It is argued that supply-side policies, which include cutting taxes on businesses and reducing regulation, create jobs, reduce unemployment, and decrease labors share of national income. Other supply-side policies include education to make workers more attractive to employers. History
There are relatively limited historical records on unemployment because it has not always been acknowledged or measured systematically. Industrialization involves economies of scale, which often prevent individuals from having the capital to create their own jobs to be self-employed. An individual who cannot join an enterprise or create a job is unemployed. As individual farmers, ranchers, spinners, doctors and merchants are organized into large enterprises, those who cannot join or compete become unemployed. Recognition of unemployment occurred slowly as economies across the world industrialized and bureaucratized. Before that, traditional self-sufficient native societies had no concept of unemployment. The recognition of the concept of "unemployment" is best exemplified through the well documented historical records in England. For example, in 16th-century, England no distinction was made between vagrants and the jobless; both were simply categorized as "sturdy beggars", who were to be punished and moved on. 16th century
The closing of the monasteries in the 1530s increased poverty, as the Roman Catholic Church had helped the poor. In addition, there was a significant rise in enclosures during the Tudor period. Also, the population was rising. Those unable to find work had a stark choice: starve or break the law.
Rising unemployment has traditionally been regarded by the public and the media in any country as a key guarantor of electoral defeat for any government that oversees it. That was very much the consensus in the United Kingdom until 1983, when Thatchers Conservative government won a landslide in the general election, despite overseeing a rise in unemployment from 1.5 million to 3.2 million since the 1979 election. Benefits
The primary benefit of unemployment is that people are available for hire, without being headhunted away from their existing employers. That permits both new and old businesses to take on staff. Unemployment is argued to be "beneficial" to the people who are not unemployed in the sense that it averts inflation, which itself has damaging effects, by providing (in Marxian terms) a reserve army of labour, which keeps wages in check. However, the direct connection between full local employment and local inflation has been disputed by some because of the recent increase in international trade that supplies low-priced goods even while local employment rates rise to full employment. Full employment cannot be achieved because workers would shirk if they were not threatened with the possibility of unemployment. The curve for the no-shirking condition (labelled NSC) thus goes to infinity at full employment. The inflation-fighting benefits to the entire economy arising from a presumed optimum level of unemployment have been studied extensively. The Shapiro–Stiglitz model suggests that wages never bid down sufficiently to reach 0% unemployment.