Enormous productive potential being wasted as unemployment creeps higher

The Bureau of Labor Statistics released their June employment report today, and almost all of the findings recorded in the report were awful. Unemployment is up to 9.2 percent, more than 0.4 percent higher than it was two months ago. This puts the total number of unemployed people — a term which only includes those who are actually looking for jobs — at 14.1 million. An additional 8.6 million people are underemployed, working part-time because no full-time work can be found.

The reaction to the report — at least in the mainstream outlets — has been predictably narrow. Article after article has been published speculating on the impact it will have for a presidential election which takes place 17 months from now. This speculation, in addition to being totally without merit as Nate Silver explains over at Five Thirty Eight, demonstrates the completely misguided way that political commentators typically handle these kinds of reports. Either out of laziness or a lack of creativity, the slant taken on news of this sort almost always involves discussing its relevance to some forthcoming election, even ones so far out as to make the commentary border on the absurd.

More substantive analysis would ask the questions that really matter. What does long-term unemployment actually mean for those who are made to endure it? What impact does it have on a family when one or both of the parents cannot find a job? In short, how much suffering does this massive amount of unemployment and underemployment impart on the people in the country?

About the only reprieve from the endless horse race analysis — analysis that crops up even when a horse race is not present — is Ezra Klein’s blog over at the Washington Post. Filling in for him today, Dylan Matthews highlights the significance of unemployment, pointing to two studies which show the permanent negative effects of unemployment on a person’s long-term income and health. It suffices to say that unemployment’s actual significance lies not in its effects on polling, but in the ways it wreaks havoc on the country.

In addition to the long-term health and income losses it imposes on individuals, large-scale unemployment and underemployment results in an enormous waste of productive potential. Imagine what 14.1 million people working every day could produce, and what 8.6 million people working full-time instead of part-time could produce. With that labor, we could be building high-speed rail lines, wind turbines, and repairing existing infrastructure. That of course is just to name a few possibilities. However, instead of utilizing this massive labor force, the present economy is preventing it from being tapped at all, at least in the private sector.

With unemployment increasing, the highest levels of income and wealth inequality on record, and decades of total wage stagnation for the bottom 90 percent, it becomes harder and harder to take seriously efforts to preserve American-style capitalism. When large swaths of the population are forced to remain idle because the private sector cannot conceive of ways to make them profitable, we need some other way to put them to work. Perhaps a public jobs program like the Works Project Administration — an approach Paul Krugman has endorsed — is something that should be seriously considered.

Whether it is a new WPA or something else, inaction on the issue of unemployment should be totally out of the question. But instead of working overtime to address the unemployment problem, the political apparatus of this country has been hooked into a months long bit of political theatre centering around the debt ceiling. Once that theatre concludes in early August, even worse theatre will start to kick into high gear surrounding the upcoming presidential election.

These misplaced political priorities are fairly normal for the circus that is the federal government, and in some cases the theatre they generate is harmless and amusing. The lack of action on unemployment is not such a case. In a more level-headed political atmosphere, Obama and the national Republicans would be completely embarrassed about the productive potential high unemployment is leaving untapped. But in this political climate, almost no one seems to care.

Medicaid study provides support for the program

It almost goes without saying these days that America’s approach to providing health care is totally dysfunctional. The United States spends more money than any other country in the world while simultaneously insuring fewer people than every other industrialized nation. Meanwhile, it delivers poor outcomes, and the World Health Organization famously ranked it 37th in the world, this despite America’s enormous expenditures in the area.

Almost any analysis of the ways more successful countries go about meeting their health care needs points in the direction of implementing a single-payer system. Despite this, the United States is so far away from implementing such a reform that it is almost not worth talking about. In its place, advocates of universal healthcare are forced to defend piecemeal, sub-optimal, underfunded entitlements like Medicare and Medicaid as the only programs we have that even try to provide health insurance to vulnerable populations.

For those people, good news was delivered today in the form of a groundbreaking study on the impact of Medicaid from the National Bureau of Economic Research.

According to its authors, the study is uniquely positioned to analyze the effects of Medicaid because of a strange set of circumstances that recently played out in Oregon. The state government there decided that it was able to expand Medicaid coverage to non-disabled adults below the poverty line, but only up to 10,000 additional enrollees. A lottery was used to determine which 10,000 impoverished adults were lucky enough to warrant basic health coverage. As embarrassing as it is that we are having healthcare lotteries, the process generated the circumstances for a rigorously controlled experiment on the efficacy of the Medicaid program.

The study revealed very significant differences between those who won a spot on the Medicaid rolls and those who remained uninsured. Among the long list of findings in the study, the Center for Budget and Policy Priorities highlighted that those who received Medicaid were:

  • More likely to receive doctor-recommended preventive care (for example, women were 60 percent more likely to have a mammogram);
  • 70 percent more likely to have a regular office or clinic where they could receive primary care;
  • 40 percent less likely to have to borrow money or leave other bills unpaid in order to cover medical expenses; and
  • 40 percent less likely to experience a decline in their health over the last six months.

