The rise of the unemployable underclass

By Felix Salmon
August 10, 2010
David Leonhardt's latest column is full of interesting employment datapoints. Among them:

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David Leonhardt’s latest column is full of interesting employment datapoints. Among them:

  • In 2008, only 13.2% of the labor force was unemployed at some point. That compares to 18.1% in 1980, and 22% in 1982.
  • Real wages, which normally fall during recessions, have risen in this one. Even nominal wages are up.
  • The mancession is over: “male employment has risen by almost one million this year, while female employment has fallen by 300,000″.

The overriding impression is of most Americans actually doing OK, with an unemployable underclass bearing the brunt of the recession. Maybe we really are all middle class now: there’s the unemployed at the bottom of the pile, and the plutocratic elite at the top, with the overwhelming majority sitting in between, doing OK but hardly great.

The problem is that persistent unemployment at or around 10% is unacceptable in the U.S., especially with the social safety net being much weaker here than it is in Europe. Leonhardt is right that Euro-style safety nets aren’t particularly innovative, but they do at least keep people housed and clothed and fed and living outside poverty — reasonable expectations for anybody to have, I think, in the richest country in the world. If David Leonhardt can’t think of any bright ideas for solving the persistent-unemployment problem, then the chances are such solutions aren’t going to magically appear. Which means we need to help the long-term unemployed, rather than simply ignore and forget about them.

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