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The One Economic Problem Nobody Seems to Give a Damn About

It remains one of the strangest and saddest aspects of our current economic debates that nobody seems to care all that much about our still painfully high unemployment. And it’s probably a lot higher than we know:

In December, the Bureau of Labor Statistics counted just 1.5 million “99ers,” the smallest number in any month since 2010. The fourth quarter of last year also saw the lowest average number of 99ers in two years. But it’s not clear that more of the very long-term unemployed are finding jobs.

“That decline is likely not due to an improving labor market, because it just hasn’t improved much over the last two years,” Heidi Shierholz of the labor-backed Economic Policy Institute said in an interview. “A lot of the decline in the unemployment rate we’ve seen is just due to people dropping out of the labor market.”

The people counted as unemployed for 99 weeks or more have been actively looking for work, or they wouldn’t be considered part of the workforce at all. One thing that may have kept so many people searching for so long is federal unemployment insurance, which from late 2009 through 2011 combined with state benefits to provide as many as 99 weeks of compensation. People are required to search for work — in other words, to remain attached to the workforce — as a condition of receiving benefits.

But the duration of benefits is shorter than before. In February 2012, Congress set in motion a gradual reduction of the maximum duration to 79 weeks in June, then to 73 weeks by September. As of December, the jobless in only nine states qualified for the full complement of benefits.

Jesse Rothstein, an associate professor of public policy and economics at the University of California, Berkeley, found in a 2011 research paper that the recent regimen of extended benefits did indeed keep people from giving up their job search as quickly as they otherwise might have. Rothstein and Shierholz said the dwindling long-term benefits might help explain why there were fewer 99ers at the end of last year, though it’s hard to be sure.


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“I’ve been surprised at how little anybody’s paying attention — not just to the 99ers, but also the 79ers in the past year,” Rothstein said. (The term “99ers” has most commonly been a nickname for people who used up 99 weeks of unemployment benefits, though the estimate of how many people out of work for 99 weeks is not based on the insurance rolls.)

“There are still a lot of people who haven’t found work, and it’s reasonable to guess it’s not because they’re shirking, but because the labor market is still pretty terrible,” Rothstein said. “I wonder how they’re getting along.

Yeah. I do too. But apparently nobody else does. Hey, I’m old enough to remember when 7.8% unemployment was considered catastrophic and the whole government lurched into gear to bring it down. I guess it’s the new normal now. Oh, 7.8% plus all those who’ve just dropped out of the labor force.

Meanwhile, we’re still on the austerity train determined to “fix” our problems by making them worse. I’m sure that’s going to end well.

I should note that the extension of UI under the “fiscal cliff” deal was the one true accomplishment. (The tax hikes would have happened anyway.) I’m not sure what it would have done to the economy to cut millions off of all cash support, but the scale of human misery certainly would have been large.

On the other hand, I’m fairly sure that both Democrats and Republicans have bought into the notion that this group of long term unemployed are just lazy slackers who refuse to look for work so they think cutting them off is a good way to motivate them. Unfortunately, the opposite is true. According to the article, people keep looking for work as long as they get benefits. It’s when they get cut off that they stop.(Also too: 7.8 percent unemployment!)

So, once again, our leaders are attempting to solve a problem by doing the thing that actually makes it worse.


Digby is the pseudonym of progressive political blogger Heather Parton from Santa Monica, California who founded the blog Hullabaloo.

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