The coverage in the New York Times, National Public Radio, The Atlantic, and Slate offers more statistical tidbits from the study not quoted above. The findings in a nutshell are that those on Medicaid utilize more medical services, are in a better financial position, and report feeling healthier than those who were left uninsured. The other significant finding was a lack of evidence for the speculative claim that providing insurance actually saves money by catching diseases early in their development. However, because the study is only in its first year of data collection, it is not clear how suited it is to weigh in on a claim like that which is necessarily more focused on the long-term.

In many ways, the findings seem fairly obvious. Of course individuals with Medicaid insurance — as poorly funded and inadequate as it is — are better off than those with no insurance at all. Despite the seeming obviousness of it, opponents of Medicaid have often been bold enough to claim the opposite. For examples of such over-the-top claims, one needs to look no further than the Wall Street Journal’s Scott Gottlieb whose article titled “Medicaid Is Worse Than No Coverage at All” says about all you need to know about his credibility.

Even The Atlantic’s Megan McArdle had to do some backtracking today on her previous comments about the “Myth Diagnosis” that a lack of health insurance killed people. In a column today, she tries to save as much face as she can in light of this new study, by drawing a line between utilization of health care services and not dying. Just because those on Medicaid utilize more health services, McArdle argues, that does not necessarily mean that lives were saved.

Of course, even just a single statistic from the study is enough to reveal the vacuous nature of this incredulous effort to defend the indefensible. Trying to deny that a 60 percent increase in mammograms wont save lives that would otherwise be lost to breast cancer is about as absurd an argument I have ever seen.

So for those who take an interest in defending the non-ideal efforts of Medicaid to provide some care to the disabled and poor, today has been a positive day. When the purveyors of specious arguments that have tried to undermine the call for universal health insurance are as frantically grasping at straws as McArdle was today, it can only mean good things.

Good labor news for once: Connecticut mandates paid sick days

Connecticut Governor Dannel Malloy announced Tuesday that he had signed into law a bill which requires employers to provide paid sick days to their workers. The bill is the first of its kind in the country. Under the new rules, firms with 50 or more employees are required to provide their workers one hour of paid sick time for every 40 hours worked, up to 40 paid sick hours a year.

Along with Vermont’s single payer healthcare bill, this bill is one of the few bright spots in what has otherwise been a brutal year for poor and working people. Providing paid sick days to all workers has so many far reaching benefits that at least 21 nations already legally require it.

In addition to being fundamentally humane and moral, paid sick days decrease the spread of contagious illnesses. Workers who cannot afford to take time off when they are sick end up going into work despite being ill, potentially infecting those whom they interact with at their jobs. As the Economic Policy Institute points out, highly paid workers are typically already provided paid sick days, and so this bill will have more significant impacts for low-income employees. Ellen Bravo of Family Values @ Work makes the point that it is precisely these kinds of low-income workers — restaurant workers, service workers, and child-care providers — who interact with the public the most, making paid sick days a universal benefit for all of us who can now avoid catching whatever they might have.

As with all worker-friendly improvements — even those as seemingly uncontroversial as this one — business groups claim it will spell doom and gloom for the economy. According to Bridgeport News, the Connecticut Business and Industry Association lobbied against the bill, saying that it would “further hurt the economy and drive away business.” Joe Brennan, a lobbyist for the group, is quoted in the Associated Press story forecasting a coming dystopian world of mandated vacation time and work breaks.

Indeed, what a horror that would be. If Brennan is right, Connecticut’s support for paid sick days may have put it on the precipice of a slippery slope to the humane working conditions already standard across Western Europe.

In addition to Brennan’s unintentionally self-parodying comments, the familiar, less humorous set of business objections were also raised. As mentioned above, the threat of businesses fleeing from the state to escape the burden of providing minimally humane working conditions has been floated out. The bogeyman of higher prices to accommodate the paid sick days was highlighted in the MarketWatch article about the change. The article also featured Heritage Foundation talking points saying that ultimately workers would be forced to pay for the sick days in lost future raises — you know, those raises that fast food workers are always getting.

These lines of rhetoric of course are predictable. The race to the bottom logic so pervades our present political discourse that anyone paying close attention could probably tell you what the business opposition to any given set of worker-friendly initiatives is. But this is nothing new. The history of labor in the United States has been saturated with industry objections to positive worker treatment from the very beginning. As Philip Dray records in his book There is Power in a Union, identical objections about economic destruction were made against the now-celebrated movements to shorten the workday, improve workplace safety, and provide minimal wages.

Initiatives tagged as business-destroying and burdensome share a history with all the great workplace improvements of the last two centuries. Connecticut’s mandatory sick pay initiative is the newest member of that club, and hopefully many more like it — perhaps with identical bills in other states — will soon follow.