The Intractable Tragedy of Long-Term Unemployment

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Readers share their stories and solutions about the Great Recession's most painful legacy

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Reuters

The vast majority of the 5.5 million long-term unemployed have been out of work for more than a year. For this installment of "Working it Out," we asked you if the government should enact special programs to help the long-term unemployed. We've received more than 100 responses. Here are some of the smartest, most heartfelt, and most provocative.

This is our failure as a nation

When people mattered more than arcane ideologies of the hard right, public works programs filled in the gap during economic contractions. We did this not only because it was humane and just, but because it worked. It put money into people's pockets, maintained communities and social capital, and often improved civic infrastructure, which in turn laid the foundations for future prosperity.

We can no longer do this because our political system has been captured by plutocrats who imagine a largely fictitious but virtuous republic before Big Government. You worked or you starved. You pulled yourself by your bootstraps. And you never asked for anything. You earned it all on your own.

The grotesque degree of hypocrisy coming from the right ought to illustrate this toxic myth. As The New York Times reported last Sunday, politically conservative counties are "takers" who benefit more from Washington than they have contributed to it. They imagine themselves Rugged Individualists while enjoying expensive entitlements on the public dime. And if there's even a modest proposal for some spending cuts, they demagogue those as evil (e.g., death panels).

Back in the 1930s, we were largely one nation. Now, we're a nation at war with itself, and we seem to be compulsively seeking punishment for others as a necessary corrective. This amounts to punishment for thee but not for me. Republicans thrive politically by dividing us between good and bad, white and black, Christian and non-Christian, and deserving and non-deserving. This is the Big Lie at the root of our political and economic debate. If we're not one nation, we will collapse. What good will it do if you're snug inside a gated community collecting a pension? The devastation will find you.

The left, not the right, is standing in the way of job creation

On the contrary, a lot of the public works programs of the stimulus were halted by the arcane ideologies of the left, rather than the right.  Things like environmental impact analysis and fair wage laws and unionized labor clauses held back a lot of these projects.  This is why the WH estimated early in the process that only about $200B of public works projects could be funded by the stimulus and the actual number was closer to $60B in the first year. 

My current belief in a politically frictionless world, Keynesian stimulus can help.  Unfortunately the frictions in our system inhibit it from working more than a very limited amount.  That seems roughly consistent with Krugman's complaints that most of the stimulus wasn't spent on actual stimulus.

My long-term unemployment experience #1

As a business owner, I can tell you my challenge today is not policy uncertainty, tax liability or regulation. It's finding customers. You're not going to fix the consumer problem by putting bandaids on businesses.

Listen, all the things you mention are the entrance fee to playing the game, but they won't make you any more competitive than the next guy, and they don't help me find new products & services or customers to buy them.

Caveat: I'm a small business so I don't get a huge benefit from corporate lobbying, etc.

I completely agree with you on the housing and especially mobility. Tough pill to swallow, but maybe we should be disincentivizing home ownership and giving more support to owners that rent their property.

My long-term unemployment experience #2

Don't get me started... I'm 52 and was an senior IT manager with very strong technical knowledge and skills just below the C-suite level. I'm a 99er and have also stripped the 401K and all savings we had. My wife and I are fortunate we have no debt other than a mortgage that is FAR from underwater.  3 years as of 3/1 since my company was acquired and all but 13 out of 180 were laid off - the 13 folks working on the particular technology that the company was purchased to acquire. In the time since I've sent out something close to 2500 resumes and gotten precisely 3 interviews. My HR and recruiter friends have referred to it as having a case of the "Overs" - over-qualified, over-experienced, over-paid and over-50.

What are we supposed to do? If one more person suggests taking a $10/hour job or worse, I'm gonna' scream. $10/hour doesn't even cover commuting expenses much less provide any sort of living wage. This is what 30+ years in your field gets you in this modern world.

My long-term unemployment experience #3

I have worked as a contractor since being laid off, but the interval between engagements has grown to  an average of TEN months. My skills are current, having just completed three years of high level IT projects at one of the biggest companies. Recruiters call or email me daily, so not being hired for ANY position is a result of what part of the process? Quite objectively there are MILLIONS of over 50 workers who are going to become dependent on some type of assistance in the next Obama term unless something drastic is done. What's that old curse?  "May you live in interesting times..."

My long-term unemployment experience #4

I've been unemployed for more than 2 years (I was laid off.) and have been volunteering, hoping it will turn into some kind of paying work eventually. I'm a 55-year-old woman. The last time I even scored an interview, the company seemed very interested in me until they met me and realized that I'm not 25. 

