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The notion that unemployment can be "tackled" or "solved" is part of the flawed thinking of believers in big Government. Employment is a result of demand for the output of an individual: companies sell products and services which have an economic value determined by their supply and the demand from consumers. To meet the demand, companies employ people, and pay a rate below and up to their economic value.

Part of the problem is caused by Governments, who drive a wedge between supply and demand with taxation, and who generally spend large portions on welfare. Welfare creates an obvious disincentive to work, especially when combined with taxes on earnings. When taxes fall on sensitive areas like labour - e.g. employer contributions like payroll taxes in the USA or National Insurance in the UK - it increases the cost of employing people although the economic value of the output remains the same. Sales taxes reduce the demand and supply for products by driving a wedge between the purchase price and the revenue to the seller.

The most obvious solutions to improve employment prospects would be to cut taxes on labour and cut sales taxes. Further tax cuts and help for small businesses, particularly helping with access to capital for start-ups, would help reduce the barriers to job creation.

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