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Easy Street

Reporter’s Notebook: The Devastation of Unemployment

Heidi Moore Jun 30, 2011

“This is not a modest rainbow, as this is not a modest town.” Overheard at the Aspen Ideas Festival this week where the affluent and accomplished meet to discuss, among other things, if we can expect a rainbow over the unemployment situation anytime soon.

ASPEN, COLO.–This week, a Marketplace team including me is reporting from the Aspen Ideas Festival here. It’s an annual event where the altitude of the town (7,902 feet, but who’s counting?) it supposed to match the loftiness of the ideas. It’s an odd situation where a lot of very smart and very prominent people get away from the rest of the country and the world in order to….re-evaluate and understand the problems in the rest of the country.

One prominent problem that keeps coming up here is what will happen to America when we’re no longer No. 1. No one can think of the U.S. economy, these days, without thinking of the nearly 14 million unemployed Americans who want to contribute to society – not to mention supporting their families- and have no way of getting back into the mix. Economists have settled on this idea that we have “structural unemployment,” which means that the skills of the people who don’t have jobs just will not ever match up with the jobs that are available.

That’s a pretty dire prediction, particularly because unemployment has a way of perpetuating itself: employers, as we know, are frustratingly reluctant to hire those who have not had a job recently – thus plunging people into longer and longer times when they’re struggling with their livelihoods.

It turns out that the personal trauma created by unemployment is not too different from the trauma created by war. I talked with a great speaker here, Marty Seligman. He spoke on “happiness,” a subject he knows well because he helps counsel armed forces and governments about it. (Seligman is speaking to England’s House of Commons this week to encourage them to forget about things like GDP and measure the well-being of citizens instead.) Seligman’s official fancy title is: Zellerbach Family Professor of Psychology in the University of Pennsylvania’s Department of Psychology. He is also the man who first identified “learned helplessness” – the idea that people will behave helplessly when they are taught to, even when they have the actual tools to take control of their situation. For instance, if your mother made your bed every day when you were growing up, you probably never learned to make your bed properly – and even if you did, you rarely have the inclination.

Seligman’s big idea now is measuring well-being through a construct he calls PERMA: Positive emotion, Engagement, Relationships, Meaning and Accomplishment. He believes a person who has a balance of those characteristics will be a happy person.

Another prominent expert here is Liaqat Ahamed, a former World Bank official and the author of the well-regarded book Lords of Finance. The book won the 2010 Pulitzer Prize for history. Ahamed, it’s safe to say, has been a hit at the Aspen Ideas Festival.

I talked to both men about unemployment and how we’re handling it. Their comments are below – and they certainly food for thought on how we plan to handle the unemployment issue.

As Linda Richman from Coffee Talk would have said: “Discuss.”

Marty Seligman

Heidi N. Moore: Have you studied job-seekers or unemployment and how that affects people’s well-being?

Marty Seligman: Unemployment is a disastrous event for most human beings. Human beings tend to recover from many bad events. But there is a literature in which, before unemployment you measure people’s life satisfaction, then during unemployment, then after they’ve been re-employed.

Unemployment is one of those situations where, once it’s happened to you, you never get back to where you were before.

Moore: If you extrapolate that to a nation that has 14% unemployment now, does that mean that we, as a country, will probably never return to where we were before the financial crisis?

Seligman: Given what we know about the long-term effects of unemployment, We want to minimize the rate of unemployment. Physical disability and unemployment are the two awful events that happen to people that you don’t see full recovery from in well-being.

Moore: Is there any way to coach them through it, as you’ve done with soldiers?

Seligman: It’s never been done. It’s not been studied and not been done.

Since we know that with soldiers you can pre-arm people with resilient skills, if you know in advance that unemployment was going to occur, it would be important to find out if the same kind of resilience training we give to soldiers would decrease the devastation of unemployment.

Liaqat Ahamed

Moore: What do you make of the U.S. unemployment problem?

Liaqat Ahamed: As a consequence of this crisis and previous crises, we will have to arrange our arrangements for the unemployed. We have the lowest safety net of any country, and probably the least activist strategy for figuring out how to get the unemployed back in the labor force. We’ve essentially said ‘you’re on your own,” and it’s worked up for us until now. But it’s not working for us. The way we handle the unemployed is I’m sure something that a decade from now will be very different.

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