Felix Salmon digs out some interesting data from David Leonhardt’s most recent column, finding that (a) only 13.2% of the population was unemployed at some point in 2008 and (b) real wages are actually increasing for those who are
unemployed, which is unusual for a recession. Item (a) is troubling, because it means that people who were unemployed during 2008 tended to be unemployed for a long period of time; that is, rather than there being a large number of people, each of whom was unemployed for a short period of time, there was a smaller group of people, each of whom was unemployed for a longer period of time, on average.
People who are unemployed for long periods of time run the risk of becoming, in effect, unemployable for one reason or another. Quite simply, our system is not set up to handle a large unemployable class. As Felix Salmon puts it:
The problem is that persistent unemployment at or around 10% is unacceptable in the U.S., especially with the social safety net being much weaker here than it is in Europe. Leonhardt is right that Euro-style safety nets aren’t particularly innovative, but they do at least keep people housed and clothed and fed and living outside poverty — reasonable expectations for anybody to have, I think, in the richest country in the world. If David Leonhardt can’t think of any bright ideas for solving the persistent-unemployment problem, then the chances are such solutions aren’t going to magically appear. Which means we need to help the long-term unemployed, rather than simply ignore and forget about them.
When people write “cheer up, the recession will just makes us less materialistic” or “everybody will find work once the economy turns around”, they’re simply wrong. In this recession, there are people who have fallen and can’t get up. If we have any decency as a society, we’ll at least think about how to give them a hand.