Correct on the numbers, but the conclusions don't necessarily follow
> Most of the harm of unemployment is psychological, not material. Holding income constant, the employed are much happier than the unemployed. Hence, no sensible person would want to see U.S. workers’ wages rise by 10% if the unemployment rate rose 3.5 percentage-points as a result. And psychology aside, remember that the welfare state forces active workers to support the idle. So when regulation forces wages up, even the lucky workers who keep their jobs ultimately forfeit much of what they gain.
If the goal is to improve happiness through applied economics then you should measure happiness, not make ad hoc justifications based on some other metric
Yeah. It's also somewhat incomplete analysis about happiness because it views it as steady state. I mean, anedcotally, sure, being employed is good and being unemployed (even with a good safety net) is bad. But being laid off is much worse than either because of the disruption it causes.
Consider, would you rather spend a career with a single 1-year blemish where you had to live on the dole because you couldn't find work after changing career paths or whatever, or one where you were laid off four times for three months at a time? Those don't seem as symmetric to me as they do to the author.
That said, I think the points raised are valid. It does seem like in 2009 the market of academic economists was too bearish on the long term US unemployment situation.
It is very well established that psychological stability, in youth and adults, comes at least partially from there being a need for psychological stability. Structure and "somewhere to be" really, really help.
Therefore I have little doubt that if you looked it up, you would indeed find that it's true that employment leads to increased happiness.
In early 2001 when I was laid off from a startup for the first time, the CTO told me "Don't worry, it is __always__ for the best," which I took to be an empty platitude at the time.
18 years, 4 layoffs (and 1 walkoff) later, I can reflect back and say that he was only being emphatically honest. Each departure led to generous advancement, the sort that does not seem to come, these days, from loyalty to one's company or present role.
And yet 'happiness' is an elusively squishy metric, compounded by the fact that humanity is incredibly good at seeking out reasons to be discontent. Ambition, envy, and anxiety at all levels of poverty and wealth alike are fuel to that fire.
True, but I think it's pretty universal that having to piss in a bottle to make a billionaire slightly richer does generally not contribute towards one's personal happiness.
> Most of the harm of unemployment is psychological, not material. Holding income constant, the employed are much happier than the unemployed. Hence, no sensible person would want to see U.S. workers’ wages rise by 10% if the unemployment rate rose 3.5 percentage-points as a result. And psychology aside, remember that the welfare state forces active workers to support the idle. So when regulation forces wages up, even the lucky workers who keep their jobs ultimately forfeit much of what they gain.
If the goal is to improve happiness through applied economics then you should measure happiness, not make ad hoc justifications based on some other metric