations are too restrictive, in addition to the high tax “wedge” foreign employers seek greener pastures elsewhere. In the featured story, the passenger airline company Ryanair, despite high demand for their affordable transport service in France, planned to shut down operation at its only French base in favor of moving to Ireland which featured less burdensome labor contracts. (http://www.economist.com/node/17421434).
Discrepancies in economic policies can obviously impact frictional unemployment, or structural employment to some extent. In times of economic hardship (as the one we’re experiencing now) disincentives to work should be minimized. This is where the concept of opportunity cost might be manipulated by the unemployed. Excessive unemployment benefits, tight labor market regulations against prospective employers encourage the unemployed to remain unemployed.