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Why we’re going to stop caring about the unemployed — Pop Economics

Why we’re going to stop caring about the unemployed

by Pop on March 11, 2011

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The difficulty with an improving economy

Every once in a while, I run across a comment on a blog or news story that reads something like this: “If you’ve been unemployed for more than a year, you’re not looking hard enough.”

It’s mean, but I’m sure the writer believes what he says. They probably have a job and run across “Help Wanted” signs every once in a while, and can’t reconcile that with the fact that more than 6 million people have been out of work for more than 26 weeks.

But now the jobless face another problem. If you do have a job right now, you have more job security than at any time in the last decade.

On Friday, the Labor Department released its monthly report on the number of openings, hirings, and firings that employers posted in January. It’s a little different than the regular unemployment report that comes out at the beginning of the month. That one tells you how unemployment overall moved in the previous month. Whereas this one tells you how much hiring and how much firing added up to the overall unemployment figure.

The last few months of reports have been mostly the same. Firings have basically stopped. In fact, they’re at their lowest point since the government started tracking them in 2000. But hirings haven’t picked up at all, which leads to this worrisome conclusion (as stated by an analyst): “Generally speaking, all the data seem to suggest that if you already have a job, the labor market probably doesn’t seem so bad, but if you’re looking for a job, there’s been almost no job market improvement over the last few years.”

In other words, if you have a job, this economy doesn’t feel so frightening anymore. If you don’t, it’s still scary as hell.

When long-term unemployment becomes a fact of life

America’s traditionally been a country with rapid layoffs but rapid hiring. You’d be much more likely to lose your job at any given moment, relative to a country like France. But unlike the French, an unemployed American could get his job back quickly.

In fact, unemployment in countries like France, Greece, and Spain has been at 8% or so or higher for years. And at any given time, most of those people tend to have been out of work for more than six months.

Yet, you don’t get the sense of urgency in fixing the problem that you get here. At one point, unemployment stopped getting worse in those countries, and the governments and populace settled into complacency. Maybe 8% unemployment was as good as they could do.

We don’t yet know when and if the job-creation machine will revive in the U.S. But we’re already starting to see congressmen and some economists declare that the government can’t continue extending help to the long-term unemployed in the name of fiscal austerity.

It’s going to be much easier for them to focus on the debt if the average man on the street no longer fears that he’ll lose his job.

Unemployment is moving from “our” problem to “their” problem.

I have a job. And that BLS report I referenced tells me that job’s safer than it has been in 11 years. So now, unemployment isn’t so much an imminent threat that I want government to urgently address, but the problem of an ambiguous group of people who I only know through friends of friends or family.

Pretty soon, simply telling people that the unemployment rate is 9% isn’t going to make people bat an eyelash, and I wouldn’t be surprised if some politicians or jobseeker services start taking a lesson from foreign NGOs.

Are you more heartbroken by the estimated 925 million people who lived in hunger in 2010, or by this?

I

It’s no accident that the narrator said the name “Michelle” six times. No accident either that once you start giving, you’ll get a picture of the child and updates on his or her progress.

Economist George Loewenstein and Deborah Small ran an experiment where they presented potential donors a letter that requested money for a house being built for a family by Habitat for Humanity. In one version of the letter, which described the families, they were told that the family “will be selected” for the home. In the other version, they were told that the family “has been selected” and was just waiting for the donation.

Donations to the home for the family that “has been selected” were significantly greater. The reason? The economists think that making the beneficiary concrete and identifiable was all it took to pump up the giving.

I hope it doesn’t reach the point that we need to run commercials with panicked jobseekers in order to keep them in the public consciousness. But as time goes on, let’s not forget that one in 10 of the people we pass on the street every day are probably out of work.

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{ 8 comments… read them below or add one }

Andrew March 12, 2011 at 5:48 am

Good points. As I see it, another problem is the way that BLS figures the unemployment rate. First, many people think BLS uses the number of people collecting unemployment insurance. But as you know, they don’t; instead they do a random survey of 60k homes. Anyone who says he hasn’t found work in 9 months or hasn’t sent out a resume in 4 weeks is considered, “not in the workforce.” By using this method, BLS keeps reporting a dropping unemployment rate as it actually rises. I fear that this leads to the feeling that the situation is not so bad and that many of these people are lazy or don’t really want a job, which could not be further from the truth.

