Why People Are Unemployed
Jobs are plentiful where land is, too. That is, where land and locations are affordable.
November 13, 2015
Jeffery J. Smith
Activist

Are These the Results You’re Looking For?

If you’re not a trust fund baby, and you don’t have the savings or backers to start a business, you hunt for a job, offered by someone who did have savings or backers.

Then, at your first interview, they offer you the job. It’s that easy. How can it be so easy? Fiction? A fluke? Or actual fact? If fact, what makes it so?

Want wages? Denmark (cited as the happiest place on the planet), enjoyed the highest jump in wages in Dansk history. How? New Zealand (which should’ve won happiest place on the planet), enjoyed a decade of employment at not 95% or 97% but 99%—for 10 straight years!

How?

It was a public policy, but it had nothing to do with wages or jobs directly. And it can be won locally.

Jobs Need Lots

The answer is a stretch, but it is true. Jobs are plentiful where land is, too. That is, where land and locations are affordable.

Employers need a place (land) to do business. If they can’t afford the best locations, then they can’t hire the most people. And if they must pay a lot for even an inferior site, then again they don’t have the funds to expand.

In some cities, once-prime land has become affordable, only because the economy died or is in a coma. Think the Bronx. Or Detroit. It’s the US city with the most unemployed—officially, one in four can’t find work (probably one in two in reality).

Look around. Count the vacant lots, often entire city blocks that support nothing more than weeds and rubble. How many jobs exist on vacant lots? Zero.

Or go to the poor part of any city, where the unemployment rate soars above any skyscraper. Same barrenness, same joblessness, same poverty. Unused land means unused hands.

Wages Need Leverage

And the fewer the jobs, the lower the wages. When jobs seek people, wages are high. When people seek jobs, wages are low.

In America’s past, when young (white) men did not like the wages offered in the city, they could claim land and farm in the country. Hence, wages were higher along America’s Eastern seaboard than in Europe. Later, wages were higher in America’s West than back East. All because land was available and people did not have to compete for jobs.

When Prince Albert, back in the days of the British Empire (the 1800s), got back to England after touring his empire, someone asked him how he liked his dominion Canada. He replied he hated the place. There was so much free land, he said, he could not find a man to polish his boots. One of the most powerful men on the planet could not overrule natural law—how land means self-esteem, opportunity, and high wages.

Prince Albert, back in the days of the British Empire (the 1800s), complained about this fact. When he got back to England after touring his empire, someone asked him how he liked his dominion Canada. He replied he hated the place. There was so much free land, he could not find a man to polish his boots. Today in wealthy New York, a shoeshine guy is somebody Wall Street traders can find every day, every hour. But back then, one of the most powerful men on the planet could not overrule natural law—how land means self-esteem, opportunity, and high wages.

Not Free Land But Free Something

OK, firms need affordable metro land, but city dwellers need something, too. Now that very few of us are farmers but mainly urban workers, what could replace free land? The answer is free “rent”. Herein, technically, “rent” means the flow of money that society spends to own or use land or resources.

Try this. Pay everybody a share of all the rent that’s spent in the region. When each resident gets a share of that flow of spending, then each one can sit tight and negotiate higher wages—even without unions and minimum wages. Or more quickly save up and start a business. Or take the time to acquire a skill or invent a better mousetrap.

Everyone is entitled to land value, not as owners but as residents. None of us created land while all of us—as the region’s populace—do create the value of land, simply by needing locations for homes and businesses. And the more of us who want to live in the same area, the more we have to pay. Land costs most where density is highest; witness New York, San Francisco, etc.

The source of an extra income apart from our labor, or capital, must be land. Sharing land rent does not divert any earnings from anyone, since no human made land. Thus nobody is forced to work for anyone else involuntarily. Instead of paying a seller or banker for land, you’d pay all your neighbors in the region.

And there’s another reason nobody is forced to work involuntarily. When land rent is disbursed society-wide, that keeps employers and employees on an even footing, so workers can’t be exploited. Getting an income apart from our labor makes our labor more valuable to others.

A Half Loaf is Way Better Than None

If rent is to be shared, of course first it must be recovered. Government could tax private land, lease pubic land, charge a land use fee, or institute land rents. Whenever government has done anything like that, the results have been spectacular. Recall the nations above.

  • In the decade of the 60s when New Zealand had a land tax that was nationwide, the only citizens who were unemployed were between jobs, choosing temporary unemployment.
  • In 1960, after Denmark voted to raise the rate of its land tax, its workers enjoyed their biggest raise in their nation’s history.
  • In the 1920s, construction workers were kept fully employed in New York because the state let the city exempt new structures while maintaining the property tax on lots.
To pay the land rents, owners don’t speculate but keep their sites at highest and best use. The construction requires workers. The resultant shops, offices, and factories hire workers. The new residents have needs and meeting them takes workers, too. As demand for labor goes up, wages go up.

Why does rent-recovery work so well? To pay the land rents, owners don’t speculate but keep their sites at highest and best use. The construction requires workers. The resultant shops, offices, and factories hire workers. The new residents have needs and meeting them takes workers, too. As demand for labor goes up, wages go up.

So if you want work or fatter wages, you can join a union or demand a minimum. But as long as you’re getting involved in politics, you may as well demand what actually works in economics—land rents coupled with rent shares. Then everybody can feel like a trust fund baby.

Jobs are plentiful where land is, too. That is, where land and locations are affordable.
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Jeffery J. Smith
Activist

JEFFERY J. SMITH published The Geonomist, which won a California GreenLight Award, has appeared in both the popular press (e.g.,TruthOut) and academic journals (e.g., USC's “Planning and Markets”), been interviewed on radio and TV, lobbied officials, testified before the Russian Duma, conducted research (e.g., for Portland's mass transit agency), and recruited activists and academics to Progress.org. A member of the International Society for Ecological Economics and of Mensa, he lives in Mexico. Jeffery formerly was Chief Editor at Progress.org.