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People have very different takes on what, if anything, should be done about unemployment and the hardships it produces. Those on the conservative end of the spectrum have long argued that unemployment is an inevitable feature of the dynamic capitalist economy. The 20th century's most outspoken advocate of free enterprise, Milton Friedman, asserted in Capitalism and Freedom (1962) that severe unemployment was almost always the result of government ineptitude, not ordinary business cycles. He also blamed some unemployment on minimum wage laws, which, therefore, he wanted to see abolished. At the other (left) end of the political spectrum, radical thinkers from Marx onward have depicted unemployment as both a systemic and a necessary feature of capitalism. Periodic bouts of mass unemployment, in their view, serve to weaken labor unions, restrain wages, and bolster corporate profits. In Marx's view, capitalist crises could be expected to not only continue but grow in intensity, cutting into production and expanding the "reserve army of the unemployed," until at last the working classes threw off their shackles and seized control of the system.

The centrist view of unemployment since the Great Depression has been to see the macro economy as subject to periodic (though not worsening) downturns, which the government can moderate but not eliminate. Unemployment is therefore accepted as a fact of the modern mixed economy. By a proper use of fiscal and monetary tools, economic fluctuations can be held within acceptable bounds, and unemployment insurance-- part of a broader safety net--can keep the consequences for individual workers tolerable. It would be hard to find a prominent conservative or libertarian thinker today who would advocate abolishing the UI system that Americans have had since 1935. Debate about how best to help the unemployed centers instead on where the benefit levels should be set and how long the unemployed should be able to collect their benefits. If benefit levels are set too low, the safety net will not meet the basic test of adequacy. There may be another problem as well: low benefit levels will tend to cause the unemployed to shorten their job searches and accept the first job that comes along, even if it does not make appropriate use of their human capital. The end result is inefficiency in the economy. If benefit levels are set too high, it allows workers to extend their job searches beyond what would otherwise be the case. This, too, can be a source of economic inefficiency and waste.

References:

Clark, Andrew E., and Andrew J. Oswald, "Unhappiness and Unemployment." Economic Journal 104, no. 424 (May 1994), 648-659.

Friedman, Milton, Capitalism and Freedom. Chicago: University of Chicago Press, 1962.

Gerdtham, Ulf-G., and Magnus Johannesson, "A Note on the Effect of Unemployment on Mortality." Journal of Health Economics 22, no. 3 (May 2003), 505-518.

Lubove, Roy, The Struggle for Social Security, 1900-1935. Cambridge, MA: Harvard University Press, 1968.

Schiller, Bradley, The Economics of Poverty and Discrimination, 10th ed. Upper Saddle River, NJ: Pearson Prentice Hall, 2008.

Sharp, Ansel, Charles Register, and Paul Grimes, Economics of Social Issues, 19th ed. New York: McGraw-Hill/Irwin, 2009.

Strully, Kate W., "Job Loss and Health in the U.S. Labor Market." Demography 46, no. 2 (May 2009), 221-246.

"Symposium: The Natural Rate of Unemployment." Journal of Economic Perspectives 11, no. 1 (1997): 3-108.

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