Saturday, March 9, 2013

Long-Term Unemployment Is An American Crisis

Yesterday's unemployment report was good news when taken as a whole. That's good to see.

That said, we still have huge problems to solve on the employment front.

For example, high youth unemployment, record high student loans outstanding and a dearth of good jobs awaiting college graduates make it painfully evident that our country's employment problems are far from solved.

Throw in ObamaCare's negative impact (and the proposed minimum wage increase as well) on future hiring and the problem becomes even bigger.

Then add to that the already negative impact of the recently enacted payroll tax increases and the sequester cuts, and the evidence is overwhelming that all is not well in jobs land. We all know that.

But nowhere is the concern greater than with respect to what's happening, or better said, not happening, with regard to the worsening plight of the long-term unemployed.

Are Long-Term Unemployed Being Left Behind? tells the troubling story:

"The job market is improving — but there are signs America is making less progress on its long-term unemployment problem.

The Labor Department Friday said the economy added a healthy 236,000 jobs in February and unemployment fell to 7.7%. U.S. employers have created over 190,000 jobs a month since December, a fast enough pace to gradually reduce unemployment. Wages for private workers also continued rising, perhaps signaling companies are having to pay slightly more to attract workers they want.

But something disturbing was lurking in February’s report: After falling for several months, the number of Americans out of work for 27 weeks or longer — the long-term unemployed — rose slightly to 4.797 million from 4.708 million. The long-term unemployed now account for 40.2% of the unemployed, up from 38.1% in January.

Long-term unemployment is one of the economy’s toughest challenges. Economists fear many long-term unemployed workers may become permanently unemployable as their skills deteriorate — or as they get shut out by employers — leading to a “structural” unemployment problem like what Europe experienced in the 1980s. Some economists already are raising what they consider America’s “natural” rate of unemployment.

Well, February’s combination of healthy job gains, wage improvements and weakness on the long-term unemployment front could deepen these worries: It suggests some Americans are finding it easier to get jobs, but those jobless for long stretches are being shunned by employers. Even worse, it’s possible some workers are seeing wage gains precisely because the long-term unemployed are being shut out. If the long-term unemployed are considered “unemployable,” the supply of “employable” workers goes down, pushing up demand and their “price” — meaning, their wages.

It’s true the problem of long-term unemployment is easing from the depths of the recession, as the Journal pointed out recently. While 4.8 million Americans are long-term unemployed, that’s far less than the 6.5 million in 2010. And one month of backtracking on the issue isn’t a trend.

But it’s worth keeping in mind the plight of the long-term unemployed as the job market starts picking up for everyone else."

Summing Up

Retiring baby boomers are shrinking the workforce.

Early retirees are shrinking it even more.

And although there's no way of knowing for sure, my guesstimate is that lots of these early retirees are leaving the work force due to the lousy jobs situation.

And of course, youth unemployment is far too high as well.

The work force is shrinking at both ends.

But the risk associated with an entire group of people being left behind permanently --- the long-term unemployed --- is both real and bit scary, too.

It resembles Europe too much for me.

This ongoing tragedy of the long-term unemployed must become a national focus at least until we're able to bend the trend and get these people back to work. We're not Europe. We're America.

Focusing on the plight of the long-term unemployed is not only fair to them, but it's absolutely necessary to get them back to work in order for our nation's economy to function properly and for government spending to be brought under control.

Labor force participation rates and the percentage of Americans employed may sound esoteric to some, but how many people are working and how productive they are while working is what determines our American standard of living as a whole.

We need to put Americans to work in the private sector, and taking steps toward achieving North American energy independence would be a great sign that we're a caring, productive, financially stable and nationally secure society.

That we're still We the People, in other words.

Meanwhile, the size of our government must get relatively smaller at the same time.

It's the absolute best way for America and all Americans to win in the competitive game of economic globalization.

Thanks. Bob.

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