The Crisis of Joblessness in America

By Mark Engler

To the teacher:

For nearly three years, Americans have been facing a serious economic challenge. In late 2007 and early 2008, the country's unemployment rate began to rise sharply. As of July 2011, 13.9 million Americans were unemployed. Chances are good that most of your students know someone who is out of work.

But just how bad is the unemployment crisis? And what does it mean to be an unemployed person in America today?

The lesson below includes two student readings, followed by questions for class discussion and an opinion continuum exercise (also called "social barometer"). The first reading provides students with some historical context for the current unemployment crisis and describes the human impact of joblessness. The second reading looks at how government policies and proposals might affect the unemployment crisis. This includes a discussion of the budget deals negotiated between Democrats and Republicans this summer, as well as President Obama's proposed jobs program. The questions that follow the readings encourage students to think critically about the issue of unemployment and the government's responses, and to relate them to their own experiences.

Student Reading 1:
How Bad Is America's Unemployment Crisis?

Few things are more important in most peoples' lives than their jobs. We use jobs to measure everything from individual success to the overall health of our economy. The very high level of joblessness over the last several years is a clear indication that the country's economy is in crisis.

The most widely cited statistic used to discuss joblessness is the unemployment rate. This measure takes the total number of unemployed people in the country and divides it by the total labor force. Over the past few decades, the unemployment rate in the United States has tended to fluctuate between 4 and 6 percent. The current unemployment rate is stuck at approximately 9 percent.

The economic meltdown, which witnessed the collapse of a number of major financial institutions in 2008, caused a ripple effect that shook nearly all sectors of the economy. In late 2007, the unemployment rate, which had for the previous two years remained steady at around 4.5 percent, began to rise dramatically. By the end of 2008 the unemployment rate had reached 7.3 percent. It peaked in late 2009, reaching 10.1 percent in October of that year. Since then it has dropped slightly, but it remained around 9 percent through the first half of 2011.

The line graph below shows what this means in terms of the total number of people who are out of work:

At the highest point of unemployment, 15.6 million people were without work in America. Currently, 13.9 million who want work cannot find jobs.

For young people, finding a job is especially hard. People aged 16 to 24 (which of course includes many high school and college students and recent graduates) have a higher unemployment rate than the general population. Between the beginning of 2008 and July 2011, the unemployment rate within this age bracket rose from 14 percent to 18.1 percent. When general unemployment is high, businesses tend to hire older and more experienced workers for positions that had previously been considered "entry-level" - making it extra hard for younger people to be hired.

Another telling statistic is the "average duration of unemployment." For much of the past 50 years, this number has fluctuated between 10 and 20 weeks. In the current economy it is taking people much longer, on average, for people to find work.The average length of time that people remain unemployed has skyrocketed since early 2008 to over 40 weeks - 10 months, on average - far above the norm since 1948:

While statistics about joblessness provide insight into the state of the economy as a whole, they give little sense of the personal toll that unemployment takes on individuals. In many cases, the experience of being unemployed comes with great personal anguish. To open a window into this emotional dimension of unemployment, the Washington Post has featured the stories of several job seekers.

Among them is Stephanie Dudgeon, 48, from Columbus, Ohio, who has shared her experience being unemployed in a series of blog posts. In a post from July 2011, she describes the anxiety she's been feeling:

"Sometime in the spring, I began to notice job openings beginning to dwindle. I remember the gloomy spring day when I had a panic attack and a flood of horrifying scenarios began running through my mind. Said fears ranged from becoming homeless, to being unable to obtain basic medical care, to being unemployed forever. That was when persistent dread and amplified anxiety entered my daily existence."
(http://www.washingtonpost.com/conversations/frustrated-in-columbus-ohio/2011/07/29/gIQAMR5khI_story.html)

Dudgeon's fears are shared by many contributors to the Washington Post series, and no doubt by countless others who have struggled with unemployment during this economic downturn. The experience of being unemployed for nearly a full year leads many people to blame themselves for not finding a job. As Dudgeon goes on to note:

"One of the more painful parts of being unemployed has been a growing feeling of failure. This weekend, my graduating high school class will be having a reunion. But I won't be there because I dreaded the prospect of being repeatedly asked, 'What do you do now?'"

For Discussion:

1. Do students have any questions about the reading? How might they be answered?

2. What does unemployment rate measure? How is it calculated? How does unemployment in the past three years compare with historical trends?

3. What are some other ways to talk about issues of joblessness in this country? Do you think that the length of time that people spend looking for work is a relevant measure of the crisis? How does this measure provide different insights into the unemployment situation?

4. Do you know people who have been unemployed? If so, what has their experience been? Have you or your friends struggled to find jobs?

5. Do you think Stephanie Dudgeon's experiences are common? What are the advantages or disadvantages of personal stories as a way of understanding the issue, as compared to using statistics?

Student Reading 2:
The Government Response On Jobs

As the country has struggled with joblessness, politicians in Washington DC have been debating about how government should respond. Conservatives argue that the most important thing the government can do is cut taxes. They argue that with the dollars they save on taxes, "job creators" - like entrepreneurs and corporations - will begin hiring again. And consumers will spend those extra dollars on goods and services, boosting the economy.

