Little federal help for the long-term unemployed
The New York Times
By: Annie Lowrey & Catherine Rampell
November 1, 2012
WASHINGTON -- In the economy-focused presidential campaign, the two candidates and their teams have scarcely mentioned what economists describe as not just one of the labor market's most pressing problems, but the entire country's: long-term unemployment.
Nearly five million Americans out of work for more than six months are left to wonder what kind of help might be coming, as the Federal Reserve, the International Monetary Fund and a bipartisan swath of policy experts implore Washington to act -- both to alleviate human misery and to ensure the strength of the economy.
The pain of the long-term unemployed has persisted even as the overall jobs picture has brightened a bit and the unemployment rate has fallen to 7.8 percent. The new government report for October was due to be released on Friday morning.
"The problem is incredibly urgent," said Kevin A. Hassett, director of economic policy studies at the American Enterprise Institute and an adviser to Mitt Romney's campaign. "Spain had a financial crisis in the late 1970s and has never seen its unemployment rate drop back to where it was before that crisis. The unemployed become discouraged, and ultimately the employment to population ratio might take a permanent hit."
On the agenda for the next Congress and the next president is ensuring that the unusually long spells of unemployment now afflicting jobless workers remain a temporary setback of the recession.
Economists warned that long-term unemployment could be transformed in the next few years into structural unemployment, meaning that the problem is not just too few jobs and too many job seekers, but a large group of workers who no longer match employers' needs or are no longer considered employable.
"Skills become obsolete, contacts atrophy, information atrophies, and they get stigmatized," said Harry Holzer of Georgetown University.
That has been the experience of millions of workers like Beatrice Hogg, 55, of Sacramento, a college-educated white-collar worker who has slid from the middle class into poverty.
Her last job -- doing administrative work and advising students at a community college -- ended in June 2009. Her unemployment benefits ended more than a year ago. She was evicted from her apartment in December and has been staying at friends' homes and occasionally at train stations. Despite her efforts, she has been turned down for job after job after job, and is surviving on food stamps.
"I don't enjoy being out of work," Ms. Hogg said in an interview. "I don't enjoy having to ask friends to give me rides or get things for me. I want to take care of myself. I've been on my own since I was 18 years old. It's hard for me. It's demoralizing. It's hard to ask people for things when you've been independent the rest of your life."
Stronger economic growth may help to whittle the ranks of the long-term unemployed over time, experts said.
"There must have been a lot of workers badly scarred by long bouts of unemployment in the Great Depression," said Gary Burtless of the Brookings Institution. "Even in 1939 we had unemployment somewhere around 14 percent, as we'd measure it today. A lot of people who were jobless had been jobless for a long, long time. But in the space of a couple of years those disadvantages looked like nothing given that employers had voracious appetites for workers."
But many economists contended that policies to help the long-term unemployed are needed as well, to ensure that they have the skills necessary to compete for the jobs that the economy is adding -- turning construction workers into oil-and-gas extractors and administrative assistants into home health care providers, for example.
In Washington, many politicians support measures for the long-term unemployed; few demand them.
Both Democrats and Republicans have proposed or supported revamping job-training programs, giving states more flexibility in using funds for the unemployed and providing credits to companies that hire workers who have been out of a job for more than six months, for instance.
The campaigns have offered their preferred policies as well. The White House put out a range of proposals to aid the long-term jobless as part of its stalled American Jobs Act legislation, a few of which made it into a bill extending a payroll tax cut this year. Mr. Romney has proposed, among other measures, creating "personal re-employment accounts" to give funds to unemployed workers for community college or vocational training.
But experts worried about a lack of urgency. Gridlock in Washington, the focus on cutting rather than spending, even the simple fact that discussing the topic can be depressing might leave the issue by the wayside.
"It's not just the heat of the campaign" leaving the topic neglected, said Christine L. Owens, the executive director of the National Employment Law Project, an advocacy group for low-wage workers. "There's a certain kind of fatigue when talking about long-term unemployment, and as a result there hasn't been the level of attention and discussion that's warranted."
For new policies, "there is no political will, none whatsoever," said Daniel Hamermesh, an economist at the University of Texas.
He noted that during the recession and the recovery, relatively few workers have cycled through unemployment.
"There are fewer of us experiencing unemployment, but those who are out are out a lot longer," Mr. Hamermesh said. "They then become increasingly isolated, which decreases the will to do anything, because they are a less important group."
Statistics suggested that the long-term unemployment problem had begun to recede. The number of workers who reported actively seeking a job for more than six months fell to 4.8 million from 6.2 million in the past year, according to government data. The proportion of jobless workers who counted as long-term unemployed fell to 40 percent from its peak of 45.5 percent in March 2011.
But it remains a bleak situation. About 800,000 workers want a job but have simply given up looking, and so are no longer even counted as unemployed. About 1.7 million people have joined the disability rolls since the recession began at the end of 2007, an increase of 24 percent, as workers use the disability program as a backdoor safety net when their unemployment insurance runs out. After searching for a new position for a year, a worker trying to regain employment finds that his chance to do so in the coming month falls below 10 percent.
As seen in the debates and on the campaign trail, the problem has largely fallen off politicians' list of priorities.
When asked directly how to alleviate long-term unemployment in the second debate, Mr. Romney addressed joblessness in general before quickly switching topics to the Detroit auto bailout. Mr. Obama never addressed the question at all.
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