Unemployment looks normal for everyone except those out of work for six months or longer. If we don't act soon, the long-term unemployed will become unemployable.
There's a new cliff in town, and it's much scarier than the fiscal cliff. It doesn't have anything to do with expiring tax cuts or sequesters. It has to do with people who have been out of work for six months or longer. It's the worst cliff of them all: the Unemployment Cliff.
Our unemployment crisis is also an unemployment enigma. When jobs openings go up, unemployment should go down. This relationship is captured by the Beveridge Curve, seen below. The diagonal red line says that when there are more vacant job openings, the unemployment rate should be lower. But as you can see in the bottom right hand corner, something strange (and very bad!) is happening. More job openings haven't produced more jobs. That suggests a mismatch between jobs and skills ... the dreaded "structural unemployment."
Look again. This might be the most important chart you'll see. If unemployment really is structural, there's not much more policymakers can do to bring it down. If it's not, policymakers should be tearing their hair out to put people back to work. So, is it? No. A pioneering paper out of the Boston Fed pretty definitively shows that we have a long-term unemployment problem, not a structural unemployment problem.
There's always a story when it comes to structural unemployment, and it's almost always a story about old workers needing new skills for our brave, new economic world. The Boston Fed paper, by Rand Ghayad, a Ph.D. candidate in economics at Northeastern and Visting Fellow at the Federal Reserve Bank of Boston, and William Dickens, a professor of economics at Northeastern and visiting scholar at the Federal Reserve Bank of Boston, looks at the Beveridge curves for different ages, industries and education levels to figure out exactly who is getting left behind nowadays. The answer is ... everybody. The Beveridge curves for young and old, blue-collar and white-collar, and high school and college graduates all look alike -- there's the same upward tick in all of them. There's a word for this, and that word is flabbergasting. As Ghayad and Dickens point out, the last time we had a structural unemployment problem was during the deindustrialization of the 1970s and 1980s, when Beveridge curves for blue-collar workers, and only blue-collar workers, moved up. Did we all wake up in 2008 and suddenly lose our skills?
Not exactly. Ghayad and Dickens broke down Beveridge curves along one more axis -- length of unemployment. Here's what it looks like for people who have been out of work for less than six months. This is what normal looks like.
This chart is worth approximately 20 words. People out of work for less than six months haven't had a harder time finding work than they usually do. But the Beveridge curve has shifted up for all workers, so that implies all of the shift must have come from people out of work for six months or more. The chart below shows us that this is indeed the unhappy case. Unemployment is a cliff that's hard to climb out of after six months.
It's hard to imagine a big skills or incentives gap between people unemployed for five months and people unemployed for six months. But it's not hard to imagine companies treating their resumes differently. Overrun HR departments might just toss the resumes of applicants who have been out of work for six months or more, because they assume there must be something wrong with people who have been out of work that long. Sadly, this isn't a hypothetical. Scott Pelley reported on firms that won't consider the long-term unemployed -- or the unemployed, period -- for 60 Minutes earlier this year. It's depressingly legal to discriminate against the unemployed, and a depressing number of companies do just that.
Circles don't get more vicious than this. The people who need work the most can't even get an interview, let alone a job. It's a cycle that could end with the long-term unemployed becoming unemployable. It's what economists call hysteresis, the idea being that a slump, left untreated, can make us permanently poorer by reducing our future ability to do and make things. You should be scared anytime you see the words "permanently" and "poorer" together in a sentence -- especially if you're a policymaker. We need more stimulus, and we need it now. That means the Fed needs to figure out its thresholds for forward guidance and Congress needs to not only undo the fiscal cliff, but also, please, give us some more infrastructure spending. Heck, Larry Summers and Brad DeLong think fiscal stimulus might even pay for itself with interest rates so low by preventing hysteresis from happening.
We can do better, if we want to. As Paul Krugman points out, people told themselves structural unemployment was to blame during the Great Depression too, only to discover that all the people who supposedly didn't have the right skills suddenly did once the military buildup started. Funny how adequate demand works. The best thing we can do for long-term growth is to forget the long-term and get the long-term unemployed back to work now.
In the long run, we can't afford to worry about the long run.
19 Kids and Counting built its reputation on preaching family values, but the mass-media platforms that made the family famous might also be their undoing.
On Thursday, news broke that Josh Duggar, the oldest son of the Duggar family's 19 children, had, as a teenager, allegedly molested five underage girls. Four of them, allegedly, were his sisters.
The information came to light because, in 2006—two years before 17 Kids and Counting first aired on TLC, and thus two years before the Duggars became reality-TV celebrities—the family recorded an appearance on TheOprah Winfrey Show. Before the taping, an anonymous source sent an email to Harpo warning the production company Josh’s alleged molestation. Harpo forwarded the email to authorities, triggering a police investigation (the Oprah appearance never aired). The news was reported this week by In Touch Weekly—after the magazine filed a Freedom of Information Act request to see the police report on the case—and then confirmed by the Duggars in a statement posted on Facebook.
The Islamic State is no mere collection of psychopaths. It is a religious group with carefully considered beliefs, among them that it is a key agent of the coming apocalypse. Here’s what that means for its strategy—and for how to stop it.
What is the Islamic State?
