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Unemployment

delphi_ote

Philosopher
D
Joined
Jan 18, 2005
Messages
5,994
Persistent unemployment is currently a staggering problem in the United States. The NY Times ran a piece today ran a piece today covering how long term unemployment increases the difficulty of finding employment. Unemployment benefits are starting to expire.

I was wondering if anyone had any interesting perspectives or theories on how we might get out of this mess.
 
Not that I have a solution, but an interesting twist I heard a few days ago was that among college grads the unemployment rate was about 4% - a figure that would be considered full employment if it applied to the entire population.

The flipside, of course, was that non-college grads had an unemployment rate of about 17%. Disastrously high.

So, not a solution, but pretty good motivation to stay in school.
 
thaiboxerken said:
Tax Cuts for the wealthy!! That'll solve all the problems!
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Yup, they'd really like to hire a lot more people to work at their businesses right now, they just don't have the cash on hand to do it. Just a few hundred billion more and they'll start hiring.
 
"A rising sea floats all boats." -- a platitude from the 1980s
 
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delphi_ote said:
I was wondering if anyone had any interesting perspectives or theories on how we might get out of this mess.
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Lots of people. The problem is that the people who have these interesting perspectives and theories tend to be economically well-educated. You know, "leftists" and "Democrats." As a result, anything they propose will be marginalized by the tea party Republicans.

The basic problem is consumer spending. "We" need to put more money in the hands of Joe Sixpack, who is very likely to turn around and spend it on yet another sixpack, or on a new big-screen TV, or on a package of Cheez Doodles, or something like that. Putting money in the hands of Daddy Gotrocks doesn't help nearly as much, because Daddy Gotrocks has a tendency not to spend his windfalls, but to save them or invest them. In the current situation, there's lots of investment money floating around (which is why bond yields are so low by historical standards), but not much actual spending, which is what corporations need to see before they'll start hiring.

Which is one reason that extending unemployment benefits is such a good idea. And one reason that extending the Bush tax cuts for the middle class is a good idea. And one reason that extending the Bush tax cuts for the wealthy are a bad idea.

As usual, the tea party Republicans have it exactly wrong -- they support the extension of the tax cuts to the wealthy, but oppose extending unemployment benefits (which would actually do more to address unemployment, because it would have a much stronger effect on consumer spending).

So, basically, if you want to know what to do to fix the economy, the easiest thing to do is to listen to Glenn Beck. Whatever he's opposed to the strongest is probably the best solution.
 
madurobob said:
Not that I have a solution, but an interesting twist I heard a few days ago was that among college grads the unemployment rate was about 4% - a figure that would be considered full employment if it applied to the entire population.

The flipside, of course, was that non-college grads had an unemployment rate of about 17%. Disastrously high.

So, not a solution, but pretty good motivation to stay in school.
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So-so, anyway. College grads like my friends and I saw the jobs we had lined up fall through, so we're doing the jobs that high-school grads would normally be doing.

Better than no job, sure. But getting to work in a call center is not much motivation to go through college.
 
madurobob said:
Not that I have a solution, but an interesting twist I heard a few days ago was that among college grads the unemployment rate was about 4% - a figure that would be considered full employment if it applied to the entire population.
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Of course, during normal times the unemployment rate among college graduates is typically less than 4%, and more like 2%. Even the 4% unemployment rate is elevated for that group.
 
quixotecoyote said:
So-so, anyway. College grads like my friends and I saw the jobs we had lined up fall through, so we're doing the jobs that high-school grads would normally be doing.

Better than no job, sure. But getting to work in a call center is not much motivation to go through college.
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[Shrug.] If the choice is stay-in-school-and-work-in-a-call-center vs. not-work,.... well, that's still incentive.

The real problem, of course, is paying back student loans on call center wages.
 
drkitten said:
Of course, during normal times the unemployment rate among college graduates is typically less than 4%, and more like 2%. Even the 4% unemployment rate is elevated for that group.
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Yes, and I'm sure there is always a gradual change in unemployment rates as you move along the education scale. I didn't expect it to be that much of a difference, though.
 
drkitten said:
[Shrug.] If the choice is stay-in-school-and-work-in-a-call-center vs. not-work,.... well, that's still incentive.

The real problem, of course, is paying back student loans on call center wages.
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Yes. Me and the $250 due in two weeks are intimately aware of that problem.
 
thaiboxerken said:
Meaning?
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The idea as pushed in the 1980s is that a tax cut for the very rich -- which Randroids pretending to be Reaganites mischaracterize as "the very productive" -- would produce a better economy overall, which would help everyone.

For example, if I get to keep $50 million instead of $40 million from my stock options, I will (presumably) do something useful and life-improving with the extra $10 million, like invest it in cancer research and put dozens of starving biologists to work. Or even invest it in a yacht and put dozens of starving naval carpenters to work. The idea that the government could spend money on cancer research is of course anathema, since everyone knows that investment bankers know much more about supervising cancer research than government biologists working at the NIH.....
 
The good Doctor is on point as usual.

Right now businesses are sitting on some $2 trillion of cash. The idea that cutting taxes for the wealthy (and large businesses and business owners) will suddenly create jobs is ridiculous.

If the situation were such that businesses could not cover all the demand and they lacked funds to hire workers to meet that demand, a tax cut would be a good idea.

However, in the current situation, businesses have cash reserves and inventory surplusses. Increasing the amount of cash changes nothing. Hiring will begin when demand is sufficient to make it necessary.

Ergo, helicopter drop. Money for the people.

It turns out that unemployment benefits and things like food stamps are the best way to allocate tax dollars because that money will IMMEDIATELY be spent--ie, demand increases.
 
Okay. I've heard lots of "don't cut taxes on the wealthy", and that we get an increase in spending from distributing unemployment.

But this all still seems pretty hands-off to me. From my perspective, this is a serious crisis, and getting worse by the day. But I think there might be other ideas out there, and I'm interested in hearing them. If you had dictatorial power for a day and you could ignore what was popular or politically possible, what would you do to create employment on a large scale for the short and long term?

Seems to me something like the Works Progress Administration and the Tennesee Valley Authority would be a good idea. At least, the arguments in favor of an approach like that seem the most convincing to me. The census had a significant impact on unemployment. I know a lot of currently unemployed people that are getting by now largely on what they made from their census work.

Does anyone see downsides to this kind of approach?
 
I don't understand how you go from this
madurobob said:
Not that I have a solution, but an interesting twist I heard a few days ago was that among college grads the unemployment rate was about 4% - a figure that would be considered full employment if it applied to the entire population.

The flipside, of course, was that non-college grads had an unemployment rate of about 17%. Disastrously high.
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to this
madurobob said:
So, not a solution, but pretty good motivation to stay in school.
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Unless of course you work in that industry? I don't believe that you can completely correlate unemployment and education. I mean look at me :p There are most definitely other factors to consider. For example, the college grad is going to be more motivated to find employment. Another example, companies are drowning in health insurance premiums. See where I'm going with that one?

drkitten said:
Lots of people. The problem is that the people who have these interesting perspectives and theories tend to be economically well-educated. You know, "leftists" and "Democrats."...
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Way to toot your own horn :D I agree that the issue is consumer spending.

drkitten said:
As usual, the tea party Republicans have it exactly wrong -- they support the extension of the tax cuts to the wealthy, but oppose extending unemployment benefits (which would actually do more to address unemployment, because it would have a much stronger effect on consumer spending).
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Since when are all policy decisions only based on their utilitarian weight? Don’t forget that people have rights.
 
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