Trying the Same Thing, Expecting Different Results

by Dave Schuler on May 25, 2014

I always try to assume the best about people. I realize that’s unrealistic. If I didn’t I would be continually disappointed. I feel a moral obligation to assume the best until proven otherwise rather than the other way around. All this by saying that I assume that those who opposed extending emergency unemployment benefits did so because they believed it would incentivize a return to work. It hasn’t:

The case against extending unemployment benefits essentially boils down to two arguments. First, the economy has improved, so the unemployed should no longer need extra time to find a new job. Second, extended benefits could lead job seekers either to not search as hard or to become choosier about the kind of job they will accept, ultimately delaying their return to the workforce.2

But the evidence doesn’t support either of those arguments. The economy has indeed improved, but not for the long-term unemployed, whose odds of finding a job are barely higher today than when the recession ended nearly five years ago. And the end of extended benefits hasn’t spurred the unemployed back to work; if anything, it has pushed them out of the labor force altogether.

Of the roughly 1.3 million Americans whose benefits disappeared with the end of the program, only about a quarter had found jobs as of March, about the same success rate as when the program was still in effect; roughly another quarter had given up searching.

Isn’t it about time to try something else? There is no dearth of possibilities. The obvious conclusion to draw from the real life experiment we’ve conducted is that people aren’t returning to work because there are no jobs for them. Among the possible remedies are extending emergency unemployment benefits possibly forever if the alternative courses of action aren’t to our liking, starting a WPA-style jobs program, or removing the barriers to job creation. Those are just a few of the possibilities.

I get no sense of concern or energy on this subject from either side of the aisle.

{ 22 comments… read them below or add one }

... May 25, 2014 at 10:10 am

Assuming the best of people is a luxury good.

... May 25, 2014 at 10:20 am

As for the idea that extended unemployment compensation kept people from going back to work — that idea has been demonstrable bullshit for years now. The first 99ers started appearing over four years ago, and there was no indication then or since that the end of their UEC led to a rush of lazy freeloaders suddenly going out and filling all those jobs that so badly needed filled.* In fact what was seen was that people just dropped out because in this lovely Democratic Recovery of Awesomeness there aren’t enough jobs.

* Not that any scumbag sucking Republican has noticed. Every godfamned last one of them from Mitt Romney to Fox Business to the Drews and Jans of the world think that the only reason anyone is unemployed is because they want to freeload off the Romneys, Drews and Jans of the world.

michael reynolds May 25, 2014 at 12:19 pm

Dave:

I spent some time with that poll on unemployment the other day, particularly on the category of people who’d been out of work for two years or more. I would be all in favor of a WPA program, but when you look at the numbers what do you see? Almost no one is willing to relocate in order to take a job. Many say they refuse jobs that do not use their education and skills in ways that are directly related. I don’t see how WPA works there.

As for the barriers to starting businesses, IIRC only 16% of long-termers are actively interested in doing so. I doubt this is because of “barriers.” Rather I would guess it’s because contra the usual news stories, this is not an especially middle class issue, the bulk of the long term unemployed are people who were barely breaking the minimum wage, and it’s hard to assemble capital when you make $10 an hour.

The H1B visa issue may have some impact on a relatively small slice of the long-term unemployed, but only on a small slice. Guys who were making 20k a year are not being replaced by engineers from India.

I think we are (d)evolving into a new economy. The rise of the machines, globalization, the ease of outsourcing, a risk-averse corporate culture more interested in financial manipulation than in making things, and the slow sinking in of the fact that we were coasting on WW2 and its aftermath, the effects of the Cold War, and assorted bubbles, all point to a new understanding of reality – a reality that’s been coming on for decades now.

I wish there were a way to use the wayback machine and see what the US economy would be if we subtracted the tech and real estate bubbles. And what it would be if we removed the incredible, once-in-a-lifetime edge we had coming out of WW2. What would our economy really look like over the last 75 years, minus those factors? What would it look like if the Chinese had not spent decades in looney isolation but had gotten in the game 50 years ago?

Your point in your other post about the expectations formed in youth is apropos here. We in our generation think we saw the amazing power of the American economy, but we were still cashing checks from 1945, we did not have a billion Chinese fighting for our jobs, and data transfer was still telephones, fax machines and snail mail.

We need to start adjusting to reality. The entire developed world has serious unemployment problems. I don’t believe it’s got much to do with either Mr. Bush or Mr. Obama. Or any American president. Take away our lucky historical breaks and our bubbles, maybe we just aren’t as cool as we think we are.

Dave Schuler May 25, 2014 at 12:34 pm

Almost no one is willing to relocate in order to take a job.

Modern life. Two -job families make it tough to change. So do kids in school, elder-care, etc.

I don’t see how WPA works there.

Ever heard of the WPA Writers Project? The Federal Art Project?

You may be thinking of the CCC rather than the WPA.

As for the barriers to starting businesses, IIRC only 16% of long-termers are actively interested in doing so.

