BERKELEY – The United States today is facing a crisis of long-term unemployment unlike anything it has seen since the 1930’s. Some 40% of the unemployed have been out of work for six months or more, which, as US Federal Reserve Board Chairman Ben Bernanke noted in a recent speech, is far higher than in any other post-World War II recession.
This crisis of long-term unemployment is having a profoundly damaging impact on the lives of those bearing the brunt of it. We know this thanks to a series of careful studies of the problem conducted in the depths of the 1930’s Great Depression.
The most famous such study, of the long-term unemployed in New Haven, Connecticut, was conducted by E. Wight Bakke, a graduate student and subsequently a professor of economics at Yale University. Through participant interviews, personal observation, time diaries, and longitudinal studies, Bakke showed how extended spells of unemployment caused workers’ skills to deteriorate and made it difficult for them to acquire new ones. The long-term unemployed also experienced a variety of physical and psychological problems, among them demoralization, apathy, and a sense of social isolation.
For those unfortunate enough to experience it, long-term unemployment – now, as in the 1930’s – is a tragedy. And, for society as a whole, there is the danger that the productive capacity of a significant portion of the labor force will be impaired.