Reason #9734 For More Stimulus: Heading Off Long-Term Unemployment

economics
Photo: National Archives

While we all stagger through the pandemic together and marvel at the fact that at least now we have grownups running government together, the monthly unemployment report for January is a reminder that we are still very much in the woods, or maybe at sea, or up to our ass in alligators while we try to drain the post-Trump swamp (but that's an environmentally unsound metaphor anyway; wetlands need protection). What we are getting at here is that while some of the news is good — overall unemployment is down a bit, to 6.3 percent, and the economy added 49,000 jobs — the economy is still in bad, bad shape because of the pandemic.

And as a very good piece at Politico points out, the numbers in one category, long-term unemployment, keep growing. The Labor Department defined "long-term" as someone who's been out of work for more than six months, and as with the Great Recession of 2008-2009, the long-term unemployment numbers are decidedly Not Good:

Two in five jobless Americans — or more than 4 million people — are now classified as long-term unemployed [...] And that total, which rose again in January, is likely an undercount: Combined with another 4 million who have stopped searching for work entirely, roughly one in 20 people who were working a year ago have now been shut out of the labor market for more than six months or dropped out altogether.

That's some seriously bad news for anyone hoping the economy will bounce right back once the pandemic is over, particularly because of the demographics of this recession. It's hit low wage workers especially hard, especially as restaurants and bars have had to close, many of them for good. Those jobs won't just reappear as the virus comes under control, and low-wage workers are less likely than others who've lost jobs to have savings to tide them over. Also, shut up, Republicans, governors ordering lockdowns didn't cause the closures, people stopped going out to avoid getting infected, and just declaring the economy open again won't magically bring the jobs back.

To underscore that, the Congressional Budget Office estimates that we're not likely to see a return to pre-pandemic employment levels until the end of this decade. And that's without a giant asteroid hitting the Earth, or a second Trump term.


As Politico notes, high long-term unemployment can cause a domino effect, not just for individuals but for the economy, "affecting everything from personal savings and future earnings to mental and physical health and even children's well-being." And once the economy starts to improve, people who have been out of the labor market the longest have the most difficulty finding jobs again. They may be deep in debt, and worse, many may have lost their homes.

One study by Princeton University economists after the Great Recession found that only 11 percent of workers who were long-term unemployed in a given month during that downturn had returned to steady full-time employment a year later.

"You think about the problem of getting a long-term unemployed person into a job — this is very hard to do," [AFL-CIO chief economist Bill] Spriggs said. "If you talk about getting a homeless person into a job, it's like, forget it. You've gone from, 'this is a highly difficult thing to do,' to, 'this is almost impossible.'"

This is where we remind you that, like the CARES Act, the Biden stimulus package includes assistance to help people pay their rent, and for states to help people stay in their homes, because keeping people housed in the first place is far less costly than getting homeless folks into housing again.

What to do? Well that's pretty obvious, unless you believe in the tax cut fairy: more spending to tide people over the recession, and that may even mean additional aid beyond the passage of the stimulus package that's currently going through Congress. But even the Biden plan's extension of three emergency unemployment insurance programs will help, Politico notes:

Another extension of unemployment benefits, supporters say, would have the double-barreled benefit of giving jobless Americans money for rent and bills — which studies show they will spend, putting it right back into the economy — while keeping them attached to the labor market, since the program requires workers to continue looking for a job.

And yes, we should have been paying people to stay home from the beginning, which could have done a lot to prevent or at least reduce the fall/winter resurgence of the virus, Jesus H. Christ on a Peloton.

Beyond extending unemployment insurance, there's also the option for government creating jobs. Biden's "MONEY FOR MERICA PLEASE" plan calls for hiring and training a "public health job corps" of 100,000 people to do testing, vaccinations, and contact tracing, and beyond that, his plans for fighting climate change should spark a lot of new jobs in construction, refurbishing old buildings, cleaning up the messes left in fossil fuel communities, and green manufacturing.

In terms of more immediate employment help, Politico calls attention to a proposal by Sen Chris Van Hollen (D-Maryland) — introduced before the pandemic, even — that would provide federal money to employ people for a year at a time in jobs with local businesses, nonprofits, and in government, while also providing other support like child care and job training (and look, you just created childcare jobs, too!), plus internship opportunities and eventual regular employment.

Van Hollen has been talking with members of Biden's economic team about the possibility of adapting his bill into a future stimulus package, and he says they were "receptive" to the idea: "There's strong support. [...] The question is exactly what form that takes, and exactly when."

There are so many good ideas floating around out there that could make Americans' lives better and our economy fairer. And they seem a hell of a lot more effective than imposing arbitrary work requirements for Medicaid, huh?

[Politico / US Bureau of Labor Statistics / WaPo]

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Doktor Zoom

Doktor Zoom's real name is Marty Kelley, and he lives in the wilds of Boise, Idaho. He is not a medical doctor, but does have a real PhD in Rhetoric. You should definitely donate some money to this little mommyblog where he has finally found acceptance and cat pictures. He is on maternity leave until 2033. Here is his Twitter, also. His quest to avoid prolixity is not going so great.

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