Main Street

Read of the Week

The read of this week is Andy Kroll’s in-depth look at long-term unemployment.

This terrific piece uses one man’s story—Rick Rembold, a former manufacturing worker in Indiana—as a lens to focus in on broader context like this:

In one study, male Pennsylvania workers with high seniority experienced a 50% to 100% spike in mortality rate in the first year after job loss. The life expectancies of those laid off after age 40 decreased by one to one-and-a-half years. In the long run, these laid-off Pennsylvanians suffered a 15% to 20% reduction in earnings. Those hardest hit in terms of lifelong earnings, economists found, were not low-skilled laborers or highly skilled wealthy elites, but workers who had managed to forge a middle-class lifestyle.

Suicide rates also increase, researchers have found, when unemployment rises. (In Elkhart County, where Rembold lives, suicides exceeded the annual average by 40% last year.)

The 1980s recession in Pennsylvania was no outlier either, economic researchers have discovered, and the effects of long-term unemployment spread well beyond directly afflicted workers. In the short run, for instance, a child whose parent loses his or her job is 15% more likely to repeat a grade year in school, according to University of California-Davis economists Ann Huff Stevens and Jessamyn Schaller. This is especially true for children with less-educated parents.

And this:

Rembold gnaws on the question. “I can’t afford my home at $8 or $10 an hour,” he finally replies. Right now, he’s getting by on unemployment checks, a small inheritance from his mother that’s rapidly dwindling, and loans from family members. Still, he’d rather keep trolling the job boards in the hopes of finding something offering a living wage. “I’ve got a mortgage to pay, for Christ’s sake,” he told me. The few openings he sees with good pay, however, involve odd hours, dusk-to-dawn shifts that would mean he’d almost never see Terri, whose schedule at an aluminum company in Elkhart is early morning to mid-afternoon.

And then, under the dollar signs lurks something else: self-respect. Unlike his father, Rembold never went to college, and doesn’t consider himself too good for service-sector jobs. But he visibly agonizes over the fact that, as a 56-year-old man with decades of experience, he’s competing with people half his age for low-wage jobs. After all, as a machine operator fresh out of high school at White Farm Equipment, he earned $8.64 an hour. That was 1976. Adjusted for inflation, that’s equivalent to $42.42 today. No wonder the man’s reluctant to flip burgers or trim hedges for $9 an hour.

All those calls for people to just get a job at McDonald’s—never mind that even McDonald’s doesn’t have jobs for everyone, and that lots of unemployed people have tried to get those jobs—all those calls ignore that those jobs don’t actually pay enough to live on. And that if our society’s default position is “if you lose a job that pays $20 an hour, you should be happy to replace it with a job that pays $9 an hour,” something is very wrong. Where are we headed if that’s the case? With Senate candidates around the country suggesting that the minimum wage should be eliminated or even that it’s unconstitutional, or just that it should be lowered, what’s the next step? If these politicians succeed at lowering or abolishing the minimum, when a wave of people making $9 an hour lose their jobs, will we hear a clamor about how they should just take some of the new $4 an hour jobs?

In any case, this article wraps together one man’s story as he applies for job after job, the declining availability of good jobs at good wages, and the effects and prevalence of long-term unemployment today. Definitely worth a read.

Tags: minimum wage, unemployment