Contrary to these notions, businesses exist not to create employment, but to generate revenue and profits. Let's say, for example, that you would like to start generating some personal revenue through a lawn care service. After a few months, business begins to pick up, your client base increases, and you have more work than you can handle alone. In order to meet the demands of your clients and continue generating revenue, you decide to hire an assistant. Eventually, you may be forced to hire more assistants or employees to accommodate your growing business. Therefore, in your attempt to generate and increase revenues for yourself, you have created employment opportunities for others and benefited society. This occurs without any perceived or coerced moral or social obligation to decrease unemployment.
Naturally, when businesses experience a significant decrease in revenue, they attempt to offset it by reducing expenses in order to maintain their viability, and ultimately, their existence. The unfortunate consequence of such an offset is often loss of employment, since the decreased demand also decreases the level of production, which will in turn decrease existing labor requirements. Therefore, when companies who are faced with this scenario are forced to maintain certain levels of employment or employee compensation, as unions often do, they are being forced into financial despondency and possible extinction.
In short, unemployment occurs when the need for an individual's services no longer exists, and the business attempts to increase its efficiency. Hence, businesses who undergo massive labor reductions, yet remain in operation, reveal either recent or long-held inefficiencies in their operations. Businesses that remain inefficient for too long will eventually succumb to market forces or competition that is more efficient, unless a monopoly or regulations exist. When this happens, even more people will find themselves without employment.
Simply put, having the right to work does not mean having a right to a specific job. A job is nothing more than the provision of a service to fulfill a specific demand. The basic economic principles of supply and demand are at work. When demand decreases (or increases), supply should react accordingly. Left to its (the market's) own devices, meaning, the removing insidious regulation, taxation, and other free market hindrances, the situation will eventually correct itself to meet the endless flux of society's demands.
Sean Turner is a member of the Project 21 Advisory Council of the National Center for Public Policy Research, a regular columnist for RenewAmerica.us, and a contributor to a number of conservative websites. Readers can email him at [email protected] .
http://accesswdun.com/article/2003/6/176926