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Monday, July 01, 2013

The Unemployed Need and Deserve Our Help

Three on unemployment. First, we still have a jobs crisis, but Congress has turned its back on the unemployed:

Full Employment: The Big Missing Piece, by Jared Bernstein: While some important parts of the current economy are showing strength — housing, energy extraction, corporate profitability — demand for labor, or “job creation” if you prefer, remains weak. That’s a huge problem because most of us depend on our paychecks, not our stock portfolios, so the fact that there’s still about 12 million unemployed (including four million who’ve been jobless for over half a year) in addition to about eight million involuntary part-timers (who want more hours, and can’t find them) should give one pause before declaring all clear on the economic front.
Weak labor demand plays an integral role in these outcomes, but too much of the rhetoric I’ve been hearing lately ignores that reality. In the immigration debate — and I’m a longtime active supporter of comprehensive reform — advocates in both parties argue that there are lots of job slots waiting to be filled, if only we had greater labor supply. This claim is most commonly made regarding high-skilled workers, like programmers, but one advocate recently wrote a commentary arguing that we also face a shortage of low-wage workers. Anyone with even cursory knowledge of employment or especially wage trends among such workers knows that this is not a credible claim.
It’s even worse over in the poverty debate, where contentions about the safety net, a topic I wrote about last week, suggest that the jobs are there for the taking if only SNAP (food stamps) and other benefits weren’t removing the incentives for low-income people to look for work. ...
I suspect that most objective observers will agree that full employment — strong labor demand, substantial job creation — is a (I’d say “the”) key economic, social, and poverty policy that’s missing from the current agenda. ...

Second, household income is not recovering (unless you are at the top of the income distribution). From the WSJ:

Four years into recovery, parts of the economy have strengthened but real median household income remains below prerecession levels.

Finally, also from the WSJ:, helping the unemployed does not destroy the incentive to work:

Are extended unemployment benefits leading to higher rates of long-term unemployment? A new paper from the Federal Reserve Bank of Boston suggests the answer is “no”—or at least, “not much.” ...

    Posted by on Monday, July 1, 2013 at 11:11 AM in Economics, Unemployment | Permalink  Comments (20)

          


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