What can be done about mass unemployment? All the wise heads agree: there’re no quick or easy answers. There’s work to be done, but workers aren’t ready to do it—they’re in the wrong places, or they have the wrong skills. Our problems are “structural”, and will take many years to solve.
But don’t bother asking for evidence that justifies this bleak view. There isn’t any. On the contrary, all the facts suggest that high unemployment in America is the result of inadequate demand. Saying that there’re no easy answers sounds wise. But it’s actually foolish: our unemployment crisis could be cured very quickly if we had the intellectual clarity and political will to act. In other words, structural unemployment is a fake problem, which mainly serves as an excuse for not pursuing real solutions.
The fact is job openings have plunged in every major sector, while the number of workers forced into part-time employment in almost all industries has soared. Unemployment has surged in every major occupational category. Only three states, with a combined population not much larger than that of Brooklyn, have unemployment rates below 5%. So the evidence contradicts the claim that we’re mainly suffering from structural unemployment. Why, then, has this claim become so popular?
Part of the answer is that this is what always happens during periods of high unemployment—in part because experts and analysts believe that declaring the problem deeply rooted, with no easy answers, makes them sound serious.
I’ve been looking at what self-proclaimed experts were saying about unemployment during the Great Depression: it was almost identical to what Very Serious People are saying now. Unemployment cannot be brought down rapidly, declared one 1935 analysis, because the workforce is “unadaptable and untrained. It cannot respond to the opportunities which industry may offer.” A few years later, a large defense buildup finally provided a fiscal stimulus adequate to the economy’s needs—and suddenly industry was eager to employ those “unadaptable and untrained” workers.
But now, as then, powerful forces are ideologically opposed to the whole idea of government action on a sufficient scale to jump-start the economy. And that, fundamentally, is why claims that we face huge structural problems have been multiplying: they offer a reason to do nothing about the mass unemployment that is crippling our economy and our society.
So what you need to know is that there’s no evidence whatsoever to back these claims.We aren’t suffering from a shortage of needed skills; we’re suffering from a lack of policy resolve. As I said, structural unemployment isn’t a real problem, it’s an excuse—a reason not to act on America’s problems at a time when action is desperately needed.
