Paul Krugman | The Unlucky Unemployed

2014.6.3.Krugman.Unemployed.Main(Image: VAN DAM; Netherlands / CartoonArts International / The New York Times Syndicate)Matt O’Brien, a reporter at The Washington Post, recently wrote an interesting, if depressing, article on long-term unemployment in the United States, making the point that it is basically a matter of bad luck: if someone gets laid off in a bad economy, he has a hard time finding a new job; and the longer he stays unemployed, the harder it becomes to find work.

Obviously I agree with this analysis – and I’d add that Mr. O’Brien’s results more or less decisively refute the alternative story, which is that the long-term unemployed (people who have been without a job for six months or more) are workers with a problem.

You can see how this story might work. Suppose that workers have some quality – “sticktoitiveness,” or something – that doesn’t show up in official skill measures but which potential employers can intuit. Then workers lacking this ineffable quality would tend to lose their jobs and have trouble getting new ones; the difficulty the long-term unemployed have in job search would reflect their personal inadequacy.

Read between the lines of a lot of commentary on the unemployed – especially from those eager to slash benefits – and you’ll realize that something like this is the implicit underlying theory.

But here’s the thing: the association between worker quality and unemployment should be much stronger in a good economy than in a bad economy. In 2000, with labor scarce, there probably was something wrong with many people who got laid off; in 2009, it was just a matter of being in the wrong place. So if unemployment was about personal characteristics, being unemployed should have mattered less for job search after the Great Recession than before. What people are actually experiencing, of course, is the opposite.

In other words, it’s nothing personal; it’s the economy, stupid. And as Mr. O’Brien pointed out, this is one more reason that failing to provide more stimulus is a crime against American workers.