Beware the Signs of Long-Term Unemployment
United Daily News editorial (Taipei, Taiwan, ROC)
A Translation
November 25, 2009
The unemployment rate has fallen for two months in a row. In October it dropped below 6%. Government heads at all levels breathed a huge sigh of relief. But officials must not get too excited. Because the overall unemployment figures conceal a deteriorating long-term unemployment picture. Various short term government employment measures must be modified as soon as possible to avoid a rapid increase in long-term unemployment. This constitutes a major challenge to continued economic development.
According to the latest government figures, 653,000 people were unemployed in October. That is 20,000 less than were unemployed at the peak. Whatever the reasons for the fall in unemployment, this is good news indeed. Unfortunately the average duration of unemployment has not fallen accordingly. On the contrary, it increased last month to 28.3 weeks, the highest since 2004. This far exceeds the 27 weeks that most economists consider "long-term unemployment." The number of unemployed has decreased, but those unemployed are taking even longer to find work.
Another figure is even more interesting. Long term unemployment, i.e., being unemployed for over six months, already accounts for 40% of total unemployment. This is even higher than in the US, which faces double-digit unemployment. In the US, 15 million people are currently unemployed. About one-third of them are long-term unemployed, the highest since World War II. For the past five months, over 10,000 have been unemployed for over one year. Long-term unemployment on Taiwan is already taking shape, and may well increase.
Let us examine the October data for these long-term unemployed. In terms of age, they are mainly 30 to 34 years old, and in the prime of their life. Over half of this group has been unemployed for over six months. Young people in the prime of their life are normally the backbone of the job market. Long-term unemployment is a major human resources warning sign. In terms of educational level, long term unemployment among vocational school graduates and specialists is much higher than average. This means technical and vocational skills are no longer a guarantee of employment. In terms of cause of unemployment, the main reason is downsizing in the workplace, or the company going out of business. This means that the economic recovery is M-shaped. The fittest may have survived the financial tsunami. But those with their heads below water have perished. These employees are unable to return to the workplace.
Long-term unemployment has different causes than the weak global economy, plant closures caused by cyclical tightening, and frictional unemployment. It reflects a growing gap between labor supply and market demand. This is the structural unemployment that scholars and experts have urged the government to address. This type of unemployment does not improve during an economic recovery, but deteriorates during an economic recession. The current Great Depression has made long-term unemployment manifest. The previous century sowed the seeds for today's long-term unemployment. But the government always responds short-term. This leads time and again to economic cycles, and our current plight.
Failure to solve the problem of long-term unemployment will result in a long chain of consequences. First, the unemployment cycle will lengthen. The job skills of the long-term unemployed may degenerate. They may become demoralized, and become permanently unemployed. The work experience they accumulated will evaporate. In some fields it may create a human resources faultline. Increased long-term unemployment will increase the cost of unemployment benefits. The unemployed may turn to other forms of social relief. The result will be a heavier burden on the nation's finances, or reduced benefits for other needy parties. Neither is desirable. Long-term unemployment may weaken peoples' willingness to work and their motivation to learn. Over time, Taiwan's highly-trained manpower, which gave it a global economic advantage, may also evaporate.
Therefore, the government must not underestimate the problem of long-term unemployment. It must not naively assume that once the economy recovers, all will be well. It may moderate. But if no long-term countermeasures are initiated, it will not be eradicated. Look at the government's measures for combatting unemployment. Consider its "immediate work start plan" which provides subsidies to employers. Consider its "short-term employment plan," which provides public sector jobs. They do indeed have a short-term impact. But should limited resources be expended on such efforts? The government must do its homework before deciding, and not just focus on short-term decreases in unemployment. The government expects to spend over 30 billion yuan over the next four years on a combination of short-term and long-term "employment promotion" measures. It hopes to lower the unemployment rate to 3 percent in 2012. This hodgepodge of programs includes university-industry cooperation, vocational training, enhancing the success rate for employment "matchmaking," wage subsidies, and assistance to new businesses. The results may well turn out to be "Everything is included, but nothing works," and may well do nothing to solve the problem of structural unemployment. President Ma's promise to reduce the unemployment rate to three per cent, is sheer fantasy.
