A striking characteristic of the labour market
A major characteristic of the behavior of both the employed and the unemployed is a claim for equal or near equal treatment by the employer and, in particular, a claim for equal or near equal pay compared to employees in equal or similar positions. This claim makes the structure of wages differ from the structure of the (assumed) individual values added by employees, and it thereby makes employees unequally profitable for employers.
At least from the employer’s point of view, the lower the employee’s assumed productivity, the less the employee contributes to the company’s profitability compared to others in similar positions. In consequence, the least productive (real or potential) employees are less than profitable. Employers, therefore, try to restrict employment to the comparatively more productive, i.e. the profitable members of the labor force, leaving the others unemployed.
A striking political implication of this is that, at least in the long run, an increase in employment has a lower effect on the level of output than one might expect. This in turn means that reducing unemployment is a highly crucial moral challenge, but less so an economic one.
And this, in turn, explains why it is not at all a matter of course to gain majority support for full employment policies.