Where did it come from, and what are its intentions? The simplicity of these questions can be deceiving, and few Western leaders seem to know the answers. In December, The New York Times published confidential comments by Major General Michael K. Nagata, the Special Operations commander for the United States in the Middle East, admitting that he had hardly begun figuring out the Islamic State’s appeal. “We have not defeated the idea,” he said. “We do not even understand the idea.” In the past year, President Obama has referred to the Islamic State, variously, as “not Islamic” and as al-Qaeda’s “jayvee team,” statements that reflected confusion about the group, and may have contributed to significant strategic errors.
New research confirms what they say about nice guys.
Smile at the customer. Bake cookies for your colleagues. Sing your subordinates’ praises. Share credit. Listen. Empathize. Don’t drive the last dollar out of a deal. Leave the last doughnut for someone else.
Sneer at the customer. Keep your colleagues on edge. Claim credit. Speak first. Put your feet on the table. Withhold approval. Instill fear. Interrupt. Ask for more. And by all means, take that last doughnut. You deserve it.
Follow one of those paths, the success literature tells us, and you’ll go far. Follow the other, and you’ll die powerless and broke. The only question is, which is which?
Of all the issues that preoccupy the modern mind—Nature or nurture? Is there life in outer space? Why can’t America field a decent soccer team?—it’s hard to think of one that has attracted so much water-cooler philosophizing yet so little scientific inquiry. Does it pay to be nice? Or is there an advantage to being a jerk?
In an interview, the U.S. president ties his legacy to a pact with Tehran, argues ISIS is not winning, warns Saudi Arabia not to pursue a nuclear-weapons program, and anguishes about Israel.
On Tuesday afternoon, as President Obama was bringing an occasionally contentious but often illuminating hour-long conversation about the Middle East to an end, I brought up a persistent worry. “A majority of American Jews want to support the Iran deal,” I said, “but a lot of people are anxiety-ridden about this, as am I.” Like many Jews—and also, by the way, many non-Jews—I believe that it is prudent to keep nuclear weapons out of the hands of anti-Semitic regimes. Obama, who earlier in the discussion had explicitly labeled the supreme leader of Iran, Ayatollah Ali Khamenei, an anti-Semite, responded with an argument I had not heard him make before.
“Look, 20 years from now, I’m still going to be around, God willing. If Iran has a nuclear weapon, it’s my name on this,” he said, referring to the apparently almost-finished nuclear agreement between Iran and a group of world powers led by the United States. “I think it’s fair to say that in addition to our profound national-security interests, I have a personal interest in locking this down.”
Singapore’s mind-bending logical riddles are so last month. Enter: Vietnam, the latest country to be swept up in what could easily be known as “the viral-math epidemic of 2015.”
This one might even trump its Singaporean predecessor, which became a global legend earlier this year. That quandary, for those who aren’t familiar with it, asked fifth-graders to figure out the birthday of a certain “Cheryl,” who gave two of her friends—“Albert” and “Bernard”—a list of 10 possible dates. She then privately told Albert the month, and Bernard the day. (“Albert: I don’t know when Cheryl’s birthday is, but I know that Bernard does not know too. Bernard: At first I don’t know when Cheryl’s birthday is, but I now know. Albert: Then I also know when Cheryl’s birthday is.”)
Advocates say that a guaranteed basic income can lead to more creative, fulfilling work. The question is how to fund it.
Scott Santens has been thinking a lot about fish lately. Specifically, he’s been reflecting on the aphorism, “If you give a man a fish, he eats for a day. If you teach a man to fish, he eats for life.” What Santens wants to know is this: “If you build a robot to fish, do all men starve, or do all men eat?”
Santens is 37 years old, and he’s a leader in the basic income movement—a worldwide network of thousands of advocates (26,000 on Reddit alone) who believe that governments should provide every citizen with a monthly stipend big enough to cover life’s basic necessities. The idea of a basic income has been around for decades, and it once drew support from leaders as different as Martin Luther King Jr. and Richard Nixon. But rather than waiting for governments to act, Santens has started crowdfunding his own basic income of $1,000 per month. He’s nearly halfway to his his goal.
This weekwe have photos of an 80-foot-high tire in Michigan, dozens of Siberian students smashed into a car, two volcanic eruptions, yet another nail house in China, synchronized swimmers in a pond at the Chelsea Flower Show, a view from the top of the 104-story One World Trade Center, cows on the beach along the Mediterranean, a solar halo above Mexico, and much more.
In any case, people have probably heard the phrase in reference to something gone awry at work or in life. In either setting, when the shit does hit the fan, people will tend to look to the most competent person in the room to take over.
And too bad for that person. A new paper by a team of researchers from Duke University, University of Georgia, and University of Colorado looks at not only how extremely competent people are treated by their co-workers and peers, but how those people feel when, at crucial moments, everyone turns to them. They find that responsible employees are not terribly pleased about this dynamic either.
Why agriculture may someday take place in towers, not fields
A couple of Octobers ago, I found myself standing on a 5,000-acre cotton crop in the outskirts of Lubbock, Texas, shoulder-to-shoulder with a third-generation cotton farmer. He swept his arm across the flat, brown horizon of his field, which was at that moment being plowed by an industrial-sized picker—a toothy machine as tall as a house and operated by one man. The picker’s yields were being dropped into a giant pod to be delivered late that night to the local gin. And far beneath our feet, the Ogallala aquifer dwindled away at its frighteningly swift pace. When asked about this, the farmer spoke of reverse osmosis—the process of desalinating water—which he seemed to put his faith in, and which kept him unafraid of famine and permanent drought.