While conservatives see "small government" as a positive, cutbacks in government funding have already caused steep cuts in social services. Many states facing budget deficits have responded by scaling back funding for higher education and early childhood programs, among other services, and cutting government employment, including police officers.

This summer, Republicans resisted raising the country's debt ceiling (risking government default) unless Democrats agreed to a deal to dramatically cut government spending over time. The deal they agreed to, and President Obama signed, calls for $917 billion in spending cuts over the next decade in return for a two-stage increase in the debt ceiling. A 12-member congressional committee made up of six Republicans and six Democrats was charged with finding $1.5 trillion in further deficit reductions, which Congress must approve by December 23, 2011.

Many economists argue that such cuts - especially at a time of economic distress - only exacerbate the problem, and drive unemployment higher. In fact, they maintain, increased government spending could reinvigorate the economy, which would in turn lead to higher revenues and a drop in the deficit. Economist and author Robert Reich, the Secretary of Labor during the first Clinton administration, wrote an article arguing that the government should spend more to spur the economy and stimulate job creation:

The only way out of the vicious economic cycle is for government to adopt an expansionary fiscal policy - spending more in the short term in order to make up for the shortfall in consumer demand. This would create jobs, which will put money in peoples' pockets, which they'd then spend, thereby persuading employers to do more hiring. The consequential job growth will also help reduce the long-term ratio of debt to GDP. It's a win-win.

This is not rocket science. And it's not difficult for government to do this - through a new WPA or Civilian Conservation Corps, an infrastructure bank, tax incentives for employers to hire, a two-year payroll tax holiday on the first $20K of income, and partial unemployment benefits for those who have lost part-time jobs.

Yet the parallel universe called Washington is moving in exactly the opposite direction. Republicans are proposing to cut the budget deficit this year and next, which will result in more job losses. And Democrats, from the President on down, seem unable or unwilling to present a bold jobs plan to reverse the vicious cycle of unemployment. Instead, they're busily playing "I can cut the deficit more than you."
(http://www.commondreams.org/view/2011/07/25-7)

On September 8, 2011, President Obama stood before a joint session of Congress to propose a new bill designed to address the unemployment crisis. Called the "American Jobs Act," the bill includes $200 billion in spending on things such as school repair, transportation networks, and preventing teacher layoffs, as well as $240 billion in tax cuts to small businesses and a temporary payroll tax cut.

The president later outlined a plan to reduce government spending in other areas, including cuts to Medicaid (a healthcare program for the poor), Medicare (for the elderly and disabled), and cuts in military spending. He also proposed raising revenue by raising taxes on the very wealthy.

Republicans responded that the president was engaging in "class warfare" against the rich. "Veto threats, a massive tax hike, phantom savings and punting on entitlement reform is not a recipe for economic or job growth - or even meaningful deficit reduction," charged Senate Republican leader Mitch McConnell.

However, the liberal tax analysis group Citizens for Tax Justice pointed out that Obama's plan would cut taxes overall, not raise them. In particular, the plan allows most of the huge tax cuts to the rich passed under the Bush administration to continue, costing the government some $3 trillion in lost revenues over the next ten years. (http://www.ctj.org/taxjusticedigest/archive/2011/09/ctjs_statement_on_president_ob.php)

In any event, it is unlikely that the president's bill will pass, considering the staunch opposition of Republicans in Congress to any new spending measures. Meanwhile, grassroots groups around the country representing the political spectrum from left to right are organizing for the reforms they believe will restore America's troubled economy.

For Discussion:

1. Do students have any questions about the reading? How might they be answered?

2. What do conservatives advocate as a response to financial difficulties being faced at the state and federal levels? Why do some economists argue that this will make the situation worse?

3. What response has President Obama proposed? Do you think it will be effective?

4. Do you think that government should take an active role in fighting unemployment, or do you think that this should be left to the private sector?

5. What do you think average citizens can do to influence the policies in Washington?

Opinion Continuum

To introduce this activity, tell the students you'll say a statement (such as the ones listed below). Designate one corner of the room for "strongly agree," the opposite corner for "strongly disagree," and the middle for "not sure." Ask students to go to the appropriate place according to whether they agree with the statement, disagree, or aren't sure.

Once students have taken their places, ask for volunteers from each location to explain their opinion. Encourage some dialogue among students with differing opinions. If students change their minds in the course of the discussion, they can change places.

1. A lot of people who are unemployed are just lazy. They're not trying hard enough.

2. The government should play a direct role in creating jobs, like it did during the Depression.

3. Small businesses create the most jobs, so government policy should focus on easing the burdens small businesses face.

4. The government needs to provide a social safety net for those who cannot find work.

This lesson was written for TeachableMoment.org by Mark Engler. Research assistance provided by Eric Augenbraun.We welcome your comments. Please email them to: lmcclure@morningsidecenter.org.

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