![]() ![]() The office worker shaves minutes off the start and end of her day and wonders why no promotion comes her way “after years of faithful service.” The contractor chats with the homeowner for 45 minutes, 15 minutes with the guy at Home Depot, stops for coffee and donuts on his way to work, and then can’t understand why jobs always take longer than he expects. A house painter paints windows shut on a job, and then can’t figure out why business opportunities disappear. Rather than striving to do excellent work, he regularly says, “Good enough.” The “good enough” worker lies to himself that all will be fine, but like the person with no job, he too is headed toward poverty. It is about how one does a job, with a “slack hand” or with diligence.Ī “slack hand” person works carelessly, sloppily, and, yes, a little deceitfully. This proverb, however, is not about having no job, nor is it about other reasons for poverty, such as oppression, war, illness, natural disasters, and even Satan’s permitted malice (see Book of Job). The idle poor far outnumber the idle rich. What do they do? They watch TV, sleep, hang out, do a little househusband and under the table work, blame others for their condition, and play video games. ![]() How do they survive? Mostly, mothers, wives, and girlfriends support them, along with some Social Security disability checks. The percentage of American men aged 30-50 not working increased from 5% in 1960 to 15% in 2010. Bill Edgar, Geneva College Board of Trustees Member, Former Geneva College President and longtime pastor in the Reformed Presbyterian Church of North America (RPNCA) Proverbs 10:4 – “He who has a slack hand becomes poor, but the hand of the diligent makes rich.”īy Dr. But recent economic research suggests that many long-term unemployed might never find a path back into the labor force.ApHe who has a slack hand becomes poor. Determining the number of workers who will return to the workforce as conditions improve has been difficult, and most estimates have a strong measure of uncertainty. Some of the exits were due to demographic factors and our aging workforce, and some were due to the economic downturn as workers got discouraged and quit seeking work. During the Great Recession, many people dropped out of the labor force. The economy's potential is also affected by the size of the labor force, and this is one of the big uncertainties going forward. Most estimates, along with the actions of policymakers, seem to suggest that we still have a ways to go before we reach full employment. This is essentially a question about how much of the current unemployment is due to structural factors - meaning those that cannot be affected by policy actions - and how much is cyclical, which can be changed through effective policy. But when the gap narrows, policy should ease to prevent overheating and inflation. When this gap is large, there is a lot of slack in the economy and monetary policy should be aggressive. More formally, it is defined as the difference between the economy's productive capacity - the amount of goods and services that could be produced if all labor and capital were fully and efficiently employed - and the actual level of economic output. It represents the quantity of labor and capital that could be employed productively, but isn't instead, it is idle. The amount of slack in the economy is essentially a measure of the quantity of unemployed resources. ![]() But what, exactly, is slack, and how is it measured? How much uncertainty is there about this measurement? And what does the current degree of slack in the economy tell us about how the Fed is thinking about monetary policy? economy, a key theme at the central bank's two-day policy meeting is almost certainly how much economic "slack" remains. With Federal Reserve officials scheduled today to issue its latest readout on the U.S. ![]()
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