labor01 Apr 2004
An interesting article by Kumar Venkat compares the environmental crisis of depleting natural resources and our labor surplus in developing nations and asks a good question:
Is it possible that we are over-optimizing one factor of production – labor – at the expense of other resources that are truly scarce? One way to answer this is to look at the biologically productive land and water area required to support our resource consumption and waste output.
At the time of such unprecedented resource use, nearly 750 million people around the world are either unemployed or classified as “working poor”, according to the International Labor Organization. More than 500 million additional workers will enter the world’s labor markets by 2015.
A number of resource economists and sustainability thinkers have advocated an environmental tax shift in developed nations, which would reduce the tax burden on labor and increase it on fossil fuels, virgin raw materials, waste generation, and pollution. The idea is to encourage more employment of labor and less of scarce natural resources. Tax shifting is finding much more traction in Europe than in the United States.
His idea, I guess, is that if we spent 3x the labor using 1/3 the natural resources, we’d be a lot better off and a lot more sustainable. My macroeconomics are too dusty to come up with reasons off the top of my head why this is a bad idea.. Anyone?