One of the most frustrating things about both the catfood commission's work and the ongoing discussions about "fixing" Social Security is that it seems to be happening in a vacuum in whichthe economic reality of recessions is not recognized at all. Which is kind of ironic, considering where we're at right now.
Via Ezra, the latest Pew report [pdf] on long-term unemployment should be what every policy maker in DC is talking about today.
Thirty percent of those who are jobless have been unemployed a year or more (long-term unemployment) as of December 2010. Equaling 4.2 million people -- roughly the population of Kentucky -- this is 25 percent more people affected by long-term unemployment than a year prior (December 2009, 3.4 million)....
Using the CPS data, Pew calculated that the persistent problem of long-term unemployment is occurring across education and age groups but those who are older than 55 are most likely to remain jobless for a year or more. Additionally, a high level of education only provides limited protection against long-term unemployment -- the rates are similar across degree attainment: Thirty-one percent of unemployed workers with a bachelor’s degree have been out of work for a year or more, compared to 36 percent of high school graduates and 33 percent of high school drop-outs.
Here's what that looks like.
Ezra:
Eventually, the unemployment rate in this country will come down. But it's very likely that there'll still be a core of a couple of million hardcore unemployed -- people who're a bit older, who're underwater on their houses in an area with a weak labor market, and who are becoming less employable as both their age and their time out of work come to seem more and more glaring on their resumes. What are we going to do for them?
In this light, James Galbraith's proposal to lower the retirement age makes even more sense, doesn't it?