Rob Bennett March 12, 2011 at 8:55 am

I certainly don’t think that the reason that people are unemployed is that they are lazy. But I also don’t think it’s quite so that one out of ten people we pass on the street is unemployed. Thinking about it that way suggests that unemployment hits randomly and it doesn’t. There are people (some through some fault of their own, some through no fault of their own) who have found the services they offer not to be in big demand.

I see this as being a result of how dynamic our economy has become. In this sense, unemployment is actually a good sign. It means that we are changing (let’s hope improving) quickly. We must get those people employed again quickly. But I don’t think that the answer is always to send the unemployed a check. I see that as a limited-thought solution. We need to aim for more effective solutions to the problem created by a dynamic economy than that.

Rob

Anonymous March 15, 2011 at 8:05 am

It’s ads like that that make me think we’re never going to solve our global cooperation problems. I wish we could practice being empathic to numbers like 10^7 rather than individuals we feel we “know.” Alas.

This reminds me of a recent charity I learned about–seeyourimpact.org. It’s a start. I imagine it’s still a little hopeless against pesky problems like climate change and pseudo-structural unemployment.

Anonymous March 15, 2011 at 8:12 am

As a small follow-up on the previous point, perhaps saturating people with ads like that is the only way to solve these kinds of problems.

Good supplements might be encouraging international travel and testosterone reduction (http://www.sciencedaily.com/releases/2011/02/110209105556.htm). In all seriousness, increasing the representation and sociopolitical influence of women might help us change our population’s typical planning horizon.

Kathy March 16, 2011 at 1:05 pm

I went through a hellish period of unemployment for three years between 1997 and 2000, and so, even though I seem to be well out of the woods by now?…. I will NEVER … repeat, NEVER ….. forget the unemployed!!!

I KNOW what it’s like! and anybody who could forget them, has never honestly had to deal with the problem.

krantcents March 16, 2011 at 7:57 pm

Whether the unemployed are remembered or not, we are in a jobless recovery. It appears there will be many unemployed for quite a while, because older workers are not retiring thanks to the down turn in the market and economy.

Stephen Robbins May 19, 2011 at 4:32 pm

@Rob Bennett: I think I am in the same general perspective basket. Sending checks to the unemployed or feeling bad for them isn’t going to get them a worthwhile job, and that is what they NEED more than a week or two from now. What they NEED, at heart, is employed training (so they get an income again, and are getting skills with which they can once again be productive members of society).

The major problems and hurdles I see to this include the economic aspect [why should an employer higher and train one of the long-term unemployed instead of a recent graduate?] and the psychological aspect [how can we as a society convince the long-term unemployed to stop being discouraged, to stop settling for less, and to DO something -- move geographically, learn new skills, change careers or industries -- that is wage-valuable today?]. I wouldn’t call the problem insurmountable quite yet, but reintegrating the long-term unemployed into the wider economy is a daunting challenge that we will have to face or suffer the costs (e.g. these people will become penniless seniors demanding medicare and social security if nothing changes).

MariaN May 26, 2011 at 8:37 am

I am so pleased to have found this blog. I am in the UK, Pop, and long term unemployment is becoming a reall issue here; particularly in the 17-24 age group. Here we have been neo-liberals for sometime now and the message has been that ‘the solution to the problem of the unemployed is a problem of the unemployed themselves’.

One expression of this is the so called ‘employability’ agenda brought about by the former Labour Government. Its messages are two: a) get some education and you will get a job; and b) universities are not doing their job. The result is the duping of large cohorts of young people to go and get vocational training parading as university education (at a high cost) and most universities being pushed into providing vocational training. Academics as usual got caught into defining what makes people ‘employable’ rather than hitting the very premise of this assumption.

BTW, as a sociologist I find economists very good people to have a good discussion with. And behavioural economics is fascinating, I agree.

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