Unemployment in the United States: The Problem and a Proposal

The problem of unemployment among industrialized nations has important implications for the efficiency with which these economies are performing, and hence for economic growth and the well-being of citizens. It also contains the seeds of social instability. A recent volume addressing this issue described the problem and its implications as follows: While unemployment will ebb somewhat as countries recover from the recent global recession, millions are likely to remain jobless for a variety of structural reasons. Moreover, there is a disturbing trend in many industrialized countries toward long-term unemployment, especially among low-skilled workers. This trend has had less effect on measured unemployment in the United States than in Europe in part because U.S. workers have greater incentives to accept low-wage jobs. Nonetheless, virtually all industrial countries face a jobs problem that impairs living standards and threatens a breakdown in social cohesion.1