24 April 2016

Bad Job Markets Kill People

Everyone knows that bad foreign policy kills. Failure to intervene can essentially sanction genocide and willingness to intervene can mean prolonging or exacerbating a civil war.

Domestic policy kills as well. Business cycles are inevitable but they can be made more severe or more prolonged by bad policy. And when unemployment goes up, so do suicide rates.

Suicide rates rose 24% from 1999 to 2014. The biggest jump was from 2006 to 2014, when so many lives were financially devastated.

Anyone puzzled over Sanders' or Trump's support fails to appreciate the emotional toll of the last decade. This is not something people recover from easily or quickly.

Last decade was devastating in terms of job growth.

In the last three decades of the 20th century, the American economy created roughly 20 million jobs per decade, a rate equal to about 9% of the population. In the first decade of this century, the economy LOST 1.1 million jobs. And now in this second decade, it's on pace to create nearly 23 million jobs, but a number equal to only 7% of the population. We're on track for a good but not great decade. The rate of job creation is decent but the state of the job market is still impacted by this awful decade defined by a dot-com bust, a 9/11 recession, and the Great Recession. It looks like it will take at least a decade to recover from the last decade and of course even that glosses over hundreds of thousands of lives that will never fully recover from lost pensions, homes, and years of employment.

As mentioned, business cycles are inevitable. Still, policies can make the difference between long or short, deep or shallow recessions. And it's not just abstract numbers like unemployment that are impacted when we get these policies wrong. It's actual lives.

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