Afternoon Must-Read: Matt O’Brien: Unemployment: It’s Not Personal

Matt O’Brien: It’s Not Personal: “Long-term unemployment is a terrifying trap that…

…even in the best of times, is difficult to escape. And it’s a trap that you can get stuck in for no reason other than bad luck. Today, there are still almost 3.5 million people who have been out of work for six months or longer and are looking for work. There isn’t a more urgent crisis, and there are three things you should keep in mind about it… the long-term unemployed aren’t much different from the short-term unemployed… The long-term unemployed have a hard time getting companies to even look at their job applications, let alone hire them…. There’s never been this much long-term unemployment before…. Long-term unemployment isn’t a story about lazy people choosing to live on the dole instead of getting a job. It’s a story about people who want a job not being able to find one, because there aren’t enough of them—and then falling to the back of the jobs line. That is, it’s a story about macroeconomic bad luck. Think about it this way. We know that companies discriminate against the long-term unemployed. That’s why their ranks have been so slow to come down. But we also know that the long-term unemployed are like the short-term unemployed in every way except for how long they’ve been out of work. So we don’t know why so many more short-term unemployed people are becoming long-term unemployed today than in the past—unless it’s the economy, stupid. And it is the economy. Ben Casselman of 538 has already shown that the best predictor for how long you were unemployed was the unemployment rate when you lost your job…. There’s no reason to think that the long-term unemployed are necessarily lazy or lacking skills…. The lesson here is that we need stimulus…. Nobody should lose their career because they lost their job at a bad time.