The Catastrophic Effects of Longterm Unemployment Are Already Starting

IMG_0094Longterm unemployment is one of the biggest problems facing our country yet no one mentions it. The media hardly covers the situation. President Obama mentions it in passing but hasnt done anything since a half hearted Jobs Bill in September of 2011. John Boehner, Harry Reid, Nancy Pelosi, Mitch McConnell never talk about or suggest more ways to get people back to work. According to The Wall Street Journal the amount of people who are longterm unemployed hasnt been seen since the Great Depression and the length of  time these people are unemployed is unprecedented, even worse than the 1930s. The unemployment rate is dropping because people are giving up and dropping out of the workforce. Last month it was 300,000; the month before it was 800,000. We have the lowest workforce participation in generations. Yet all of this is ignored while the GOP plays hostage taking games with defaulting on the U.S. debt. When they tried the same stunt last year it drastically slowed the economy, slowed hiring and added to the deficit since more people were laid off and fewer people found jobs. I actually dont blame the entire GOP; I put direct blame on the tea party. Their unwillingness to come to a Grand Bargain is one of the sources of the dire state of hiring. I do believe the party leaders, like John Boehner and Mitch McConnell and others would strike a compromise for a Grand Bargain. But the tea party won’t vote for it so the party leaders are stuck. The irony, of course, is that the tea partys goal is to lower spending, but their actions make the government need to pay and borrow more because all of this posturing and uncertainty makes companies hire fewer people.

There were two disturbing articles in todays papers that reflect the effects of longterm unemployment.  The Washington Post ran a front page story on how Americans are draining their 401k and IRS accounts; I know and have been in contact with many on twitter who have done the same. This is because there is no financial help from the government after 99 weeks and more than 10 million have been unemployed longer than that. The second article, on the front page of the New York Times stated how more and more people are going deeper and deeper into debt. This I also attribute to people running out of money, the longterm unemployed who cant find jobs are running out of money. Both of these articles show the start of what could be a complete catastrophe in the coming years and decades for the United States. What is going to happen to these people once they run out of their IRA and reach their credit limit? The answer to that question is extremely scary and something that is not talked about in the media, its ignored in Congress and by the president. There was another recent article I read in WSJ that said that if stimulus was provided for enough people to get back to work and raise GDP by just 1% point, costing maybe $400 Billion, the taxes from those people working would save the U.S. Treasury $4 Trillion over 10 years. Thats staggering, yet its ignored.

What needs to happen is action. Our paralyzed government needs to actively help longterm unemployed people get back to work. People who are longterm unemployed dont want to have to live off of government support, no one does. They want to work, bring home a paycheck, bring purpose back to their lives. It is in our reach to create programs, tax incentives, stimulus, whatever it takes, the goal of getting these people back to work is attainable. As I have said before, in my view the tea party with their non compromising actions are treasonous; I would like to see them criminally prosecuted for deliberately tanking the U.S. economy. Threatening default, something that has never happened in the history of this country, is a criminal act. Working out a Grand Bargain is what should be done. All of this bickering is a waste of time. They need to sit down and get the job done. Every day that goes by thats wasted with threats is another day another longterm unemployed person takes money out of their IRA, goes deeper in debt to buy food that they cant afford.

Fast forward 20 years from now. If nothing is done to help these people this country could be littered with homeless people, more violence from people who are angry at the world, or people wanting to feed their families. Or we really could become a welfare state and government spending would have to skyrocket to help these people who went from longterm unemployed to destitute. No one wants to see that happen. The financial and psychological effects of longterm unemployment are disastrous.

You have 25 million people who are unemployed or under employed; you have more than 10 million people who have been out of work for over two years. They all want jobs. We are the richest nation on earth with the worlds largest economy. We have the resources to help the longterm unemployed find work. Now we need the will of our government to take action.

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9 thoughts on “The Catastrophic Effects of Longterm Unemployment Are Already Starting

  1. Well Done Andrew ~ Many fine & true points BUT I do not agree that it is ENTIRELY the tea party’s fault ~ It is many in our government that have ignored & obstructed. The long term unemployed have been ignored way too long, hoping we will go away, We would not have the failing economy we have today if a good portion of unemployed were working, paying taxes & contributing financially to society.

    1. As always, thanks for reading and commenting. I might not have been clear enough, but I lay the blame with everyone in Washington, Obama, Reid, Pelosi, Boehner, McConnell and everyone else in congress. What I was blaming the tea party completely for is this waste of time with not compromising making threats. The tea party makes the situation worse, but I do blame every single person in Washington.

      1. Thank You for your response and clearing things up for me. I also blame MOST in Washing ton for their dysfunction and turning a blind eye to too many in need ~ Not just the unemployed.

  2. Well done, Andrew! I’m not sure I believe the jobs bill was half hearted, but I do agree that too much time time has been spent tryim tng to deal with the tea party. If only we could stop paying Congress for failing to do their jobs.