So here's what this employer did. After meeting me (on interview #3), they took my resume, retooled the job posting based on my qualifications, and I never heard from them again. They clearly wanted someone just like me, but a lot younger. The new job posting lifted language directly out of my resume. Nervy. 

Employers have all the power right now and they are wielding it viciously. I'm highly qualified, but there aren't enough jobs. I can't move because I can't sell my house. Where would I move to find a more promising job market anyway? 

I hope the volunteering will turn into something that pays because volunteering costs me money for gas, business clothing, etc. My savings is gone, my house needs a new roof, and I don't know what I'll do if this goes on much longer. 

The so-called free-market approach is ridiculously WRONG on so many levels. People who think that way must be evil, stupid, and so privileged that they have no idea what really goes on. OR, they are part of the 1% who are benefiting from the hardships people like me have been stuck with and are just bald-faced liars.

My long-term unemployment experience #5

One of the people we just hired is 48 and has been unemployed for 2 years. He's a specialist in servicing lasers that cut sheet metal. I hired him because he "got" why I listed flower arranging as a potentially useful skill on our build, and so far he's working out great. He shows up early, works hard, and picks up on stuff quickly.

Two simple ideas to help the unemployed

I support the free-market approach with these two additions: (1) Triple the amount of monthly unemployment checks and (2) Allow people to continue working while eligible for unemployment checks

The roots of the crisis

I think the free market prescription would be helpful in lowering the overall unemployment rate, but I'm not sure it would be particularly effective against the long term unemployed problem.  I think the roots of crisis-level long term unemployment are:

1) the housing meltdown which has devasted construction employment & related jobs
2) the negative homeowners equity problem that restricts mobility
3) the bias against hiring in general due to the unknown cost of the health insurance mandate (which probably also includes some element of age discrimination:  the older your workforce, the more expensive it is to insure)
4) the regulatory morass that makes it so difficult to start a new business (some of the permanently displaced workers from declining industries could theoretically be opening taverns, welding shops, engine repair businesses, etc., but it is increasingly difficult to start those businesses.)

As to solutions, we need to get the US economy growing much faster in order to raise overall employment and income.  That is really the only sustainable way to fix the housing market which would help with my points 1 & 2.  The solution to 3) is to repeal Obamacare, or amend it substantially.  The solution to 4 is complicated.  We need a federal, state and local initiative to eliminate unnecessary regulations and restraints, and streamline those that are genuinely necessary.  That will be a long and slow process.

As to making the economy grow faster, I would suggest significant tax reform resulting in the elimination of the corporate tax system entirely, consolidation of payroll tax and income tax into a single structure of low relatively flat rates with few or no deductions and elimination of the AMT.  With corporate tax gone all dividend income and cap gains could be fairly taxed at the ordinary income rate.  (This would probably not be revenue neutral at least in the short run, so government expenditures would have to be cut virtually across the board to keep from ballooning the deficit even further.)

Then open up as much as land as possible for energy and mineral extraction.  A lot of the unemployed construction workers could be working on pipelines, drilling platforms, access roads, etc.  Approving the Keystone XL would be a decent start.  Along these lines it would be wise to streamline and accelerate the construction of nuclear power plants.

A tragedy of circumstances, not a failure of will

You know, if you compared those graduating college in 2006-2007 to those who graduated in 2008-2010,  I bet you'd find that the former group did much better in their job search and are doing much better in their current career prospects than the latter.  But ask a free market acolyte why this is, and they'll point to lack of skills and initiative to explain away the unemployed.  Is there really, truly, any difference between the two groups?  Couldn't the second group do so much better if given a fair chance?  Did millions of previously employed workers suddenly become irrevocably unqualified to work again? 

This is no simple recession.  People's lives have been blighted for no other reason than bad luck and indifference, and the response by government and business has been shameful.

Not a failure of will #2

There are vastly more unemployed people than there are job openings.  I am completely baffled by anyone who thinks the solution is to make the unemployed people desire work more strongly.

How will history judge us?

The plight of the long-term unemployed in America will be the subject of history tomorrow -- frankly, the truly long-term unemployed remaining in America today will likely never work again in the US during their lifetimes -- the options that remain include: a) destitution; b) charity; c) marry money; d) emigration; d) crime; or e) suicide -- I weep for those who are genuinely enduring long-term unemployment in America...

The long-term tragedy of long-term unemployment

Raw self-interest suggests we do something to keep 5+ million working age people from falling out of employment for the rest of their lives.  If those people remain unemployed and unemployable, impoverished and marginalized, they provide a drag on the economy for the rest of us.
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Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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