9
The long-term effects of a jobless economy
A job seeker listens to a potential employer at a career fair in Denver, Colo.
To view this content, Javascript must be enabled and Adobe Flash Player must be installed.
Kai Ryssdal: So let's say the arguments Bob Reich was just making don't carry the day. That 9 percent unemployment or maybe something a little bit less becomes the new normal. What happens then? Not in a gross domestic product way, but in a people way.
Don Peck of The Atlantic magazine writes about that in his new book "Pinched." Good to have you with us.
Don Peck: It's my pleasure, Kai.
Ryssdal: I want to start with something you wrote in The Atlantic about a year, year and a half ago, that we talked about on the show at the time. You say that there's unemployment -- you know, regular old unemployment -- and then there's unemployment, that really lasts and endures. What's the difference, and what does that look like?
Peck: Well I mean, Rutgers actually just did a poll (PDF) of people who'd been unemployed for more than seven months, which is less than the average duration of unemployment in the U.S. today, and they found that more than half of the respondents were withdrawing from friends, were reporting stressful marriages, were not sleeping regularly. Fifteen percent had acquired a substance abuse habit. When you have a situation where people just can't find work month after month, it changes them. Being unemployed for more than six months is about the worst thing that can happen to you. Psychologically, it's equivalent to the death of a spouse and is a kind of bereavement in its own right.
Ryssdal: Does it change depending on how old you are? And I ask because I'm thinking for some reason of young people in this economy and all the research that shows, you know, if you don't get a job out of college, you pay the price your whole life in a wage gap and in upward mobility and all of that.
Peck: People who struggle early in bad jobs or in no jobs because of a weak economy not only start behind, they never fully catch up, even 10, 15, 20 years later. They're making less than they otherwise would have, and they're stuck disproportionately in low-status jobs.
Ryssdal: We are, you know, depending on who you talk to, halfway through a lost decade -- we're five years in. How much longer do we have before it's too late to change some of these effects?
Peck: Well, we're already seeing changes. Our politics have become meaner in this period; anti-immigration sentiment has swelled; support for the poor has diminished. These things are all common in periods like this.
Ryssdal: When you say politics get meaner, you don't mean the Republicans and Democrats yell at each other more. You mean that there is a cut to benefits for people in need, there's anti-immigrant sentiment, there's all of that stuff.
Peck: When times are hard for long periods of time, it actually becomes harder and harder for the government to engage in creative, large-scale public actions, really to get much of anything done, because the entire atmosphere -- regardless of Republican versus Democrat -- becomes poisoned by a sense of discontent, insecurity for people in office. And that's yet another risk of this period.
Ryssdal: Well, let me end, then, with a question about those policies and the idea that personal conservatism when the economy is rough and when these things happen, leads to larger national conservatism. That people want the government to be counting their pennies as well, like regular people have to. And what that might mean for, say, the president's speech tomorrow night, and any real chance of stimulus?
Peck: It makes me somewhat skeptical that the stimulus will happen. When you look at prior recessionary periods: in 1936, people were likewise concerned about growing government debt. The government did actually slash spending, raise taxes in 1937, stock market crashed, unemployment went up again, and we had another five years of depression. So it's kind of a natural psychological reaction after a bubble bursts to become more personally conservative, to become adverse to risk and to debt of any kind. So what we're seeing now, what we've seen over the past few months, is really quite natural, but it's also quite counter-productive. And all we can do is try to guard against that.
Ryssdal: Don Peck, he's a features editor for The Atlantic magazine. His book is called "Pinched: How the Great Recession Has Narrowed Our Futures and What We Can Do About It." Don, thanks a lot.
Peck: Thank you, Kai.
I agree with Jeremy. Being jobless for over six months can be hard, I'm sure, but if it is the emotional equivalent of losing a spouse for somebody, that person might need to work on their priorities. Where did that information come from? I know someone who was unemployed for a number of months, and it was for two very specific reasons: 1) he was not branching out and looking at jobs that he normally would not consider, and 2) he was a little embarrassed, and didn't talk about his lack of job openly. Recently, he got a job he loves, but it is one that he never would have thought of on his own. The only reason he got it, was because he started talking about unemployment with people, one of those people knew someone who was hiring, and voila! A great job. As counterintuitive as it might seem, it's important to spread the word.