就業路迢迢：注意失業期延長的警訊
【聯合報╱社論】
2009.11.25 03:22 am
失業率連續兩個月下降，十月更降到百分之六以下，著實令政府各級首長大大鬆一口氣。然而，政府官員小小高興一下就好，因為在總體失業統計之下，隱而未現的長期失業問題正在惡化，政府各項救急救短的促進就業政策必須儘速調整重心，以免快速集結的長期失業大軍，形成經濟發展的大難題。
根據主計處最新資料，十月有六十五萬三千人失業，已較最高峰時期少了近二萬人，不管失業減少的原因如何，這確是喜訊一樁。不過，平均失業周數並未同步縮短，上月反而拉長為廿八點三周，是民國九十三年以來最長，遠超過一般經濟學家定義「長期失業」所用的廿七周，代表失業人數雖下降，但待業找工作的期間更長了。
另一數據更值得注意，目前失業期間超過半年的長期失業者，已占總失業人口的四成，比正面臨二位數失業率危機的美國還高（美國有一千五百萬人失業，約三分之一屬長期失業者，是二次大戰以來最高），而失業逾一年者更已連續五個月突破十萬人，台灣的長期失業大軍已然成形，甚至可能繼續擴大。
用十月的資料描述這群長期失業大軍，依年齡看，主要集中在卅到卅四歲的青壯族群，這一年齡層的失業者近半數已失業逾半年，青壯人口原是就業市場的主力，卻深陷長期失業困境，實是人力資源一大警訊；依教育程度，高職及專科的長期失業者比率也遠高於平均水準，顯示以「一技之長」為號召的技職教育，似乎不再是就業的保證；依失業原因，還是以工作場所業務緊縮或歇業為最多，這代表景氣復甦也出現Ｍ型化，體質強健者挺過金融海嘯後更強，但滅頂者再無重生之機，員工也無法重返職場。
長期失業的成因，與景氣衰退、工廠歇業緊縮導致的循環性、摩擦性失業不同，反映的是人力供給與職場需求之間的落差擴大，也就是學者專家不斷提醒政府要下苦功因應的結構性失業；此型失業的特色是無法隨著景氣復甦而快速好轉，卻會因為經濟衰退而惡化，一如這波大衰退，就讓長期失業現象顯露無遺。只是，現今的長期失業問題早在上一世紀末就已種下結構性失業的惡因，但因政府總是著眼於短期對策，以致經過一次又一次的經濟循環，終致今天的局面。
長期失業的問題不解，將會帶來環環相扣的後遺症。首先，失業周期拉長，長期失業者的技能可能退化、意志消沉，並可能墮入永久性失業，其原累積的工作經驗也跟著退場，而在某些領域形成人力斷層；另方面，長期失業的惡化，不只將增加既有失業給付支出，淡出職場者還可能轉而尋求其他社會救濟，其結果不是財政負擔惡化，就是排擠到其他弱勢族群的資源，而兩者都非吾人所願；再者，長期失業現象的持續，還可能降低勞動意願、學習動機，久而久之，台灣向以優質人力資源傲稱於世的經濟優勢，也可能跟著流失了。
因此，政府不能小看長期失業的問題，更別天真地以為景氣回春，一切就能迎刃而解；或許，它可能會稍稍緩和，但若沒有長期抗戰的對策，就不可能根除。檢視政府現有各項搶救失業對策，例如補助雇主僱用的「立即上工」計畫、釋出公部門職缺的「短期就業措施」等，確實發揮了短期救急的效果，但是否還要再將有限的資源續用於此，政府應做好研究再決定，而非僅著眼於短期失業率的下降；至於結合短中長期措施的「促進就業方案」，政府預計四年動用三百多億元，讓失業率在民國一○一年降到百分之三，但這個大雜燴的方案，從產學合作、強化職業訓練、提升就業媒合成功率、提供工資補貼、協助創業等無所不包，但成果也可能是「樣樣有，樣樣鬆」，還是沒有解決結構性失業問題；失業率要降到馬總統承諾的百分之三，更是天方夜譚。
United Daily News editorial (Taipei, Taiwan, ROC)
A Translation
November 25, 2009
Summary: The unemployment rate has fallen for two months in a row. In October it dropped below 6%. Government heads at all levels breathed a huge sigh of relief. But officials must not get too excited. Because the overall unemployment figures conceal a deteriorating long-term unemployment picture. Various short term government employment measures must be modified as soon as possible to avoid a rapid increase in long-term unemployment. This constitutes a major challenge to continued economic development.
