UNEMPLOYMENT IS BAD; UNEMPLOYMENT LONG TERM IS REALLY, REALLY BAD!

UNEMPLOYMENT IS BAD; UNEMPLOYMENT LONG TERM IS REALLY, REALLY BAD!

(CNNMONEY, Tami Luhby, Mother Jones)

(Kevin Drum, Reuters, Mike Segar, New York Times)

(Rory O’Sullivan, Emily Jane Fox, Stephen D. Simpson, Frazer Chronicle)

 

An understatement, “unemployment is bad,” “do ya think,” and long term unemployment is “really, really bad.” The question of unemployment is a bug-a-boo that has plagued the U.S. for decades…..on and off. Universally people agree 110% that people out of work, struggling Americans can be worse than any other problem that now faces the country. While economists and academics make convincing arguments that there is a certain natural level of people that are out of work, and it can’t be erased.

I can’t figure that one out…..a natural level of unemployment, what in hell does that mean, a percentage of Americans are going to get the flu every winter, the same as a certain number of people will catch a cold, but a level of people out of work…..and enduring all of the struggles that go along with being unemployed, what in hell is up with that mentality.

Worse yet, most of the costs tied in with unemployment are of the dead loss variety, where there are no offsetting gains to the costs that everybody must bear. No doubt about it, a country which periodically battles double digit unemployment, or close to it will always be scrambling to devise ways to help support those folks that are out of work.

Personal loss to a person who loses his/her job, no matter the reason, aren’t hard to envision, an immediate impact to the standard of living,  loss of buying power, self esteem, a complete loss of an ability to save, and plan for the future. Without exception, the loss of a job is replaced by about 50% of governmental assistance. There also is an erosion of skills and talents the longer that a person is away from his job, actually robbing society of otherwise useful talents.

Long term unemployment leads to forced educational denial for spouses, as well as dependents, therefore depriving society of future work-place skills. Long term unemployment leads to mental and physical health problems which can go unattended because there is usually a lack of health insurance.

There also is a societal cost to long term unemployment, although difficult to calculate, but non-the-less real. When unemployment becomes a pervasive problem, there are often increased calls for protectionism and severe restrictions on immigrations. There is a whole different dichotomy connected with people that are out of work, like not pulling their weight, being poor providers, being satisfied for less, counting on entitlement governmental programs, and actually being lazy.

Of course the economics of unemployment are more obvious when viewed through the lens of the nation’s checkbook. Unemployment leads to higher payments from state and federal governments for unemployment benefits…..in excess of $330 billion dollars, plus food, medical and Medicaid assistance.

WHAT CAN BE DONE TO STEM THE TIDE

Government frets about the consequences of inflation, but unemployment is as serious an issue that is usually overlooked until the situation is either totally out of control…..or close to it. Inflation must have some sort of romantic ring to it that some guy going to the second hand store, and using food stamps at the local grocery

About 70% of what the U.S. economy produces goes to personal consumption, and those people living on the reduced monetary income due to being out of work lowers consumption, and hurts the economy, kind of like a double edged sword. Consumer and business confidence are key to economic recoveries, and workers must feel confident in their future to invest in developing the skills that the economy needs to grow in the future.

Unemployment compensation is way higher then it was designed to be, add the misconception that long term unemployment mostly effects older workers really is only true in certain industries. With the exception of the construction industry, long-term unemployment is fairly distributed across the age and industry spectrum.

With the exception of death, or a debilitating terminal disease, long-term unemployment can be the very worst thing that can happen to an individual today, in the modern world. It’s economically awful, socially disgusting, and a terrible blow to self-esteem and happiness. Being unemployed cuts you off from you’re peer group, stress’s the family, and can lead to divorce, or worse, suicide.

Long-term unemployment usually lasts even after a new job is found…..usually a new job will garner between 50 and 75% of your former paycheck, and the malady of the long-term unemployment can linger for as long as five years.

Cutting off unemployment benefits makes a bad situation worse, and can lead to all sorts of situations that economists and politicians only remotely understand. These whiz kids who devise operating budgets at the local, state, and federal levels seem to always leave one very important equation out of their budgets…..the working man and women who are long-term unemployed.

People habitually want to work, they want to be productive, and they want to consume, but until we get a handle on this long-term unemployment problem, it’ll be an area that we continually struggle with. One thing is for sure, it’s impossible for us to continue to pay billions of dollars in unemployment to those out of work folks.

And cutting the defense budget isn’t an answer (damn it), all that would do would create more people roaming the streets looking for gainful employment.

HAVE A NICE DAY!