Persistent Scars of Long-Term Joblessness


September 6, 2013, 10:25 am

Hugely elevated levels of long-term unemployment remain one of the worst and most persistent scars from the Great Recession, as underscored yet again in the mediocre August jobs report. All in all, about 4.3 million Americans have been out of work for six months or more.

For those workers, the chance of getting a job gets slimmer and slimmer as time goes on, skills degrade and employers’ biases harden. Even if those workers do become re-employed, it is often for lower wages or worse work.

Granted, the number of Americans that count themselves among the long-term jobless has declined sharply over the last three years, dropping by about 2.4 million from a peak of 6.7 million in 2010. But the number remains significantly elevated, and hundreds of thousands out of work for long spells have simply given up and dropped out of the labor force.

The slowly improving economy is not really improving for the long-term unemployed: Short-term joblessness has actually declined a smidge since 2007. Long-term joblessness is up 244 percent.

Now, economists are debating how strong the recovery really is, given that the job reports have weakened through the year. “This report says that we’re barely creating enough jobs to keep the unemployment rate falling from its current high levels,” said Justin Wolfers of the Brookings Institution. “Policy makers have been looking for a signal that the recovery has become self-sustaining.  This report doesn’t provide it.”

Stuart Hoffman, chief economist at PNC, noted that payroll jobs have grown at a monthly pace of 186,000 in 2013. He called it a “solid number, with no signs of the labor market slowdowns that emerged in the spring and summer in each of the three previous years.”

But the further you dig into the numbers, the worse they look. “The jobs count may be up, but for recent college graduates and middle-aged adults seeking positions the situation is grim,” said Peter Morici of the University of Maryland. “Adding in part-timers who want full-time employment and discouraged adults who have abandoned searching for jobs, the unemployment rate becomes 13.7 percent.  This figure has fallen because more adults appear reconciled to permanent part-time status.”

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13 Responses to Persistent Scars of Long-Term Joblessness

  1. Jack Collier says:

    Under-employment on a low salary is just as bad as unemployment, and both are pretty bad here in the U.K. As for the rest of Europe, your chances of getting a job are somewhere between slim and none at all. If you’ve never had a job, the chances are that you will never get a job.

  2. weggieboy says:

    The further kick is if/when you get a job, you typically are lower in seniority compared with co-workers, and come the next slow down, guess who gets laid off?

    With the dysfunctional Congress we have, slow growth and Congressionally-generated crises are a given.

    Who’s to blame? I blame all American voters for not truly evaluating the petty politicians they send to Congress. I know the Republicans and Democrats like to blame each other or the President, so I hope my point of view is helpful and refreshing.

    Of course, it does spit to help the people government policy hurts, but the challenge is to listen closely to people wanting public office, then track them like a hound dog once they gain office and start claiming they work for the people.

    • Natasha says:

      I know I am at risk as a newer employee and after a year of unemployment after many years at one company, I don’t expect longevity at one company as I did in the past. I also accept my underemployment as there is nothing I can do about it at this time. Our politicians could be finding a solution to the employment problem but I guess it is easier to fight about it and blame each other rather than effect real change.

  3. The amount I received on unemployment from my last full-time job was actually higher than I now make at my current job. And, because unemployment was weekly instead of every other week, I was able to afford more — namely car repairs. I felt like I was contributing more to the economy on unemployment than I do now.

    • Natasha says:

      I understand how you feel. I am making less now at my new job than I did on unemployment and even much less than my last job. It’s not enough to survive in New Jersey.

  4. And they STILL don’t mention that most of these jobs created over the last 5 years are part time, minimum wage jobs…

    As I was saying during the 2012 election cycle-HOPE to have enough CHANGE to take the bus to the polls…

    • Natasha says:

      Many people believe that the economy is getting better – except those of us who were long term-unemployed and are now happy to have a part-time job – even if it doesn’t pay the bills.

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