Full Text below:
The unemployment rate has fallen for two months in a row. In October it dropped below 6%. Government heads at all levels breathed a huge sigh of relief. But officials must not get too excited. Because the overall unemployment figures conceal a deteriorating long-term unemployment picture. Various short term government employment measures must be modified as soon as possible to avoid a rapid increase in long-term unemployment. This constitutes a major challenge to continued economic development.
According to the latest government figures, 653,000 people were unemployed in October. That is 20,000 less than were unemployed at the peak. Whatever the reasons for the fall in unemployment, this is good news indeed. Unfortunately the average duration of unemployment has not fallen accordingly. On the contrary, it increased last month to 28.3 weeks, the highest since 2004. This far exceeds the 27 weeks that most economists consider "long-term unemployment." The number of unemployed has decreased, but those unemployed are taking even longer to find work.
Another figure is even more interesting. Long term unemployment, i.e., being unemployed for over six months, already accounts for 40% of total unemployment. This is even higher than in the US, which faces double-digit unemployment. In the US, 15 million people are currently unemployed. About one-third of them are long-term unemployed, the highest since World War II. For the past five months, over 10,000 have been unemployed for over one year. Long-term unemployment on Taiwan is already taking shape, and may well increase.
Let us examine the October data for these long-term unemployed. In terms of age, they are mainly 30 to 34 years old, and in the prime of their life. Over half of this group has been unemployed for over six months. Young people in the prime of their life are normally the backbone of the job market. Long-term unemployment is a major human resources warning sign. In terms of educational level, long term unemployment among vocational school graduates and specialists is much higher than average. This means technical and vocational skills are no longer a guarantee of employment. In terms of cause of unemployment, the main reason is downsizing in the workplace, or the company going out of business. This means that the economic recovery is M-shaped. The fittest may have survived the financial tsunami. But those with their heads below water have perished. These employees are unable to return to the workplace.
Long-term unemployment has different causes than the weak global economy, plant closures caused by cyclical tightening, and frictional unemployment. It reflects a growing gap between labor supply and market demand. This is the structural unemployment that scholars and experts have urged the government to address. This type of unemployment does not improve during an economic recovery, but deteriorates during an economic recession. The current Great Depression has made long-term unemployment manifest. The previous century sowed the seeds for today's long-term unemployment. But the government always responds short-term. This leads time and again to economic cycles, and our current plight.
Failure to solve the problem of long-term unemployment will result in a long chain of consequences. First, the unemployment cycle will lengthen. The job skills of the long-term unemployed may degenerate. They may become demoralized, and become permanently unemployed. The work experience they accumulated will evaporate. In some fields it may create a human resources faultline. Increased long-term unemployment will increase the cost of unemployment benefits. The unemployed may turn to other forms of social relief. The result will be a heavier burden on the nation's finances, or reduced benefits for other needy parties. Neither is desirable. Long-term unemployment may weaken peoples' willingness to work and their motivation to learn. Over time, Taiwan's highly-trained manpower, which gave it a global economic advantage, may also evaporate.
Therefore, the government must not underestimate the problem of long-term unemployment. It must not naively assume that once the economy recovers, all will be well. It may moderate. But if no long-term countermeasures are initiated, it will not be eradicated. Look at the government's measures for combatting unemployment. Consider its "immediate work start plan" which provides subsidies to employers. Consider its "short-term employment plan," which provides public sector jobs. They do indeed have a short-term impact. But should limited resources be expended on such efforts? The government must do its homework before deciding, and not just focus on short-term decreases in unemployment. The government expects to spend over 30 billion yuan over the next four years on a combination of short-term and long-term "employment promotion" measures. It hopes to lower the unemployment rate to 3 percent in 2012. This hodgepodge of programs includes university-industry cooperation, vocational training, enhancing the success rate for employment "matchmaking," wage subsidies, and assistance to new businesses. The results may well turn out to be "Everything is included, but nothing works," and may well do nothing to solve the problem of structural unemployment. President Ma's promise to reduce the unemployment rate to three per cent, is sheer fantasy.
