As you no doubt have heard by now, Friday’s jobs report was pretty awful. Two newly released reports document the devastating effects our high-unemployment, low-growth economy is having on millions of American workers.
One report, the Pew Charitable Trust’s Hard Choices: Navigating the Economic Shock of Unemployment, is an in-depth study of families who had at least one member who was unemployed for at least one month between 1998 and 2010. The big takeaway from this report is that a spell of unemployment can severely damage a family’s chances of upward mobility, because the economic shock frequently wipes out a family’s savings and assets.
For example, the families studied reported in engaging in behaviors such as the following:
— Tapping into resources originally allocated for their children’s education or their own retirement;
— Taking out risky small-dollar loans with high fees; and
— Depleting assets in order to meet qualifications for public assistance.
Unsurprisingly, low-income families and families of color were the families most likely to experience job loss, and also those who had the fewest resources to rely upon when job loss hit. Here’s one shocking statistic that leapt out at me:
when comparing households that experienced unemployment, the median wealth of white households was at least seven times that of black households in each year of the study.
The report recommends policy responses, including reforming unemployment insurance, providing low-cost loans, and creating tax incentives to encourage families to save for emergencies. All of those things would be welcome interventions, but what we really need is an economy that fundamentally provides more justice and prosperity for all workers. Otherwise we’re just applying band-aids to people who are bleeding to death.
The second report, by the excellent National Employment Law Project (NELP), looks at the long-term unemployed and the impact their removal from the work force is having on the entire economy. NELP’s main findings are that bad economic policies are unnecessarily prolonging the recession; that compared to previous recessions, an unusually high proportion of the unemployed have been unemployed long-term; and that many of the jobs that have been lost are good jobs, while the ones being created in their stead are pretty cruddy ones.
Here are some of the deets:
— The sequester and other budget-cutting shenanigans are costing us over 2.4 million jobs.
— Currently, there are over 27 unemployed or underemployed workers in the United States. This includes part-time workers who would rather be working full-time, and discouraged workers.
— The average spell of unemployment is 37 weeks (yikes!), which is more than double of what it was in any recession since the 1950s.
— African-American workers make up a disproportionate amount of the long-term unemployment; they’ve been hard hit by austerity measures and public sector layoffs.
— Americans with college degrees are suffering far more in this recession than in previous ones. During the Great Recession, the number of long-term unemployed with bachelor’s degrees grew five-fold.
— Good jobs went bye-bye, to be replaced by sucky ones. The report notes, “Six in ten jobs lost during the downturn were in mid-wage occupations. By comparison, during the recovery, employment in lower-wage occupations grew by 2.8 times more than employment in mid- and high-wage occupations.”
Sorry, but there’s no optimistic gloss that I can put on any of that. It’s an appalling picture, and made all the more disgraceful because it was almost entirely avoidable. Even now, some of the damage could be ameliorated with saner fiscal and monetary policies. NELP is promising a follow-up report next month offering some solutions to this mess, specifically geared toward the problems of the long-term unemployed. Let’s hope someone in power listens to what they have to say.