Governor says Pennsylvanians can’t find jobs because they’re on drugs

Embattled Pennsylvania Gov. Tom Corbett (R) recently took to the airwaves to answer questions why Pennsylvania has continued to shed jobs under his Administration.  In an effort to explain Pennsylvania’s dismal job growth, Governor Corbett said that while businesses want to hire more workers, they can’t find qualified applicants because too many Pennsylvanians use illegal drugs.  “The other area is, there are many employers that say we’re looking for people but we can’t find anybody that has passed a drug test, a lot of them. And that’s a concern for me because we’re having a serious problem with that.”

So there you have it.  It’s not the economy, it’s not Corbett’s misguided economic policies, it’s not that employers are downsizing and squeezing more work out of fewer employees, it’s that unemployed Pennsylvanians seeking work are drug abusers who can’t pass a drug test.

That sounds a lot like a blame game, not facts or reality.  Nobel Prize winning economist Paul Krugman recently described facts and reality in The New York Times:

Let’s start with what may be the most crucial thing to understand: the economy is not like an individual family.

Families earn what they can, and spend as much as they think prudent; spending and earning opportunities are two different things. In the economy as a whole, however, income and spending are interdependent: my spending is your income, and your spending is my income. If both of us slash spending at the same time, both of our incomes will fall too.

And that’s what happened after the financial crisis of 2008. Many people suddenly cut spending, either because they chose to or because their creditors forced them to; meanwhile, not many people were able or willing to spend more. The result was a plunge in incomes that also caused a plunge in employment, creating the depression that persists to this day.

Why did spending plunge? Mainly because of a burst housing bubble and an overhang of private-sector debt — but if you ask me, people talk too much about what went wrong during the boom years and not enough about what we should be doing now. For no matter how lurid the excesses of the past, there’s no good reason that we should pay for them with year after year of mass unemployment.

So what could we do to reduce unemployment? The answer is, this is a time for above-normal government spending, to sustain the economy until the private sector is willing to spend again. The crucial point is that under current conditions, the government is not, repeat not, in competition with the private sector. Government spending doesn’t divert resources away from private uses; it puts unemployed resources to work. Government borrowing doesn’t crowd out private investment; it mobilizes funds that would otherwise go unused.

Now, just to be clear, this is not a case for more government spending and larger budget deficits under all circumstances — and the claim that people like me always want bigger deficits is just false. For the economy isn’t always like this — in fact, situations like the one we’re in are fairly rare. By all means let’s try to reduce deficits and bring down government indebtedness once normal conditions return and the economy is no longer depressed. But right now we’re still dealing with the aftermath of a once-in-three-generations financial crisis. This is no time for austerity.

O.K., I’ve just given you a story, but why should you believe it? There are, after all, people who insist that the real problem is on the economy’s supply side: that workers lack the skills they need, or that unemployment insurance has destroyed the incentive to work, or that the looming menace of universal health care is preventing hiring, or whatever. How do we know that they’re wrong?

Well, I could go on at length on this topic, but just look at the predictions the two sides in this debate have made. People like me predicted right from the start that large budget deficits would have little effect on interest rates, that large-scale “money printing” by the Fed (not a good description of actual Fed policy, but never mind) wouldn’t be inflationary, that austerity policies would lead to terrible economic downturns. The other side jeered, insisting that interest rates would skyrocket and that austerity would actually lead to economic expansion. Ask bond traders, or the suffering populations of Spain, Portugal and so on, how it actually turned out.

Is the story really that simple, and would it really be that easy to end the scourge of unemployment? Yes — but powerful people don’t want to believe it. Some of them have a visceral sense that suffering is good, that we must pay a price for past sins (even if the sinners then and the sufferers now are very different groups of people). Some of them see the crisis as an opportunity to dismantle the social safety net. And just about everyone in the policy elite takes cues from a wealthy minority that isn’t actually feeling much pain.

What has happened now, however, is that the drive for austerity has lost its intellectual fig leaf, and stands exposed as the expression of prejudice, opportunism and class interest it always was. And maybe, just maybe, that sudden exposure will give us a chance to start doing something about the depression we’re in.

When times are hard, older workers get hit the hardest

A recent report from the Government Accountability Office has found that once unemployed, it takes older job seekers significantly longer to find new work. Since the recession started, the median length of unemployment has more than tripled for older workers, increasing at a greater rate than that of younger workers. Prior to the recession, the median duration of unemployment for job seekers age 55 and over was 10 weeks compared with 9 weeks for job seekers aged 25-54. By 2011, the median duration of unemployment for older job seekers had increased to 35 weeks compared with 26 weeks for younger job seekers. In 2007, less than a quarter of unemployed older workers were unemployed for longer than 27 weeks. By 2011, this number had increased to 55 percent. Moreover, by 2011 over one-third of all unemployed older workers had been unemployed for over a year.

The GAO report cites several studies that explain why companies favor younger workers:  Younger workers typically earn less; employers expect younger workers will be healthier and have less of an impact on health care costs; employers expect older workers to “have an issue” working for a younger boss; employers believe older workers’ technical skills are out of date, and that they are likely to retire in the near term.

As they struggle with long-term unemployment, older Americans are doing what they can to get by. An AARP Public Policy Institute report released last month 69 percent of older Americans had slashed expenses; 57 percent of workers had tapped savings; 52 percent delayed medical or dental treatment; 37 percent stopped saving for retirement; 35 percent used credit cards to pay for daily living expenses; and 18 percent took distributions from their retirement accounts.