A woman prepares to speak to potential employers at a jobs fair in New York, Nov. 20, 2013.
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On long-term jobless, ‘everybody’s worst fears are coming true’

Updated

It’s hard to remember now, but President Obama’s re-election campaign leaned heavily on the economic populism that’s a growing force in the Democratic Party. And it’s looking more and more like Democrats around the country have settled on a minimum wage hike, at least for now, as the major piece of populist economic policy to embrace.

As Steve wrote Monday, California and New Jersey just approved raises, and Massachusetts could be next. There are even efforts underway in Washington—Obama recently came out for raising the national minimum wage from $7.25 an hour to $10.10 an hour—though no one’s expecting much out of this Congress.

That makes sense on a political level. As Steve notes, it polls well, and helps drive working-class voters away from the GOP. And of course, it’s good policy too.

But it would be a shame if boosting the minimum wage allowed Democrats to check the box on economic populism and move on. That’s because, important as it is, it does little for those not working.

That would be less of a problem if there were more turnover in the job market, with people moving often between being employed and unemployed, as used to be the case. But in recent years, there’s been far less flux. That’s creating a distinct class of people, the long-term jobless, trapped in a vicious cycle where being unemployed makes it all but impossible to get hired. And with economists warning that high unemployment could be the new normal, there’s little reason to expect this dynamic to improve.

The New York Times recently profiled a 53-year-old college graduate, Jenner Barrigton-Ward, who’s been out of work since 2008 and is now broke and homeless:

For Ms. Barrington-Ward, joblessness itself has become a trap, an impediment to finding a job. Economists see it the same way, concerned that joblessness lasting more than six months is a major factor preventing people from getting rehired, with potentially grave consequences for tens of millions of Americans.

 

 “I don’t think we know the answer,” said Jesse Rothstein, an economist at the University of California, Berkeley. “But right now, I think everybody’s worst fears are coming true, as far as we can tell.”

Helping people like Barrington-Ward will require policies that aren’t even in the conversation right now, like work-sharing programs and direct support for the long-term unemployed. But in the long-term, if we want to avoid creating a whole new class of people who are permanently shut out of the workforce, they’ll need to be.

Unemployment

On long-term jobless, 'everybody's worst fears are coming true'

Updated