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Watch: Economists Dean Baker '80 and Kevin Hassett '84 Call for Action to Address "National Emergency" of Unemployment

Washington policy economists Dean Baker '80 and Kevin Hassett '84 recently wrote an op-ed in the New York Times Sunday Review, "The Human Disaster of Unemployment,"  and later appeared on an episode of PBS News Hour, "Unemployment: Addressing a Worsening 'Human Disaster' in U.S." to discuss the subject further (8:01 min.).


Baker is co-director of the liberal Center for Economic and Policy Research. Hassett is director of economic policy studies at the conservative American Enterprise Institute and an adviser to the Romney campaign. The op-ed piece wasn't connected to the campaign. Below, an excerpt from the NYT op-ed and a partial transcript of the PBS News Hour.

New York Times Sunday Review: "The Human Disaster of Unemployment"

The American economy is experiencing a crisis in long-term unemployment that has enormous human and economic costs. In 2007, before the Great Recession, people who were looking for work for more than six months - the definition of long-term unemployment - accounted for just 0.8 percent of the labor force. The recession has radically changed this picture. In 2010, the long-term unemployed accounted for 4.2 percent of the work force. That figure would be 50 percent higher if we added the people who gave up looking for work. Long-term unemployment is experienced disproportionately by the young, the old, the less educated, and African-American and Latino workers...

The result is nothing short of a national emergency. Millions of workers have been disconnected from the work force, and possibly even from society. If they are not reconnected, the costs to them and to society will be grim...

Policy makers must come together and recognize that this is an emergency, and fashion a comprehensive re-employment policy that addresses the specific needs of the long-term unemployed. A policy package that as a whole should appeal to the left and the right should spend money to help expand public and private training programs with proven track records; expand entrepreneurial opportunities by increasing access to small-business financing; reduce government hurdles to the formation of new businesses; and explore subsidies for private employers who hire the long-term unemployed. Those who hire for government jobs must do their share, too: managers who are filling open positions should be given explicit incentives to reconnect these lost workers.

Every month of delay is a month in which our unemployed friends and neighbors drift further away.

PBS News Hour: Unemployment: Addressing a Worsening 'Human Disaster' in U.S.

 Jeffrey Brown (Host): Finally tonight, an unfolding national emergency of long-term unemployment.

According to Labor Bureau statistics, some five million Americans have been looking for work for more than six months, a percentage of the overall work force that's grown dramatically in the last several years. ... This idea of a national emergency, that's your term, both of your terms. What do you mean? What -- is it a new emergency?

Dean Baker, Center for Economic and Policy Research: Well, it's a worsening emergency. I mean, obviously, this is getting worse by the month, which is one of our points. But we have been lucky in a sense that historically the United States has not had a big problem with the long-term unemployment, that in general if we go back before the downturn, the long-term unemployed, people unemployed more than six months, were less than eight-tenths of a percent of the work force.

This is something that's a result of the prolonged downturn, that we have had a severe downturn. It's lasted a long time. And the numbers of long-term unemployed just keep going higher.

Brown: And, Kevin Hassett, who is most affected? Who are we talking about?

Kevin Hassett, American Enterprise Institute: Well, I think that we're seeing is that over time people that have become more affected or most affected are folks that are a little bit on in age, people above 50, people above 60, because folks who are younger are more likely to be fired, but they're also more likely to be hired.

And so if you let a long-term unemployment problem run for a few years, what you end up with is a large group of older workers that have a hard time reattaching. And an economist can tell you why that is. If a firm brings in a new person, they have to invest in training somebody.

And if they're on in age, then maybe they are not going to have a big payback period afterwards. But it's a real urgent problem...

Brown: And one of the things you both -- you talk about here is the physical and psychological impact of that. You want to tackle that one?

Hassett: Right. I mean, it's really chilling. I think, in some ways, losing one's job is like having a death in the family. The statistics are -- really were shocking to us as we dug into them. The fact is that if somebody loses their job, then, in the year after their job, the probability of them dying is 50 to 100 percent higher.

Being separated from your job can take about a year-and-a-half off your expected life. And there are reasons for that. One is that the suicide rate is higher. Dean and I calculated that right now because of the higher long-term unemployment, it's probably the case there are about an extra 130 or so suicides a month, because of just the terrible stress that people go under when this happens.

Too many people, too many of us think of our job as our life. And so when you take the job away from someone, you can take away almost everything...

Brown: Beyond work-sharing, do you see evidence in the world in which you both live of a willingness of left and right to come up with other solutions? Because here we are, of course, in another campaign season.

Baker: Well, I think part of Kevin and my motivation was to make sure this stays on the agenda. And there should be a sense of urgency about it. And we wish we could say here's three things you can do that we know will work. Kevin and I went back and forth. Okay, what do we think will work? All we can say is there are some things you could try. There's been some success with training programs, some success with public employment.

We can go down the list. There's no -- everything we say, someone can get up there and go, oh, but what about this, what about that, what about that? The important thing is this is -- you have a lot of people in a really desperate situation. We should be trying. We should be experimenting.

Hassett: And the thing I want to add too is that this is kind of a new problem for America. You have to go back to the Great Depression before you see numbers like what we have. And what Dean and I wanted to accomplish in this piece is to just get everybody thinking about this national emergency. It's kind of time for a Manhattan Project...

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