Unemployment Forever

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Is our high unemployment problem mostly structural — lots of people have been laid off in a few specific industries and can’t be rehired until they’ve been trained for others — or mostly cyclical — people just aren’t buying stuff so companies everywhere aren’t hiring new workers? A bit of both, probably, but the evidence suggests pretty strongly that it’s mostly cyclical. If it were structural, some industries would have high unemployment and others would have low unemployment, but in fact unemployment is spread pretty evenly around the whole economy. People are cutting back on everything and every sector is suffering.

This is good news, in a sense, since cyclical unemployment is easier to deal with. Unfortunately, we’re not dealing with it, and Brad DeLong sounds the alarm:

The overwhelmingly likely possibility is that at the moment little of our unemployment is “structural,” but that if demand is not boosted to reduce cyclical unemployment that it will turn into structural unemployment and then be with us for a decade or more. The fact that cyclical unemployment turns into structural unemployment is a possibility that adds immense urgency and power to the case for more demand stimulus right now.

That’s obviously not going to happen, since rich people don’t really object much to high unemployment (it helps keep wages down, after all) and rich people hold the whip hand over Congress. So that leaves the Fed. Unfortunately, rich people hold the whip hand over them too, so they’re not doing anything either. Basically, all of us non-rich folks are screwed. But I’ll bet the tea party’s billionaire funders are all pretty happy.

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Thank you!

We didn't know what to expect when we told you we needed to raise $400,000 before our fiscal year closed on June 30, and we're thrilled to report that our incredible community of readers contributed some $415,000 to help us keep charging as hard as we can during this crazy year.

You just sent an incredible message: that quality journalism doesn't have to answer to advertisers, billionaires, or hedge funds; that newsrooms can eke out an existence thanks primarily to the generosity of its readers. That's so powerful. Especially during what's been called a "media extinction event" when those looking to make a profit from the news pull back, the Mother Jones community steps in.

The months and years ahead won't be easy. Far from it. But there's no one we'd rather face the big challenges with than you, our committed and passionate readers, and our team of fearless reporters who show up every day.

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