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December offers a built-in reprieve from the harsh economic buffeting of recent years. Stores slash prices, customers shop, and boom-time cheer returns. This holiday season, however, many Americans are still hoping for the basic gift of a job. For the third straight year, the nation is likely to ring in New Year’s Day with an unemployment rate of around 8.6 percent.
A succession of federal bailouts — of large banks, financial services companies, and the auto industry — has shown that, in dire cases, the government will act as a bank of last resort. But for many American workers, an employer of last resort is hard to find. “What if we thought of people as too big to fail?” asked Alexander Keyssar, Matthew W. Stirling Jr. Professor of History and Social Policy.
It’s a provocative question, and one that professors, researchers, and others at Harvard are working to address. But fixing America’s long job slump will require more than just government intervention, they say. Getting people back to work also will take creative solutions from business, nonprofit, and higher education leaders.
Counting the uncounted
The history of formally counting the unemployed began in Harvard’s home state in the 1870s. But the way that employment was then measured bears little resemblance to the monthly figures trumpeted in headlines now, said Keyssar, author of “Out of Work: The First Century of Unemployment in Massachusetts.”
The first surveys relied on federal and state census data to gauge the percentage of people unemployed at any point in the previous year. Between 1880 and 1930, about 20 to 35 percent of Americans were jobless for some period each year, according to Keyssar — a number that sounds catastrophically high to the modern ear. Because of the recent recession, the number of Americans who have been unemployed at some point in the past year is again near 20 percent, he estimated.
But with the help of innovative policies, Keyssar believes, workers can bounce back into jobs more quickly.
Policies tying layoffs to guaranteed entry to job training programs would help less-skilled workers to transition, he said. (Of course, traditional education helps, too. The unemployment rate for workers with college degrees is half that of their non-degree-holding counterparts.) Stronger union protections would help to reverse the trend of declining benefits and job security in working-class occupations in service and manufacturing, he added.
The federal government should prioritize funding for unemployment benefits, which are worth much less in most states than they were decades ago, Keyssar said.
Focus on the family
As the United States copes with long-term unemployment, analysts said it’s also important to ramp up social supports. Unstable finances can create unstable families, said Kathy Edin, a professor of public policy and management at the Kennedy School.
As blue-collar jobs vanish, white, working-class communities in particular have seen an increase in divorce rates, as have what Edin calls “fragile families” — cohabiting couples raising children outside of marriage, who face a higher probability of splitting up. Edin said that increasingly complex family structures can put financial pressures on families and on single parents, while creating emotional pressures on children, compounding the cycle of poverty.
“If you can’t give couples some foothold on economic stability, you’re just going to increase divorces,” Edin said. There is some evidence that “modest economic investments in couples’ economic lives can increase disadvantaged couples’ stability pretty dramatically,” Edin said.
Many low-income couples whom Edin has studied would rather raise their children in a two-parent family, she said, but are reluctant to marry if they’re not financially stable. “I think we can do a lot to help them do that — not by preaching, but by simply giving them the tools to stay together.”
A Role for nonprofits
As the economic doldrums drag on for many, charitable donations and government supports sag. So nonprofit organizations — especially those helping the unemployed and the poor — are adjusting to “the new normal,” and in many cases have to do more with less.
“This isn’t a short-term crisis that [nonprofits have] to get used to,” said Jim Bildner, a senior research fellow at the Kennedy School's Hauser Center for Nonprofit Organizations. “It is a more profound strategic challenge,” exacerbated as nonprofits and foundations find themselves filling gaps in the societal safety net that historically were filled by government. Housing, shelters, food pantries, and other critical services are increasingly displaced to the nonprofit sector, he said.
To meet these challenges effectively, he added, many nonprofits are narrowing their focus and focus on their core functions. But they also have a role to play in helping the jobless to get back on their feet.
“Where nonprofits can be particularly effective is in helping change the conditions that surround the unemployed [by offering] job training and other supportive services that make future employment opportunities more likely,” he said. Read More
Alexander Keyssar, Matthew W. Stirling Jr. Professor of History and Social Policy
“What if we thought of people as too big to fail?” asked Keyssar.
Kathy Edin, professor of public policy and management
Photo Credit: Martha Stewart