Long-term unemployment. You’ve heard basically nothing about it this election cycle, but I consider it to be the most important issue our country faces. Candidates from both parties agree that the economy is priority number one. We hear endless rhetoric about spurring economic growth, creating jobs, shrinking the deficit and, absurdly, lowering gas prices, something that no elected official can presume to have any control over.
While I agree that all of the aforementioned issues are important, I think both candidates miss the point by ignoring long-term unemployment. The long-term unemployed are those who have been out of work for one year (52 weeks) or more. According to estimates from The Washington Post, 30 percent of unemployed workers are considered to be in the long-term unemployed category. This works out about to be around 3.9 million people.
The most compelling reason for worrying about long-term unemployment is that the talents, skills and creativity of nearly 4 million workers are sitting idle. These workers, cut off from the job market, become increasingly less hireable in the eyes of employers with each passing day. Those fresh out of college and those with more up-to-date skills and work experiences will almost always be preferred over those who have not been employed for a year or more.
If we continue to do nothing to address the unique needs of the long-term unemployed, then we’ll essentially cut off a portion of the workforce equal in number to the entire population of Puerto Rico. These workers will not resume gainful employment and will, more likely than not, end up on government welfare rolls. Unfortunately, I’ve found little research on what, exactly, happens to those who drop out of the labor force permanently.
What’s certain is that former workers will impose major costs to society. We’ll have created a large underclass of people cut off from the global economy, who will have no choice but to turn to Medicare, Medicade, food stamps, welfare and other aid programs. If we want to avoid these direct costs to society (as well as the indirect costs of wasted talent), then we must find a way to make these people employable.
The first step is to ensure robust economic growth. President Obama and Governor Romney both have plans, however lofty or vague, to spur economic growth. But neither seems to grasp, fundamentally, that we need to grow overall demand for workers. They seem to be totally focused on other issues — tax rates, corporate profits, deficits, etc. — not on growing demand for workers.
Without firms who need people to perform work, there’s absolutely no way we will be able to reintegrate the long-term unemployed into the economy.
That’s the easy part. The next is reeducating the former workforce to fill newly created jobs.
In his latest State of the Union address, Obama heavily pushed job retraining, focusing on training workers for new positions in the manufacturing sector. While I think Obama is completely wrong in emphasizing manufacturing, job training is exactly what our legislators should focus on to reintegrate workers into the economy. Old-guard industries such as traditional manufacturing and construction once provided masses of workers with good jobs. Now, because of technological advancement, these industries are up-skilling.
The face of manufacturing has changed so much that we may as well reclassify it into the technology sector. Many positions now require advanced degrees in robotics, electrical engineering or other STEM disciplines.
My point is not to recommend retraining for specific industries (although energy and health care seem to be growing much faster than average), but, rather, to emphasize that economic growth and expanding state-supported education (at all levels, but especially entry-level training) are crucially important for solving long-term unemployment.
As our society advances and becomes much more complex, jobs will require more and more education and training. We need to be supporting those who have been hurt most by the Great Recession: those who have the least access to education, job training and skill-enhancing work experiences. If we fail, the costs imposed by long-term unemployment will continue to hamper all efforts at ensuring long-term economic prosperity.