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Tuesday, April 19, 2016

Reducing Long-Term Unemployment

My latest column:

Reducing Long-Term Unemployment: Perfect is the Enemy of the Good: One of the most important economic challenges we face is reducing long-term unemployment. Presently, the percentage of people who have been searching for a job for more than 26 weeks is 26.7 percent. That’s down from the peak of 45.5 percent during the Great Recession, but long-term unemployment has been stuck around this percentage for the last 10 months and it is still higher than the previous post World War II peak of 24.9 percent in the early 1980s. 
Long-term unemployment takes a considerable toll on individuals and their families, and it has broader social and economic consequences as well. Yet Congress has all but ignored this problem. Republican opposition to new initiatives of any sort is one reason for the inaction from Congress, but it’s also true that we do not know for sure which type of policy works best. That makes it difficult for those in Congress who do favor action to make a strong case in support of a particular program. ...
This brings up a more general problem with our willingness to try and solve important social problems. We seem to believe that every program the government tries must work with near perfection or it isn’t worth doing. If a social program helps a large number of people, but a few people take advantage of it, those people are used to undermine the program in the eyes of the public. 
If we build a thousand bridges that serve important needs, but one of those is a “bridge to nowhere,” then infrastructure spending is a failure. If unemployment compensation and food stamps help a great number of people, but someone can be found who uses the programs as a way to avoid work, that becomes the focus. Of course we should try and fix the parts of any program that don’t work as intended, but we have to evaluate programs based upon their overall costs and benefits, not on isolated instances of failure. 
The private sector would not meet the standard of perfection many people impose on the government. ...

    Posted by on Tuesday, April 19, 2016 at 07:05 AM in Economics, Fiscal Times, Unemployment | Permalink  Comments (18)


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