Tuesday | May 22, 2012
Long-Term Unemployment Has Surprising Effects
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By
Cara Newman, YOUNG MONEY Editor
1 March 2010
Unemployment is high. And, it’s expected to stay high. Even as the economy slowly recovers, jobs simply are not going to recover fast enough.
With less people working and paying taxes there is less money coming in to the states. Many states have already run their unemployment coffers dry. According to the New York Times, “Roughly 2.7 million jobless people will lose their unemployment check before the end of April unless Congress approves the Obama administration’s proposal to extend the payments.”
This doesn’t count the people who have already gone through all of their unemployment. If Congress doesn’t approve another benefit extension, we’re going to see more poverty and more homeless, destitute people. If they do, we have to borrow more money. Either way, the social safety nets are breaking and aren’t up for the job.
Again, from the New York Times, “6.3 million Americans have been unemployed for six months or longer, the largest number since the government began keeping track in 1948.” This is the first time that the average duration of being unemployed has surpassed six months, according to the Atlantic Monthly, “for every open job in the U.S., six people are actively looking for work.”
Of course, this doesn’t count the people who have simply given up and stopped looking.
New workers are constantly entering the job market. We need to produce around 1.5 million new jobs a year—just to keep from sinking even deeper.
High unemployment affects all of us. Even if we still have jobs, each and every one of us will be affected. Our very culture will be affected.
Here are just some of the ways that lasting high unemployment can change society.
1. An entire generation could be lost. Not getting a job upon graduating college can affect you your whole life, leaving an entire generation playing catch-up with fewer chances. Those lucky ones who do find jobs may be paid less, and history shows that earnings gaps persist. It is difficult to make up from a low start. Starting in a lower position or getting paid less can make others see you as someone with less potential. Young adults may also find that long periods of unemployment can lead to bad habits, such as drinking and drug use. These can either cause or be the result of depression.
2. More outsourcing of white collar jobs. Companies may start hiring more and more workers from countries where labor is much cheaper. We’ve seen manufacturing jobs move overseas for years. Now, with the ease of the Internet and a larger global community, white collar jobs may also be outsourced more frequently.
3. More men out of work. It may sound sexist but unemployed men often have a harder time then unemployed women, especially men from older generations. They are psychologically primed to be the breadwinners and to take care of their families. If they are unable to do so, this results in a severe lack of self-esteem. Men are less likely to do house work even when they are out of work. All of this leads to strife within marriages. In addition, single men who are unemployed often look less attractive as potential spouses. Fewer women may decide to get married; especially those from generations of divorce. This leads to more single family homes with less stability. In addition, the cost of getting divorced may be costly so in order to avoid that people may decide not to get married in the first place.
4. Higher rates of depression. Prolonged unemployment is a major cause of depression. This leads to more physical problems, higher stress, and more drinking and drug use.
5. Physical problems. The stress of being out of work for extended periods of time can cause lasting physical problems. Depression, drinking and drug use can exacerbate this situation. Less money to eat well get result in poor nutrition and poor health. The loss of health insurance and being unable to afford medical care can cause small health problems to turn into big ones.
6. Anti-immigrant feelings. Immigrants are often willing to do jobs that other people don’t want to do and to be happier doing them. They are also often willing to get paid less. This can lead to anger directed at immigrants for “taking our jobs.”
7. Charitable organizations may suffer. Less jobs leads to more fear. People may be afraid to spend money helping other people. People may be more worried about themselves and are less concerned about the welfare of others. Charitable organizations may see fewer donations and be less able to help others in need. Unfortunately, with more people in need charitable resources are often stretched to the limit.
8. Ruined neighborhoods. Poverty is hard on any area, but neighborhoods that are poor where people are working are better off then areas of high unemployment. Areas of high unemployment often become infected with illegal enterprises such as drugs and crime. Once a neighborhood is beset by poverty and violence it is hard to turn it around.
9. Less happiness at work. Even if you have a job chances are that you aren’t happy there. High unemployment leaves people feeling stuck and scared. Bosses take advantage of their employees, piling on more work for less pay. Employees are afraid to speak up and complain or they are afraid to quit. Instead, employees stay in bad situations letting their anger and depression grow. The latest surveys have showed us that job satisfaction is at an all time low. People may feel forced to take jobs they believe are beneath them, making them less happy from the very first day. In addition people who do have jobs may feel a sort of “survivor’s guilt.”
10. State’s not getting any money. Less people working means less money paid into unemployment insurance. It means fewer taxes. This means that roads aren’t fixed, that there is less money for snow removal, for the school system, and for civil servants like police and fire.
There are probably many other things that are affected by long periods of high unemployment. These are things that have been found after previous recessions and depressions. Hopefully our job market will turn around. No matter what happens it helps to be aware of the different effects unemployment can cause.
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