(Op-Ed) The Long-Term Unemployed Are Doomed

[Zaune]

Slate.com

There had been a fair amount of buzz around the idea that the budget mini-deal being hashed out between Paul Ryan and Patty Murray might include some extra money to extend unemployment insurance benefits for the long-term unemployed. But Republicans didn't like the idea, and Democrats didn't want to bust up the deal over it, so now folks who've been jobless for an extended period of time are going to lose their benefits at the end of the year.

One consequence of this is that the unemployment rate will almost certainly go down, since some fairly substantial fraction of the long-term unemployed will just stop looking for a job and drop out of the labor force. If you're long-term unemployed, then almost by definition looking for work has not been very successful at getting you work. What it has gotten you is a UI check. Take away the check, there's no point in bothering, and so the denominator in the unemployment rate falls and thus the unemployment rate falls.

The bad news is that the long-term unemployed are screwed.

In effect, when companies are looking to hire people, they scan through the résumés they get in the mail and their first step is to throw out all the résumés of people who've been unemployed for a long time. This is research based on pretty well-designed experiments that control for other variables beyond long-term unemployment. You should feel free to see that as a vile form of discrimination, or as a sensible business heuristic according to your temperament. The point is that the people who are about to lose UI benefits are not going to be able to find jobs. Not today, not after they lose benefits. In fact, they probably won't be able to find jobs ever.

Mailing unemployment insurance checks to people who aren't so much unemployed as unemployable is obviously not an ideal public policy. But simply doing nothing for them is cruel and insane. The time-tested way of re-employing a large mass of long-term unemployed is to fight a major world war with Germany and Japan. The circumstances of mobilizing for major armed conflict in 1940–42 proved that when you really want to put people to work, it can be done. So it's always possible that the Senkaku Islands will come to the rescue. But large-scale armed conflict has a lot of offsetting negative consequences. What we need are targeted "mobilization" programs that don't rely on the outbreak of an enormous war. That would take, I think, two major forms.

One is direct government hiring of the long-term unemployed to do some kind of public service work. Making this happen would require you to go outside the standard civil service and federal contracting frameworks, which obviously neither civil servants nor federal contractors are going to like. But it has the job-creating punch of a major war without all the death and destruction. The other is relocation assistance. The metropolitan areas of Bismarck, Fargo, Grand Forks, Sioux Falls, Ames, Iowa City, Lincoln (Neb.), Midland, Burlington, Mankato (Minn.), Logan, Rochester (Minn.), Billings, Dubuque, Morgantown, Odessa, Rapid City, Omaha, Waterloo (Iowa), Columbia (Mo.), and St. Cloud all have unemployment rates below 4 percent. Those are the kind of places where the labor market is tight enough that discrimination against the long-term unemployed shouldn't be a major factor. There's work to be done in these towns, and evidently most people are reluctant to move to small isolated cities in extremely cold locations (also Midland, which isn't cold). Grant programs to connect the long-term unemployed with job opportunities on the Plains and offer financial assistance for relocation could do a lot of good.

Alternatively, we could keep paying UI checks.

But we're not going to do that. And we're not going to do relocation assistance. And we're not going to do direct hiring and public works. We're going to do nothing. We're going to tell people to go out and look for work, even though employers looking to hire can still afford to be very choosy and generally refuse to even consider the long-term unemployed as job applicants. The country failed these people first by letting the labor market stay so slack for so long that they became unhirable, and now we're going to fail them again.

Know what I want for Christmas? A bottle of whiskey and a pistol with one bullet.

[Dr. Trainwreck]

But being on the dole is awesome. I'm certain that once the gubmint money is cut a job will magically spawn and a freemarket unicorn will pick you up by the bootstraps and drop you there, with rainbows and triumphant music and shit.

[Purple]

Actually, all the unemployed will starve to death and thus unemployment will cease to be a factor.

[The Romulan Republic]

Too pessimistic. The situation is bad, but bad economies don't last forever and the future is difficult to predict.

The article is not completely wrong, but it is too negative and suggests no solution except things it says suck or won't happen, so it ends up being gratuitous cynicism. Saying everything's hopeless is pointless.

I say this as someone who has never had a full-time job. The last thing I need is to see someone pontificate about how hopeless my life is.

[AMT]

To be fair the study it's based on kinda helps set the pessimistic mood. Without any changes in the way HR departments within businesses work, what would make this change, beyond government intervention.