It’s not the unemployed who will start business but the employed. New businesses employ people, including the long-term unemployed if there’s enough new business formation. New business formation at the height of the Great Depression was greater than it is now.

I wish there were a way to use the wayback machine and see what the US economy would be if we subtracted the tech and real estate bubbles.

I can only tell you what I think it would look like. A lot like the economy does now. I think our problems started twenty years ago.

I think the reason the future might look the way suggest it will is that some people think they’ll benefit by it. I don’t think they’ve counted the costs properly.

michael reynolds May 25, 2014 at 12:48 pm

Look, I’m all for paying people to do useful stuff. I just don’t think many will be willing to do the work. The WPA had offshoots like the writers and artists things, but that’s chicken feed. The jobs were in things like bridges and roads and dams and post offices. As you have pointed out many times, we’d have to deliberately choose to build things we don’t need, using labor-intensive methods that are out of date.

I’ve suggested sending crews in to tear down abandoned buildings and slap paint on eyesores and clean up national parks. All useful things. But good luck getting anyone to do that work if no one will relocate – even to the next town over – or do work they think is beneath them. It would have to be compulsory – payments tied to taking on shit work.

michael reynolds May 25, 2014 at 12:57 pm

By the way, interesting that you mention the writers project. Today there are zero barriers to becoming a writer and having it placed before the public. You can self-pub for nothing. Same with artists. One of the big things the WPA did was pay people to produce that generation’s version of Wikipedia – guide books and so on. I guess we could put fan fic writers and bloggers and Wiki contributors on the public payroll – some of my friends would benefit – but it’s paying for make-work of dubious usefulness.

Dave Schuler May 25, 2014 at 1:03 pm

The jobs were in things like bridges and roads and dams and post offices.

That’s when our economy was an economy of farming and manufacturing and a heckuva lot less retail or services than we have now. A WPA for today would necessarily be one tuned for the economy of today rather than the economy of 1936.

Dave Schuler May 25, 2014 at 1:32 pm

By the way, interesting that you mention the writers project.

When I was a kid we toured all of the lower 48 using the WPA Writers Project guides as our tour books.

steve May 25, 2014 at 2:34 pm

Who will start these new businesses? Most small start ups do so with money from family and friends. Capital is all tied up into the hands of a fairly small group. Anyway, a works project cannot get through Congress, we all know that. This data will just be ignored and people who believe that UI increases UE will continue to believe it.

Steve

Dave Schuler May 25, 2014 at 2:42 pm

Capital is all tied up into the hands of a fairly small group.

That isn’t what Piketty’s research, corrected, says. It says that between 20% and 30% of wealth is in the hands of the top 1% of income earners which I will agree is a relatively small number of households—about a million. However, that leaves between 40% and 50% of wealth in the hands of the next 9% of income earners, not a small number (roughly 10 million).

Sounds like a lot of potential entrepeneurs to me. If we had one million new businesses employing an average of just five people each, that would solve almost the entirety of our problem. A half million employing an average of just 10.

It all comes back to the observation I’ve made here any number of times. Don’t just look at the top 1%. The balance of the top 10% of income earners is important, too.

Guarneri May 25, 2014 at 2:57 pm

“Every godfamned last one of them from Mitt Romney to Fox Business to the Drews and Jans of the world think that the only reason anyone is unemployed is because they want to freeload off the Romneys, Drews and Jans of the world.”

Two mind readers on one blogsite. Blessed.

“Modern life. Two -job families make it tough to change.”

If I understand it correctly, this has been a big issue for —. But I can’t read minds.

“I just don’t think many will be willing to do the work.)

As I’ve noted a number of times. Picker/packers in agriculture (in Florida at least) are overwhelmingly Haitian not because of some odd preference for Haitians, but because Americans won’t do it. And as I’ve also noted, the pay exceeds min wage.

... May 25, 2014 at 4:08 pm

So Drew is stating that there are ten million jobs for pickers in Florida. In addition to the jobs that are already there, of course, because otherwise we’re just replacing one unemployed person for another.

(I won’t bother pointing out that the growers like using Haitians now for the same reason they liked using poor blacks in the past – namely that they’re easier to push around and abuse. It’s the same reason why roofing crews, which used to be a mix of white and black (depending on the job) are now primarily Guatemalan and Mexican – the subs like having people that will take whatever abuse comes there way.)

(Oh, wait, I guess I did mention that. Incidentally, I used to know a lot of white people that worked as laborers in the roofing business. They didn’t leave the business because they didn’t want to do it anymore, they left it because they stopped getting hired in favor of labor that was more willing to get fucked in the ass by the bosses. Note that this situation was made possible by the elites of both parties deciding that they wanted the country poorer and browner and more complacent.)

... May 25, 2014 at 4:40 pm

That isn’t what Piketty’s research, corrected, says. It says that between 20% and 30% of wealth is in the hands of the top 1% of income earners which I will agree is a relatively small number of households—about a million. However, that leaves between 40% and 50% of wealth in the hands of the next 9% of income earners, not a small number (roughly 10 million).

