Two years of unemployment insurance isn't doing a lot of people a favor
This country has some of the highest levels of long-term unemployment — out of work longer than six months — it has ever recorded. Meanwhile, job growth has been, and looks to remain, disappointingly slow, indicating that those out of work for a while are likely to remain so for the foreseeable future. Even if the government report on Friday shows the expected improvement in hiring by business, it will not be enough to make a real dent in those totals.
So the legions of long-term unemployed will probably be idle for significantly longer than their counterparts in past recessions, reducing their chances of eventually finding a job even when the economy becomes more robust. . . .
people who become disconnected from the work force have more trouble getting hired, probably because of some combination of stigma, discouragement and deterioration of their skills. . . . . studies comparing the fates of similar workers have also shown that the experience of unemployment itself damages job prospects. . . . .
“From what I’ve seen, employers do tend to get suspicious when there’s a long-term gap in people’s résumés,” said James Whelly, deputy director of work force development at the San Francisco Human Services Agency. “Even though everyone on an intellectual level knows that this is a unique time in the economy, those old habits are hard to break with hiring managers and H.R. departments who are doing the screening."
The problem is that the Obama administration is calling for more of the cause of the disease.
Vice President Joseph R. Biden Jr. called the weak November jobs report is “disappointing” and urged Congress to extend unemployment benefits and tax cuts for the middle class. . . .
And this is a real puzzle? The NY Times seems to think so, but they don't seem to understand that it is future profitability that determines whether people are hired.
The lack of strong hiring has puzzled some because companies are enjoying strong profits and building large cash reserves. But economists said that employers are still holding back on adding new workers. . . .
David Leonhardt at the NY Times seems to believe that the way to create jobs is through at least in part increasing unemployment insurance extensions.
Today’s report is another argument in favor of the Federal Reserve’s attempts to reduce long-term interest rates, through its so-called quantitative easing program. It’s also an argument for making sure that any extension of the Bush tax cuts includes measures that are more likely to create jobs, like business tax cuts, a payroll tax cut and an extension of unemployment benefits.
If you want some comedy, Austan Goolsbee warned:
Austan Goolsbee, chairman of Obama’s Council of Economic Advisers, put the best face possible on the ugly news, warning that observers shouldn't “read too much into any one monthly report.” He added that such reports are “volatile” and subject to revisions — as were the October employment gains, which were upgraded Friday from an initial estimate of 150,000 to more than 170,000. . . . .
Goolsbee then goes on to selectively pick the dates that he wants to compare. I am not sure why they don't use the end of the recession or when Obama became president or when the stimulus passed besides the point that things have obviously gotten much worse than those dates.
The economy has added 1.2 million new jobs since December 2009, he said. . . .
Fine, let's take his preferred reference date. Unemployment has gone down all the way from 10 percent to 9.8 percent. A million more people have left the labor force and virtually the same number of people are unemployed.
UPDATE: Obama says that he will only sign a tax bill if it includes extended unemployment insurance benefits. Presumably he means unemployment insurance benefits without paying for it.
President Obama told Congressional leaders Saturday that he was open to a compromise on extending the Bush-era tax cuts, but threatened to veto if the deal didn’t include an unemployment extension.
Speaking with Majority Leader Harry Reid and Speaker Nancy Pelosi, Obama said he would consider permitting a renewal of Bush era tax cuts for all taxpayers, including the wealthy, but that Republicans would be expected to include commitments to some Democratic priorities.
Obama wants an extension of jobless benefits in addition to extensions of the tax cuts that benefit middle class families. . . .