就業路迢迢：注意失業期延長的警訊
【聯合報╱社論】
2009.11.25 03:22 am
失業率連續兩個月下降，十月更降到百分之六以下，著實令政府各級首長大大鬆一口氣。然而，政府官員小小高興一下就好，因為在總體失業統計之下，隱而未現的長期失業問題正在惡化，政府各項救急救短的促進就業政策必須儘速調整重心，以免快速集結的長期失業大軍，形成經濟發展的大難題。
根據主計處最新資料，十月有六十五萬三千人失業，已較最高峰時期少了近二萬人，不管失業減少的原因如何，這確是喜訊一樁。不過，平均失業周數並未同步縮短，上月反而拉長為廿八點三周，是民國九十三年以來最長，遠超過一般經濟學家定義「長期失業」所用的廿七周，代表失業人數雖下降，但待業找工作的期間更長了。
另一數據更值得注意，目前失業期間超過半年的長期失業者，已占總失業人口的四成，比正面臨二位數失業率危機的美國還高（美國有一千五百萬人失業，約三分之一屬長期失業者，是二次大戰以來最高），而失業逾一年者更已連續五個月突破十萬人，台灣的長期失業大軍已然成形，甚至可能繼續擴大。
用十月的資料描述這群長期失業大軍，依年齡看，主要集中在卅到卅四歲的青壯族群，這一年齡層的失業者近半數已失業逾半年，青壯人口原是就業市場的主力，卻深陷長期失業困境，實是人力資源一大警訊；依教育程度，高職及專科的長期失業者比率也遠高於平均水準，顯示以「一技之長」為號召的技職教育，似乎不再是就業的保證；依失業原因，還是以工作場所業務緊縮或歇業為最多，這代表景氣復甦也出現Ｍ型化，體質強健者挺過金融海嘯後更強，但滅頂者再無重生之機，員工也無法重返職場。
長期失業的成因，與景氣衰退、工廠歇業緊縮導致的循環性、摩擦性失業不同，反映的是人力供給與職場需求之間的落差擴大，也就是學者專家不斷提醒政府要下苦功因應的結構性失業；此型失業的特色是無法隨著景氣復甦而快速好轉，卻會因為經濟衰退而惡化，一如這波大衰退，就讓長期失業現象顯露無遺。只是，現今的長期失業問題早在上一世紀末就已種下結構性失業的惡因，但因政府總是著眼於短期對策，以致經過一次又一次的經濟循環，終致今天的局面。
長期失業的問題不解，將會帶來環環相扣的後遺症。首先，失業周期拉長，長期失業者的技能可能退化、意志消沉，並可能墮入永久性失業，其原累積的工作經驗也跟著退場，而在某些領域形成人力斷層；另方面，長期失業的惡化，不只將增加既有失業給付支出，淡出職場者還可能轉而尋求其他社會救濟，其結果不是財政負擔惡化，就是排擠到其他弱勢族群的資源，而兩者都非吾人所願；再者，長期失業現象的持續，還可能降低勞動意願、學習動機，久而久之，台灣向以優質人力資源傲稱於世的經濟優勢，也可能跟著流失了。
因此，政府不能小看長期失業的問題，更別天真地以為景氣回春，一切就能迎刃而解；或許，它可能會稍稍緩和，但若沒有長期抗戰的對策，就不可能根除。檢視政府現有各項搶救失業對策，例如補助雇主僱用的「立即上工」計畫、釋出公部門職缺的「短期就業措施」等，確實發揮了短期救急的效果，但是否還要再將有限的資源續用於此，政府應做好研究再決定，而非僅著眼於短期失業率的下降；至於結合短中長期措施的「促進就業方案」，政府預計四年動用三百多億元，讓失業率在民國一○一年降到百分之三，但這個大雜燴的方案，從產學合作、強化職業訓練、提升就業媒合成功率、提供工資補貼、協助創業等無所不包，但成果也可能是「樣樣有，樣樣鬆」，還是沒有解決結構性失業問題；失業率要降到馬總統承諾的百分之三，更是天方夜譚。
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