So that’s 70 to 80 percent of the wealth in the top ten percent of hands. Who are not the people who have been long term unemployed. Exactly where am I supposed to get the capital to start a business?

... May 25, 2014 at 4:51 pm

I find it funny how many Dems want people to tear their families apart by having the parents live in different parts of the country. Sure, I could move to North Dakota. And for my family to come with me it means my wife giving up her job, us selling the house. Spending a lot of the proceeds from selling the house (we’d be lucky to get $40,000 for it) would go toward buying winter gear for us to survive the 8 months of winter they get every year in North Dakota

all for the POSSIBILITY that I might be able to get a job in a field of work that I’ve never had anything to do with.

Alternately, I go to North Dakota alone, the wife and child stay here, and if I get a job I send all the money back here so Kim can pay for day care while she works.

Yeah, that’s good, that’ll work. Great job. And that’s assuming Michael and his boys in Congress and the White House don’t shut down the carbon industry entirely, as they so desperately want to do. (Can’t have a growth industry in the USA, that doesn’t contribute to the B+ economy.)

... May 25, 2014 at 4:54 pm

Sounds like a lot of potential entrepeneurs to me.

Why the Hell should any of those folks start a new business? How many of those ten percenters are living off industries supported by the government? They’ve got no reason to put their necks and their wealth on the line. Instead, they can save up to buy another vacation house (built by Mexicans, no doubt) in some nice sunny place with golf courses.

Dave Schuler May 25, 2014 at 5:21 pm

Why the Hell should any of those folks start a new business?

As Napoleon put it, the two great motivators are the fear of loss and the hope of gain. I think that both should be harnessed to incentivize business formation.

Ben Wolf May 25, 2014 at 5:41 pm

Give every American a job offer in their community, or not if they’d like to go elsewhere, utilizing their skill set or one they would like to learn. Now you have well a national apprenticeship program with guaranteed employment at the end of your training, or a works program producing socially beneficial goods and services, while businesses gain a more dynamic and adaptable workforce. There’s no hard limit on the kind of training that can be offered. We can even train doctors and scientists via program extensions.

We need wildlife tunnels under our major highways, cleaned up super fund sites, wetlands restoration, large-scale alternative energy installation, coastal defenses against rising sea levels, refurbishing of housing and commercial structures for greater energy efficiency, day care services for any family needing them.

Feel free to add to the list. The only limits are resources and will.

michael reynolds May 25, 2014 at 6:11 pm

I’m asking this out of genuine curiosity, not looking to bust balls. If there were a WPA-style program, that had jobs near enough for you to commute, doing something like rehabbing a park or tearing down abandoned buildings or whatever, that paid maybe $16 an hour – double Florida minimum wage – would you take it?

michael reynolds May 25, 2014 at 6:21 pm

Ben:

The problem is that the long-term unemployed don’t seem to be like Ice, they seem more likely to be guys who were making 10 or 15 an hour doing the kinds of work that pays 10 or 15 an hour. So the skill sets we’re talking about may be things like frying burgers, unloading trucks, driving cabs, stocking shelves, etc… Those are not skills we need more of and it wouldn’t make much sense to be training people to stock Wal-Mart shelves.

I don’t see how we finance millions of jobs and yet match them with individuals in every possible location. That seems logistically impossible. I understand saying, “The wetlands need 20 guys to wield shovels.” I even understand how we could say “well, what the hell, lets build a road from nowhere to some other nowhere.” (In California we call that our high speed rail plan.) But employing existing skills and teaching new skills gets complicated.

Guarneri May 25, 2014 at 9:36 pm

“I won’t bother pointing out that the growers like using Haitians now for the same reason they liked using poor blacks in the past – namely that they’re easier to push around and abuse.”

As I know someone who runs the ops for a packer I can tell you that is just flat damned wrong. You are showing signs of ‘Reynolds Disease.’ Can’t make a logical, fact based argument, just hurl wild assed emotional charges. Who’s playing the race card now, – - – ?

Ben Wolf May 26, 2014 at 4:23 pm

Michael,

I don’t see how we finance millions of jobs and yet match them with individuals in every possible location. That seems logistically impossible. I understand saying, “The wetlands need 20 guys to wield shovels.” I even understand how we could say “well, what the hell, lets build a road from nowhere to some other nowhere.” (In California we call that our high speed rail plan.) But employing existing skills and teaching new skills gets complicated.

I agree with what you’re saying; there’s no way a centralized program is going to successfully employ millions without moving them around. I would suggest the answer lay in a decentralized approach with positions being created and administered at the local and community level.

Effectively you’d get together with your neighbors, which I admit would make me shudder given I hate meetings, and work out for yourselves what sort of things your community could use to enhance quality of life. If someone can only have a job created for them in the community five miles away, well there’s a reason right there for public transportation.

michael reynolds May 26, 2014 at 11:18 pm

Interesting idea. I agree with your qualms about interacting with humans, but interesting despite that.

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