[PhilosopherOfSorts]

Is it time for a huge, federal infrastructure project? I think its time for a huge, federal infrastructure project. Put a bunch of people to work building new roads and bridges. Or a space elevator. Or just a big thing, it could be a mile-high statue of John Wayne, for all I care, as long as its a big thing for people to work on.

[AMT]

Is it time for a huge, federal infrastructure project? I think its time for a huge, federal infrastructure project. Put a bunch of people to work building new roads and bridges. Or a space elevator. Or just a big thing, it could be a mile-high statue of John Wayne, for all I care, as long as its a big thing for people to work on.

That would require the government spending money and it only does that when it can pander to big business interests.

[Replicant]

Is it time for a huge, federal infrastructure project? I think its time for a huge, federal infrastructure project. Put a bunch of people to work building new roads and bridges. Or a space elevator. Or just a big thing, it could be a mile-high statue of John Wayne, for all I care, as long as its a big thing for people to work on.

That would require the government spending money and it only does that when it can pander to big business interests.

Not to mention, it doesn't work. All you do is give them temporary jobs, you still need to do something to create real jobs that they can move to when your John Wayne statue is done.

[The Romulan Republic]

It would solve a problem the article talks about (people not being hired because they've been unemployed for a long time).

[Zaune]

And even if it doesn't, and I can just imagine HR departments deciding that government make-work projects should be treatedas another kind of unemployment, temporary jobs still put money in the hands of people with an incentive to spend it. If they blow it all on booze and plasma TVs and new cars? Fucking great! Retail and what's left of the manufacturing sector get a much-needed boost that might just become self-sustaining if we're lucky. (Except in the UK where retail decided to commit suicide long before the recession started to bite, but heigh ho.)

[The Romulan Republic]

Does anyone know how employers tend to view self-employment? I'm a freelance writer and photographer, and while I can't support myself doing it, I hope that it will look better than no work.

[Zaune]

Depends what you're applying for, I expect; some places might regard you as unsuitable because it would be harder to browbeat you into accepting unreasonable and/or illegal working conditions with the threat of the sack.

[Simon_Jester]

Know what I want for Christmas? A bottle of whiskey and a pistol with one bullet.

[Sighs]

At least it'd put an end to the drama queening...

Actually, all the unemployed will starve to death and thus unemployment will cease to be a factor.

A lot of the long-term unemployed will fall back on friends, relatives, and loved ones- which is one of the knock-on consequences of unemployment; it damages the financial resources of the people who don't lose their jobs but want to take care of their family.

Not to mention, it doesn't work. All you do is give them temporary jobs, you still need to do something to create real jobs that they can move to when your John Wayne statue is done.

Yes, but it gives them recent employment history and a reference to call and confirm that yes, this guy is in fact reliable and competent enough to be worth hiring.

I think the main reason workplaces don't commonly hire the long-term unemployed is that they see the gap in someone's resume and think "maybe there is a job in there which they fucked up royally, we don't want to be fuckup number two." Or maybe that the guy normally comes across as a serial killer and it's only this time that he appears normal, which would explain all those job interviews he's presumably failed.

And even if it doesn't, and I can just imagine HR departments deciding that government make-work projects should be treatedas another kind of unemployment, temporary jobs still put money in the hands of people with an incentive to spend it.

It doesn't work that way, because the government programs in question are typically hiring people to do things like construction work, under conditions broadly comparable to normal employment, which means the HR department has no incentive to do so. Because, again, they at least have a boss who they can call up and ask "is this guy a pothead?"

HR departments aren't actually cartoon villains; they're heartless jerks who have a very specific job to do: "hire people we want working for us, and don't hire fuckups." In a high-unemployment economy they can afford the luxury of anti-fuckup procedures that, as a side effect they don't care about, make it very hard to find a job after a prolonged period of unemployment. But they're not doing it because it makes it hard to find a job after prolonged unemployment.

Does anyone know how employers tend to view self-employment? I'm a freelance writer and photographer, and while I can't support myself doing it, I hope that it will look better than no work.

Depends what you're applying for, I expect; some places might regard you as unsuitable because it would be harder to browbeat you into accepting unreasonable and/or illegal working conditions with the threat of the sack.

Or, they might go "well, this guy has experience doing exactly the kind of stuff we do, and we know he's self-motivated because he was at least marginally successful doing it without any boss to yell at him!"

[Zaune]

Simon, much as I like and respect you...

When you've spent half as long as I have shooting off job applications and not even getting the courtesy of a form-letter saying "thanks but no thanks", you may offer criticism of my lack of a positive mental attitude. Until then, cram it.