I was unemployed for a while after a bad job in the early 2000s. I was trying some things as an entrepreneur, not very successfully, but the stigma of unemployment is there, and I find the need to explain everytime I have a job interview what I was doing for that period of time. Funny thing, though, I was apparently trying to do the thing that our politicians are now proclaiming we should all do: take a risk, start a business!
But, do you know what I found? Very little support from any government programs, and every vulture lined up around the block to take what little I had left.
I really feel for the people who have been unemployed long-term in this economy, and I do understand what a blow to your confidence having to explain that can be. Our whole culture ties up our identity, for good or bad, into our job, and not having one marginalizes you. Worse, when you look for work, somehow, no matter how qualified you are, the fact that you were out of work is suddenly a black mark.
The government will have to address these long-term unemployed individuals first, hopefully by putting them to work, so that we can get everyone moving in a productive direction.
Thanks for this great story.
Really? Losing your spouse and being unemployed are psychologically equivalent??? "Being unemployed for more than six months is about the worst thing that can happen to you. Psychologically, it's equivalent to the death of a spouse and is a kind of bereavement in its own right."
@Cruise
Well said. I am from Bangladesh and recently visited for a month. Almost everyone is fending for themselves in the midst of abject poverty and misery. About the air we breathe: A few years ago the air quality index had reached such a bad state that the government decided to ban two stroke engines and institute a process for converting vehicles to accept compressed natural gas. Left to folks' own wishes this conversion would NOT have happened. It needed infusion of money and government intervention together with police enforcement for it to work.
@Lovelace
You do physically drive to work don't you? And you do physically breathe air, right? I think you need to visit Bangladesh or Hong Kong and see what happens when government doesn't provide for people's *day-to-day* physical needs. Everyone benefits from government programs.
Do you have any facts, evidence or proof that "private charity works as well as government action"? Or is this just Tea Party rhetoric? Last time I checked, the "price" of attending a Church sponsored soup kitchen, was the onslaught of religious pandering by the incumbent clergy. Is it really charity if there is a price to pay?
As for your comments on the government spending not helping the Great Depression, who funded the war you refer to? I mean, *who* spent the money to ship soldiers and tanks to Europe? And *who* spent the money to create supplies and weapons for them? Wasn't it the government? So by your own admission, the government spending did solve the Great Depression. But only after everyone unified behind the spending, and put down their "left vs. right" rhetoric, and moved forward on the goal of spending for a common cause. Either way you look at it, it was government spending.
You see "cuts to benefits for people in need," I see "cuts to programs that shouldn't exist in the first place." It is not, and never *has* been, the proper function of government to provide for people's day-to-day physical needs. When they can't provide those things themselves, private charity works just as well as government action---except for the disadvantage from the Left's point of view that it doesn't provide a class of reliable far-Left voters, it usually doesn't provide for the physical needs of those who *can* but *won't* provide for themselves, and it doesn't provide the incentives for people to keep relying on it and contributing to the perpetual "crisis" the Left requires to stay in power.
And remember, government spending didn't solve the Great Depression; in fact, government intervention turned what would probably have been an ordinary, if somewhat severe, economic downturn into a systemic malaise it took the economic consumption of a war to get us out of.
The major part of the gross domestic product index of growth is consumer spending--the most sacred "job creator." Now I hear defense of government austerity on grounds that governments should save as middle-class people must now do. But as we follow the advice to be prudent and cut down on expenses, we by definition buy less and hence retard growth and employment. It's a pure contradiction. Please ask your commentators to explain how "recovery" from "recession" reconciles these two demands.
Hal Pepinsky, pepinsky@indiana.edu, pepinsky.blogspot.com, 209 St. Pierre St., Worthington, OH 43085-2262, 1-614-433-7386
