Unemployment takes a dip:
Applications for unemployment benefits in the U.S. fell more than forecast last week to the lowest level since July 2008, reinforcing evidence the labor market is healing.
Jobless claims declined by 34,000 to 407,000 in the week ended Nov. 20, Labor Department figures showed today in Washington. The median projection of economists surveyed by Bloomberg News called for a drop to 435,000. The total number of people receiving unemployment insurance decreased to the lowest in two years, and those on extended payments also fell.
Fewer firings lay the groundwork for a pickup in job creation that will generate incomes and spur consumer spending, which accounts for 70 percent of the economy (Exch: No, it does not). Even with companies firing fewer workers, unemployment will be slow to decline, according to the Federal Reserve’s latest forecast in which policy makers also lowered their growth projections.
If this holds, it is welcome news, and we should give thanks for it.
I have a few policy-oriented thoughts about unemployment that are a little off the conservative reservation, I suppose, one of them being that unemployment insurance is one of the least destructive and most useful of our social-welfare programs. (Do I think it should be privatized? Yes, I do.) Is 99 weeks too long for an unemployment benefit? I do not necessarily think so, though the fact that these benefits are publicly paid makes that a politically charged issue. We tend to insure against all the wrong things, buying health-care coverage to cover routine expenses like eyeglasses and check-ups, but leaving ourselves too much exposed to things like chronic illness, disability, and loss of income. A lot of our welfare state could and should be replaced by a smarter insurance market (and smarter insurance consumers).
But, as Thanksgiving is upon us, let me share a non-policy thought about unemployment: It is miserable. I’ve never been seriously sick, but I am confident in writing that my one extended bout of unemployment (broken up by some desultory underemployment) was hands-down the worst period of my life. It is not just the lost income, though the living-standards downgrade was no fun. The worst part was the sense of idleness and uselessness, the creep toward dependency, which I imagine must be multiplied tenfold for unemployed people with children to support. It stinks. No, it isn’t cancer or genocide in some godforsaken faraway land. But a man who wants work and cannot get it is in a hard place, and there are far too many of our countrymen in that situation right now. Economics is not really about numbers — as Mises put it, economics is about human action. And too much human action is being frustrated. The real price of bad economic policies is not lost GDP, it is squandered human potential.
I myself have always been really lucky when it comes to work, for which I am grateful — and nothing will make you grateful for your job like being out of one for a few months. So say a prayer for the out-of-work this Thanksgiving — and then fight like hell to unburden the American worker and the American investor so that we can well and truly unleash this nation’s massive human capital, which remains the most innovative and productive force on earth.
We traditionally engage in acts of charity during the holidays, but the best kind of charity is ensuring that a man doesn’t need it.
– Kevin D. Williamson is deputy managing editor of National Review and author of The Politically Incorrect Guide to Socialism, to be published in January.