AEIdeas

The public policy blog of the American Enterprise Institute

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Discussion: (9 comments)

  1. The best way to help the long term unemployed isn’t to get the government to tinker on their behalf. It is to help them the same way they help the rest of the unemployed: by reducing government spending and regulatory overhead and uncertainty. Investment spending hasn’t yet recovered from the recession, and it takes time to have an impact after it does. This is the ratio of investment spending to consumer spending from the Federal Reserve graph site:
    http://research.stlouisfed.org/fred2/graph/?graph_id=93977&category_id=0

    It shows that after being lower in the 80s, spending rose to be typically higher likely do the higher capital needs in a modern high tech economy to keep workers productive and stay ahead, and we haven’t recovered. Reduce government spending and hence borrowing which crowds out private borrowing (no matter how many ways they try to obfuscate it to claim it doesn’t, it is hard to avoid that being the likely reality. An investor can do only a limited set of things with his $: lend it to the government, invest it privately in the US, invest it privately elsewhere in the world, or stuff it in a mattress. The odds are if he doesn’t lend it to the government it’ll be invested privately in the US).

    Last I checked angel investment and venture capital investment hadn’t recovered in inflation adjusted dollars, and again they will take time to kick in. Regime uncertainty due to Obamacare and other things spooks investors from risking their money in high growth, but already risky, startups. The Kauffman foundation, last I checked, was showing that although single employer firms were rising due to laid off workers consulting, there weren’t as many multi-employer firms of the sort that grow and create jobs being created.

  2. No mention of making unemployment less attractive? How many of the long-term unemployed first took a two-year vacation and then found they were trapped? We have to pay to relocate people? How many relocated themselves from areas that didn’t have 99 weeks of benefits to areas that did? (Yes, many did just that.) More of the same from the same old crowd — punish prudence and reward imprudence and then act surprised when more and more people need ‘benefits’.

  3. How about lessons in self-esteem. I do a lot of resumes where people have great skills but: 1) there are MBAs who work at Kay Jewelers 2) I have a Finance Director, laid off after 20 years, afraid to interview and look for a job. Thinks her world is over if she isn’t given an offer. We need to teach people how to “Self-Market”. Make them believe that “they are SOMEBODY”. Also, when interviewing, the hiring manager doesn’t care about YOU. They could care less you’ve got kids, worked 20 years, etc. They have a PROBLEM and in the interview if you do not offer a SOLUTION to help them meet their challenges, they are not going to hire you on “GP” (because you are a Good Person) alone…..Many people are unemployed because they dont know how to go look for jobs that ARE available in their field. I coach them everyday

  4. mesa econoguy

    1 idea to help the long term unemployed:

    Get rid of Obama.

  5. Todd Mason

    Vocational traning may very well suck but a profit motive should be introduced secondnand. The guy who paid $50k for an associate’s degree in culinary arts and earns $9/hour as a dishwasher isn’t helping anyone except abusive trade school marketers.

    The result: Student loan defaults at private trade schools are pushing into the red again. http://voptsslf.blogspot.com/2011_06_01_archive.html

    Public private partnerships are the answer. If a company needs workers with experience in carbon fiber composites, let them contract with whatever agency, public or private, that can deliver the most value for public dollars. But the keys are learning real skills for real jobs.

  6. Public private partnerships are the answer“…

    Can you say, Fisker?

  7. “Why doesn’t the labor market clear?” would seem a way of asking the broader question. A fear of discovering the price of labor at which the market would clear might be an answer for why there isn’t trust in letting the market do its work. Is this fear justified? Removing the minimum wage, for example, might put some downward pressure on certain parts of the labor market. But if a speculative analogy to the ecology of the ocean holds, the very small tasks which everyone has and would be willing to let others do for the right price and the right person might be thought of as the plankton in the ocean. The abundance of this plankton would then invigorate and feed the entire food chain. Workers would be drawn off the sidelines to do these tasks which are within the reach of their skills and life situation. They don’t want a handout. They want the dignity which comes from serving in however humble a way. This would begin to revive animal spirits. There would need to be more workers at the next higher levels of pay to deal with the increased activity. Real economic activity would lead to sustainable innovation, the release of latent talents, confidence in the future would be restored, a sense of community and reciprocation would gladden hearts. The rapid action of market prices and task information being disseminated by word of mouth to even the otherwise considered unemployable individuals, letting buyers and sellers find one another, would be a marvel to behold. The economic and moral power of spontaneous order would be life giving to what now are effectively dead zones in the ocean. Removing the impediments would thus let the system work. That is at least the beatific vision of yours truly who realizes this may be more poetic than economic. Thank you for your forbearance in considering this amateurish effort. Hope this contributes.

  8. I love number three which reads “3. Privatized training. Our government training programs are a national embarrassment, and the unemployed would be better off if the monies were available to individuals who themselves chose the skills they wish to acquire.” This statement is so true. By trade I have been a Property Manager in the Apartment Industry for 13yrs. I have been unemployed since July 2012 and look for work on a daily basis. I have been told by many I have interviewed for as a Property Manager that if I had a Real Estate License I would have had a job almost immediatly after getting laid off. I have gone to the re-employment office here in Florida and have asked for training in Real Estate so I can get a job managing single family homes. I was told that the program for re-training individuals to enter the workforce no longer supports that line of training. He then suggested I pick another program, and most of them where in the medical profession, a few welding and then, culinary. Really? I have 13yrs in the housing industry and would like to enhance my skills to train for the other side of the business. I was also told that if I went to school on my own it would jeapardize the bi-weekly benefits making me essentially homeless if I did not pay my rent. This is so ridiculous, I just want to work and no longer be a part of the SYSTEM…

  9. The industry that I know has sent all middle income design and production jobs to Chenai, India. This has decimated the publishing industry in the US.
    The middle class in India and China is growing at the expense of the middle class in the US.
    In publishing this is unlikely to change, given the internet that allows files to be transmitted globally to the to the least expensive workers.
    The one leveling factor is cost of energy. If the US were to exploit its energy resources, it could under price other countries and bring some manufacturing back to the US.

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