Right now, unemployment is mainly the result of what economists call cyclical factors: during the recession, demand plummeted, and during the recovery consumer spending, government stimulus, and exports haven’t been sufficient to make up the difference. But if high long-term unemployment continues there’s a danger that, sooner or later, cyclical unemployment could become structural unemployment—that is, unemployment that won’t go away once the good times return. The longer people are unemployed, the harder it is for them to find a job (even after you control for skills, education, and so on). Being out of a job can erode people’s confidence and their sense of possibility; and employers, often unfairly, tend to take long-term unemployment as a signal that something is wrong. A more insidious factor is that long-term unemployment can start to erode job skills, making people less employable. One extraordinary study of Swedish workers, for instance, found that there was a strong correlation between time out of work and declining skills: workers who had been out of work for a year saw their relative ability to do something as simple as process and use printed information drop by five percentile points.Well, liberals did keep saying we should be more like Europe. Are they happy now?
Tuesday, April 24, 2012
Not Working For A Living
The disturbing trend of being out of work: