Jobs / Economy

More than 4 million people in the U.S. are long-term unemployed, a number that has more than tripled in the last five years. Because the probability of reemployment drops significantly the longer someone is out of work, this situation suggests the possibility that the U.S. economy will suffer a permanent increase in structural unemployment. Perhaps counter-intuitively, to avoid this becoming reality, Congress would do well to let the current extended unemployment benefits wind down and in the future refrain from leaping to fund nearly two years of benefits for unemployed workers.Economists and pundits alike have been discussing the plight of the long-term unemployed and proposing policies to assist this group. Notably absent from these discussions is an attempt to understand how we ended up in this dire situation. To avoid a deepening of the problem in the next business cycle, policymakers must explore the causes of the historic rise in long-term unemployment, and they would do well to...

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