This reminds me of the time I was sitting in an especially boring economics lecture and invented the "Military Equilibrium Rate of Unemployment," the MERU for the era of the all-volunteer army. It's a cousin of the famous NAIRU (which Milton Friedman and Edmund Phelps absurdly dubbed "natural"). I'm leaving out the graph.
Here's the story: the higher the unemployment rate (U), the more recruits, all else constant. The more desperate the job situation, the more people decide that voluntary servitude can work. Given the number of recruits required by the military, that determines the MERU. At that rate, the supply of and demand for cannon fodder are equal. It's not a fixed number: the military can lower the MERU by raising military pay or benefits (or by lowering its standards for recruits). Of course, all of these expedients are limited by budgetary restrictions and military needs. [mathematically, R = f(U), where R is the number of recruits and f' > 0 and f is a nice smooth function of the sort beloved by generations of economists . Given military requirements (R*), the MERU = the inverse of f(R*).] If the actual unemployment rate is below the current MERU, the armed forces need to work harder to recruit (or to lower standards) or the quality of US military might declines, perhaps even at an accelerating rate (akin to Friedman & Phelps' inflationary acceleration). If the actual U exceeds the MERU, the military can pick and choose recruits, lowering pay and benefits, and raising standards. This is based on a story in the old Lipsey/Steiner intro textbook. For them, it was only military wages and other price variables that varied. There was no MERU for them. As is usual in microeconomics, the role of (involuntary) unemployment was ignored. It's entirely a matter of voluntary choice and market equilibrium, with the government being the only bad 'un, on occasion forcing people to join the armed forces using conscription. Is Stockholm calling? New York TIMES / front page /January 19, 2009 / http://www.nytimes.com/2009/01/19/us/19recruits.html More Joining American Military as Jobs Dwindle By LIZETTE ALVAREZ As the number of jobs across the nation dwindles, more Americans are joining the military, lured by a steady paycheck, benefits and training. The last fiscal year was a banner one for the military, with all active-duty and reserve forces meeting or exceeding their recruitment goals for the first time since 2004, the year that violence in Iraq intensified drastically, Pentagon officials said. And the trend seems to be accelerating. The Army exceeded its targets each month for October, November and December — the first quarter of the new fiscal year — bringing in 21,443 new soldiers on active duty and in the reserves. December figures were released last week. Recruiters also report that more people are inquiring about joining the military, a trend that could further bolster the ranks. Of the four armed services, the Army has faced the toughest recruiting challenge in recent years because of high casualty rates in Iraq and long deployments overseas. Recruitment is also strong for the Army National Guard, according to Pentagon figures. The Guard tends to draw older people. "When the economy slackens and unemployment rises and jobs become more scarce in civilian society, recruiting is less challenging," said Curtis Gilroy, the director of accession policy for the Department of Defense. Still, the economy alone does not account for the military's success in attracting more recruits. The recent decline in violence in Iraq has "also had a positive effect," Dr. Gilroy said. < -- Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- Karl, paraphrasing Dante. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