  3. I enjoyed the article but am disappointed by your obsession with the tea party. Threats and slowing down the process- come on. You know better. Imagine if there was no group trying to put a break on the spending. I’m sure you understand that the upcoming debit ceiling debate is replete with false accusations against Repbulican efforts to address spending. Morevover, the threat Obama/Dems scream about default is a strawman- as a businessman you know that they will still be able to pay bills. Hey, here’s an idea, pass a darn budget Democrats.
    In any event, enjoy your tweets and blog.
    Best,
    Mike Ruffing
    Contributor, The Brenner Brief
    http://www.TheBrennerBrief.com

    1. Hi Mike, thanks for reading and taking the time to respond. I do, however, disagree with your opinion though. Last summer Obama offered a grand bargain to Boehner, the reason that didnt get passed was the tea party refused to allow tax increases. This grand bargain would have saved $4T over 10 years. Like I said in the piece, I do believe Boehner and many other in the GOP would have voted for it, but, the tea party stood in the way. Their point is valid about reducing spending, and $4T seems like a great start. The threats to shut down the government or go over the fiscal cliff has soured consumer confidence which in turn lowers consumer spending and we know our 70% of GDP comes from consumer spending. This holiday seasons lack of spending shows that. Also, last summer when the threat was there to default, GDP slowed as did hiring. So the threats are in fact already having a negative effect. I see unemployment as a much larger issue, which is being completely ignored. Get people back to work, their tax revenue will do more in deficit reduction than just about anything.

      Thanks again for reading, Andrew

  4. Mahalo Andrew for your attention to this American crisis. Most definitely agree that this is not properly addressed in a purposeful and constructive way. I am 53, single Mom, and have been struggling for several years to remain gainfully employed. The problems are multi-faceted and there are barriers for people like me being able to secure jobs we deserve. Not only are the D.C. decision makers behaving like traitors, the workplace culture has shifted from when I was first employed. I believe that the private, public and independent sectors are run with a “middle-lower management” type mindset, where incompetence is celebrated. People no longer aspire for the entity to thrive, rather the expectations are limited to ass-kissing and non-performance.

    I have experienced both extremes. I have been fortunate to have worked alongside greatness, and subsequently rewarded in abundance. More recently, I have been under-employed and in positions where I have been subject to unspeakable and egregious treatment by “superiors”.

    While you discuss people that are in the process of having all financial resources depleted, you have not mentioned those of us who have now exhausted those resources. My UI ran out last month. Except for food stamps, I have nothing. Beginning this month, I have nothing coming in. I have several exciting opportunities on the horizon that I busted my ass to get, but it’s not happening today. I am among the “working unemployed”. These are people that have previously held upper management positions, and are constantly writing proposals, plans, networking, consulting, etc., in hopes of securing some kind of income.

    And finally, every mention of “long-term” brings about an overwhelming feeling of despair. There’s only so much despair and disappointment one can absorb before a situation becomes hopeless and desperate. I know there are a number of suicides by people that are otherwise “whole” except for the inability to secure stable employment. Without a livelihood, there is no tomorrow. I fight those feelings every day – push it way down, and pursue every opportunity because it keeps me alive another day. Today, I am meeting with the Mayor, several councilmembers, and the Dep. Attorney General to discuss a position that I created. None of them will know that I am facing homelessness this weekend, that I am on food stamps, and that my son has been deprived of many basic essentials. I literally do not know what will happen after today, where we will be, what garbage can we will be sleeping next to. Understand also, that I have tried to get jobs at places like Subway, Jack-in-the-Box, etc., but people like Paul “Get A Job” Ryan do not understand that you can’t make people hire you. And I started my own consulting business – I’m trying every angle, every day, until …

    I have been a staunch staunch supporter of President Obama since he first announced his candidacy. My only disappointment has been the UI situation for the long-term unemployed. My experience is that there’s absolutely nothing done to help people find any work. This is a situation that required some innovative, bold and creative ideas, and none have been forthcoming.

    I appreciated your article Andrew, and also appreciate the opportunity to vent as I will soon not have a phone, or internet access.

    Wish me luck today – aloha.

    1. I do wish you luck Vicki; your story is heartbreaking and I sincerely hope something good happens today or very soon. I am grateful that you shared your story and were able to vent on my blog. I would like the president and entire congress to read what you wrote. Far too many people think ‘oh just get a job’ when I know from experience that thats not the way it works. It sickens me that our government is posturing and fighting over nonsense when the real struggle is job creation and what happens when people cant find jobs. I want everyone to hear your story, because it really could be anyones story given some time. When you can please keep me posted on how things are going. I will be thinking about you and hoping for the best. Andrew

  5. And the sad part is, a lot of people who still have jobs aren’t even trying to prepare just in case they get laid off or fired too. And not to sound like a conspiracy theorist but this kinda sounds like the New World Order is slowly starting.

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