1. Introduction
People, in general, like to know about others' erotic lives, and – although many don’t acknowledge – they enjoy erotica. Interestingly enough, researchers at Duke University have proven that this interest of ours is also shared by primates, indicating that there might be an evolutionary basis for our fascination with pornography. (Click here to read about it)
Unfortunately, the knowledge of Macroeconomics – despite its unquestionable importance for every citizen in a democratic society – does not enjoy the same allure. While it is almost a civic duty to understand the fundamental of Macroeconomics, the majority is deeply uninterested to read about it.
Hence - and as a civic duty of mine! - I took it upon myself to combine the latter, with a mild dose of the former to make it palatable for everyone, pretty much like adding a bit of sugar to the medicine.
So, here is the important subject of Unemployment, erotically explained!
2. The Labor market
Imagine a secluded singles’ resort in the Caribbean filled with young men and women, who’re looking forward to have some fun [The Labor market].
First of all, let’s see what The “Labor Force” is: Although the majority of these singles can’t wait to see some action, not everyone is interested in fooling around: Some are committed [retired], some are not in the mood for love [under 16], some are celibate [sick, mentally unstable and etc.] and some are there, merely to enjoy the scenery [full-time students]. Hence the labor force is, simply, the whole population of vacationers, minus those who’re not looking for sex. Therefore, the “unemployment rate” is the percentage of those who’re looking for sex but aren’t having any, over the “labor force”. As simple as that!
Now that we know what the “labor force” is, and we can also calculate the “rate of joblessness”, let’s continue with the story of our little resort…
3. Full Employment
Every night, for a given level of expectation [real wage], a certain percentage of vacationers can get laid.
Moreover, there are certain delightful nights where almost every man who has reasonable expectations, and is looking for a partner can find a suitable one. In the Caribbean, they call a night as such “La Noche de Amor”. In Macroeconomics, they’re simply called “Full Employment”!
During these enchanting nights, theoretically, there should be no room for anyone who doesn't need a room! But in practice, there “is not enough love to go round”, even during “the night of love” and some people will end up with no one to couple with, but their own hands. Those who remain celibate during the night of love are considered to be “Naturally Unshagables” [Natural Unemployment]. Let’s explore why?
4. Frictional and Structural Unemployment
Imagine a lovely bonfire on the beach, very close to the ocean, where young men and women are dancing and singing [Graduates, right out of the school], flirting and cuddling [workers between jobs and so on]. These folks want to mate, and they want it badly. Otherwise, they would have been sleeping in their rooms. However, unlike those who right at that movement are having steaming hot sex [those who’re employed], they aren’t getting any. But they’re on the right path and hopefully, they’ll have some job to do, before the dawn! These people, who’re doing the dance of love, but not making any love, are called “Between loves” or from the perspective of Macroeconomics “Frictionally unemployed” (Isn’t it amusing when the actual term in the Economics is actually sexier?!)
But apart from those, there is a second group of folks who’re willing to copulate but can’t succeed. Here is the story: There’s a not-so-charming, and a bit overweight girl at the bar, who wants to fool around with that geeky guy who’s sipping his beer on the back porch. However, the geeky guy doesn’t want to sleep with her. He’s fancying that hot voluptuous goddess who’s dancing passionately in her short red skirt. Yet, the gorgeous girl has her eyes on that tall handsome man who’s sitting at the corner, not knowing that he’s gay and he’s dreaming about the muscular bartender, who is; by the way, straight!
At the end of the night, this horny bunch [Structurally unemployed] will sleep alone, despite the fact that there were enough willing partners to sleep with. It’s just that what they want and what they can get, don’t match each other [skills that employers are looking for don’t match that of job seekers in that geographical area].
Nonetheless, if the situation continues for few nights, two things might happen: Either the sexual pressure might convince the gorgeous girl to sleep with the geeky guy [Underemployment], or she might give up on the whole idea of getting laid for a while and start reading or scuba diving! In either of those cases, she’s out of the labor market. That is exactly why the existence of this kind of sexually-deprived people [structurally unemployed] bothers the resort manager [the government] the most!
5. Cyclical Unemployment
It would be fantastic if every night was “La Noche de Amor”, but unfortunately, life [Economy] doesn’t work that way. There would be many nights where even handsome vacationers should sleep alone [Recession]!
Let’s imagine a night that has coincided with the final match of the European champions’ league between Bayern Munich and Barcelona (North Americans can alternatively read: “Super Bowl” or “Stanley cup’s final”). There’re still enough beautiful and willing ladies around the resort [supply in abundance] but most of gents prefer to spend their nights in front of a giant flat screen TV, enjoying the intense suspense and their pints of beer. In response, ladies might try their finest seduction techniques [promotion, lowering price and etc], but sometimes, even the fatal attraction of a goddess falls short of the allure of the live sport. Consequently, most of the ladies would give up on that tasteless bunch and would go to their rooms, frustrated [a recession due to demand shock].
The manager of the resort [governments and central banks], however, has many tools in his toolbox to prevent, or shorten the misery. He can organize a topless bikini contest [lowering taxes], offer an open bar [fiscal stimulus], or even extend it till the morning [lowering interest rates], all of which, designed to tempt sports fans to give up on football and get back to bed. Sometimes, those techniques work and a sexual boom follows the erotic bust. Other times, the resort steps into a depression mode!
There is another form of recession and that happens where – this time – ladies stop supplying their femininity. Imagine that a female-empowering-self-help book is going around the resort that encourages women to save themselves for their one true love and refrain from meaningless sex with random strangers [high price of oil and other raw materials for example]. The result would be dozens of bored, eligible men around the pool with very few women to hang out with [Recession due to Supply shock]. The result of this event would be almost the same as the previous one: sharp reduction in the erotic action. Nonetheless, there would be one major difference here: Those few women who either didn’t read the book, or weren’t convinced of the premise, will become extremely popular and in ridiculously high demand [Inflation]. Nonetheless, the resort manager can still try to remedy the situation by supplying more alcohol [reducing the production barrier, corporate tax rates and etc].
There would be cases where both demand and supply diminish. Suppose that a rumor is going on around the resort that some sort of STD epidemic is on the rise [collapse of the financial system for example]. Crab-fearing vacationers; both men and women, would abstain from sexual contacts and their actions would cause the resort to move away from a Pazzollini’s cinematic creation toward something that satisfies the Pope!
Almost every tourism experts [economists] believe that in those situations, the resort manager should; first and foremost, deal with the rumor of STD [save the finical system, even if a massive bail out is necessary] otherwise the resort will never recover.
In all those cases, those who did not make love are called “periodically sex-deprived” [Cyclically unemployed].
Now let’s leave the island for a minute and get back to real life. Can you tell me:
- What is the labor market and how we can calculate unemployment rate?
- What are the full employment and the natural rate of unemployment?
- Why some people are still unemployed, even during full employment?
- What are the definition of structural and frictional unemployment?
- What is the cyclical unemployment and how it is different from Natural unemployment?
As you just saw, Macroeconomics is not difficult, and it is much harder for politicians to fool those who know it.
Well, that was my civic duty, fulfilled I suppose!
