‘Lazy unemployed’ last recourse of the bankrupt politician
Notions of typical long-term jobless in US fails to match facts
Junior United States Senator for Kentucky Rand Paul: Peddling a fantasy at odds with the evidence. Photograph: Doug Mills/New York Times
Back in 1987, my Princeton colleague Alan Blinder published a very good book titled Hard Heads, Soft Hearts. It was, as you might guess, a call for tough-minded but compassionate economic policy.
Unfortunately, what we actually got – especially, although not only, from Republicans – was the opposite. And it’s difficult to find a better example of the hard-hearted, soft-headed nature of today’s Grand Old Party than what happened last week, as Senate Republicans once again used the filibuster to block aid to the long-term unemployed.
What do we know about long-term unemployment in America?
First, it’s still at near-record levels. Historically, the long-term unemployed – those out of work for 27 weeks or more – have usually been between 10 and 20 per cent of total unemployment. Today the number is 35.8 per cent. Yet extended unemployment benefits, which went into effect in 2008, have been allowed to lapse. As a result, few of the long-term unemployed are receiving any kind of support.
Second, if you think the typical long-term unemployed American is one of Those People – non-white, poorly educated, etc – you’re wrong, according to research by the Urban Institute’s Josh Mitchell. Half of the long-term unemployed are non-Hispanic whites.
College graduates are less likely to lose their jobs than workers with less education, but once they do they are actually a bit more likely than others to join the ranks of the long-term unemployed. Moreover workers older than 45 are especially likely to spend a long time unemployed.
Third, in a weak job market, long-term unemployment tends to be self-perpetuating, because employers in effect discriminate against the jobless. Many people have suspected that this was the case, and last year Rand Ghayad of Northeastern University provided a dramatic confirmation.
Ghayad sent out thousands of fictitious CVs in response to job advertisements and found that potential employers were drastically less likely to respond if the fictitious applicant had been out of work more than six months. This was the case even if he or she was better qualified than other applicants.
What all of this suggests is that the long-term unemployed are mainly victims of circumstance – ordinary American workers who had the bad luck to lose their jobs (which can happen to anyone) at a time of extraordinary labour market weakness, with three times as many people seeking jobs as there are job openings. Once that happened, the very fact of their unemployment made it very hard to find a new job.
So how can politicians justify cutting off modest financial aid to their unlucky fellow citizens?
Some Republicans justified last week’s filibuster with the tired old argument that we can’t afford to increase the deficit. Actually, Democrats paired the benefits extension with measures to increase tax receipts. But in any case this is a bizarre objection at a time when federal deficits are not just falling, but clearly falling too fast, holding back economic recovery.
For the most part, however, Republicans justify refusal to help the unemployed by asserting that we have so much long-term unemployment because people aren’t trying hard enough to find jobs, and that extended benefits are part of the reason for that lack of effort.
People who say things like this – people like, for example, junior United States Senator for Kentucky Rand Paul – probably imagine that they’re being tough-minded and realistic. In fact, they are peddling a fantasy at odds with all the evidence.
For example: if unemployment is high because people are unwilling to work, reducing the supply of labour, why aren’t wages going up?
But evidence has a well-known liberal bias. The more their economic doctrine fails – remember how the Federal Reserve actions were supposed to produce runaway inflation? – the more fiercely conservatives cling to that doctrine. More than five years after a financial crisis plunged the western world into what looks increasingly like a quasi-permanent slump, making nonsense of free-market orthodoxy, it is hard to find a leading Republican who has changed his or her mind on, well, anything.
And this imperviousness to evidence goes along with a stunning lack of compassion.
If you follow debates over unemployment, it’s striking how hard it is to find anyone on the Republican side even hinting at sympathy for the long-term jobless.
Being unemployed is always presented as a choice, as something that only happens to losers who don’t really want to work. Indeed, one often gets the sense that contempt for the unemployed comes first, that the supposed justifications for tough policies are after-the-fact rationalisations.
The consequence is that millions of Americans have, in effect, been written off – rejected by potential employers, abandoned by politicians whose fuzzy-mindedness is matched only by the hardness of their hearts.