Megan McArdle makes this point in the context of the minimum wage, but it is one that I have tried to make a couple of times in the context of Obama’s many and varied employment-suppressing policies generally:
The thing about unemployment is that it’s much, much worse than having a crap low-wage job. It’s worse than almost anything. It’s one of those life events that people never really recover from. Two years after a divorce or being widowed, people have adjusted, and are mostly about as happy as they were before the terrible event. But after two years of unemployment, people are still miserable. And even after they get another job, a prolonged spell of unemployment often has permanent effects on future earning power, and risk for things like depression. We should weight the losses of the people who are out of work much higher than the gains to the people who get an income boost.