Six months into a pandemic that is keeping many businesses closed across the United States, and with close to 1 million new unemployment claims continuing to be added each week, there should be widespread agreement that unemployed workers are blameless for their condition. Yet stereotypes that find fault with jobless workers are already appearing amid the coronavirus recession and are an obstacle to economic recovery that threatens to leave lasting scars on unemployed individuals.

The stigma of unemployment is an unfounded bias that views the unemployed as lazy, less-productive workers who are personally defective, worthy of contempt, and to blame for being unemployed. Prejudice against the unemployed hampers the effective delivery of benefits to millions of workers out of a job, leads to hiring discrimination against the unemployed, and can cause long-term damage to workers and the economy.

This issue brief examines the importance of preventing unemployment and mitigating the downside impacts of unemployment. I will first examine current U.S. unemployment trends and then document how unemployed workers are discriminated against in the job market due to the stigma of being unemployed. This issue brief then details how this discrimination scars unemployed workers for the rest of their careers while sapping U.S. economic growth.

I close with some policy recommendations to address the stigma of unemployment, among them:

  • Reforms to the Unemployment Insurance system
  • Automatic stabilizers for unemployment benefits that match the distribution of benefits to the state of the economy
  • Work-share employment policies
  • Direct government jobs programs

In these ways, the stigma of unemployment is overcome by policies that help unemployed workers exit their joblessness as quickly and efficiently as possible to help them and the broader U.S. economy.

Read the full article about unemployment during COVID-19 by Peter Norlander at Equitable Growth.