Binyamin Appelbaum at the New York Times compiled a substantial amount of research on the effects of unemployment. Unemployed persons tend to make far less once they regain employment, suffer negative health effects, lose their skills, and find it increasingly difficult to regain employment at all. I surveyed a variety of similar studies not too long ago and found similar data:

Being unemployed for a long period of time often causes one to grow distant from their friends, discord within families, and a loss of self-respect. An unemployed person also collects lower wages once they do re-enter the workforce relative to their peers who remained employed, 20% lower wages to be exact. Finally, long-term unemployment is correlated with an increased likelihood for depression, stroke, heart attack,and other stress-related conditions.

The basic takeaway from this is that unemployment is really painful. As a policy matter, we should be doing anything and everything we can to bring it down. But we have not done that during the Great Recession and it appears that we wont. The unemployment rate still remains at 8.3% and neither fiscal nor monetary policy efforts are being made to bring it down. In addition to this recent failure, we also have a system in place that intentionally generates 4-6% unemployment in order to fight inflation. Should we really allow that many people to suffer that much trauma? Given unemployment’s negative effects on health, skills, family well-being, relationships, and so on, shouldn’t real full employment be on the policy radar more than it is?

Things to ponder.