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May 17, 2011

Why Aren't We Talking More about Unemployment?

Neil Bhatiya

The National Journal has an excellent new study on how the major print media covers economic news. Over a two-year period (April 2009 to May 2011), according to staff reporter Clifford Marks, instances of headlines and ledes mentioning “unemployment” declined drastically in the five newspapers which were surveyed, while uses of “deficit” rose, peaking at 261 at the end of December 2010, when the President’s National Commission on Fiscal Responsibility and Reform released its report. As Marks makes clear, these numbers reflect the success of conservative messaging in “changing the narrative of economic policy from one dominated by talk of fiscal stimulus to one now in lockstep with notions of fiscal austerity.” The strength of that narrative is expected to rise as the United States met its statutory debt limit on Monday.

This messaging persists despite polling that suggests the public’s attention hasn’t followed that of newspaper reporters or political pundits.  Gallup’s most recent poll (Americans’ Economic Concerns Reach Two-Year High) demonstrates that people rate the economy in general and unemployment/jobs above the federal budget deficit/federal debt and that, even among self-identified Republicans, only 17% rank the federal budget deficit as the “most important problem” facing the nation (the economy ranks first at 38%, followed by unemployment at 24%). Polling analysis by Century Foundation Senior Fellow Ruy Teixeira found similar public dissatisfaction with prioritizing deficit reduction over the economic security of ordinary Americans.

Although Guy Molyneux has polling which suggests that, since people believe cutting the deficit would improve the economy, the deficit vs. economic growth argument is not a binary. Other polling research by Public Agenda, however, demonstrates that much of the public believes government spending, especially on higher education, job training, and social safety net programs like Social Security and Medicare, are very effective at ensuring a proper standard of living for most Americans, even though these programs are the ones most often targeted by deficit reduction plans. Public Agenda’s analysis makes the argument that these contradictory numbers might be based on how respondents view their own economic situation: those who say they are not struggling economically are more likely to say reducing the federal deficit would be very effective at helping those who are struggling. The bottom line remains that, while addressing long-term solvency is essential, doing so at the expense of ameliorating current economic conditions would seem unwise. Why, then, does the laser-like focus on deficit reduction persist?

One factor explaining the endurance of deficit reduction is the cautionary tales of sovereign debt crises in Europe, especially in Greece. Conservatives often point to the Greek bailout as a scenario for America’s future if the deficit is not addressed immediately, as Paul Ryan did in his response to the State of the Union: “Just take a look at what's happening to Greece, Ireland, the United Kingdom and other nations in Europe. They didn't act soon enough; and now their governments have been forced to impose painful austerity measures: large benefit cuts to seniors and huge tax increases on everybody.” This theme endures despite evidence that U.S. net government debt as a percentage of GDP is only above average for countries in the Organization for Economic Cooperation and Development (OECD), and well below that of debt-crisis nations such as Italy, Japan, and Greece. Additionally, as this analysis from the Center for Economic and Policy Research explains, the U.S. has a much more diversified economy, even with a recession, and is thus in a better position to address debt problems when the economy is in recovery.

The overshadowing of unemployment cannot entirely be attributed to aggressive conservative messaging against stimulus and entitlement spending. Another explanation is President Obama’s seeming reluctance to put unemployment and inequality in stark human terms. At one level, this is unsurprising, as an incumbent President would be unwilling to highlight the toll of a jobless recovery going into an election year. Thus, when he gave a speech earlier this month to the headquarters of the Allison Transmission Headquarters in Indianapolis, Indiana, he celebrated the fact that Allison is expanding its work on hybrid technology, and that it is projected the plant will add 200 jobs in the next two years. What Obama did not mention is that unemployment in Marion County persists at around 9% (it was 4.7% in 2007), or that the percentage of families living in poverty in the state of Indiana averaged 15% from 2008-2009 (up from 11% for 2006-2007). It is because so much focus has been directed toward deficit reduction that these statistics are not discussed more often. However, it is in these areas that the human cost of budget cuts, done for the sake of immediate deficit reduction, will hit the hardest.


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The real story of unemployment and how it is likely to worsen in the future is not being told by the press or recognized by economists.

Computers and robots are getting better and better. More jobs are being done by software. There was a recent piece in the NYT about teams of lawyers being replaced by software.

This is going to ACCELERATE in the future. A company called Heartland Robotics is working on a $5000 robot; that means an employer can buy a robot for the price of a couple of months wages. What happens when robots like that start taking even burger flipping jobs. It might not happen in the next few years, but SOMEDAY it is GOING to happen. Then what?

For a great overview of this, see this book:

"The Lights in the Tunnel: Automation, Accelerating Technology and the Economy of the Future"


A free PDF is also available here: http://www.thelightsinthetunnel.com

Also see the author's blog at http://econfuture.wordpress.com.

I think the issues raised in this book are among the most important that we will have to confront as a society. I encourage everyone to read it...

Debbie Strater

They are saying unemployment has dropped!!!!!!!!!!! I'm sure, because their unemployment benefits are starting to run out!!!!! Doesn't mean they are employed!!!!!!

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