Unemployment Rate Dips to 7-Year Low While Long-Term Unemployment Remains High
By Unemployment-Extension.org | March 29, 2015 at 8:26 PM |
According to the Labor Department's newly issued report, almost 300,000 jobs were added to the U.S. economy throughout the month of February. Those numbers exceeded the expectations of economists and revealed that unemployment is now at its lowest level since the spring of 2008.
While such news is certainly good for the U.S. economy as a whole, one bit of information contained in the Labor Department’s report that has received little media attention. The number of long-term unemployed has improved very little. Currently, the long-term unemployment figure - the number of individuals who have been without a job for 27 weeks or longer - stands at 2.7 million. Furthermore, the long-term unemployed account for 31.1% of the total number of unemployed in the United States.
Statistics Do Not Reveal the True State of Unemployment
While statistics indicate that the number of long-term unemployed have declined slightly, those numbers do not incorporate the share of the unemployed who have been out of work for such a long time that they have lost hope and given up on trying to find employment at all. Prior to the Great Recession, the long-term unemployment number of individuals who had been unemployed for 27 weeks or longer averaged about 15% of unemployed individuals, according to data released by the Bureau of Labor Statistics. During the Great Recession, however, that number increased to as much as 45%, representing the highest level of long-term unemployment since long before the Great Depression.
There had been hope among many long-term unemployed that the new Republican-controlled Congress would take steps to reinstate extended unemployment benefits, but that has not proven to be the case. In the past, Republicans have indicated their belief that the expiration of the Emergency Unemployment Compensation program would result in a significant decrease of the long-term unemployed population. As the long-term unemployed numbers decline, the problem appears to be magnified, as the longer an individual remains unemployed, the more this serves as a stigma and obstacle to re-employment.
Long-term unemployment has been a common element in previous recessions; however, the percentage of long-term unemployed has been far greater in the most recent recession and has lasted much longer. Unfortunately, there seems to be little sympathy for the nearly 3 million long-term unemployed that remain out of a job. States with budgetary issues have been reluctant to offer assistance. While the standard amount of time for unemployment benefits was once 26 weeks, seven states have now reduced the length of time for unemployed benefits to 20 weeks or even less.
Little Help Available to Long-Term Unemployed
Designed to assist individuals unemployed for more than 27 weeks, the Emergency Unemployment Compensation program expired at the end of December 2013. Although subsequent bills that would extend the EUC have been introduced, they have failed to pass the Senate. The most recent of such legislation failed to pass because it lacked job creation measures. Since then, there has been no further action toward a bill that would extend long-term unemployment benefits.
Effects of Long-Term Unemployment
The need to provide assistance for the long-term unemployed is not only essential for those who are unemployed, but also for their communities. In areas where long-term unemployment remains at high levels, there is often reduced investment in housing. Retail businesses may also suffer due to lower levels of disposable income. According to a report released by the Urban Institute, long-term unemployment could also contribute to higher rates of criminal activity. Along with impacting current income, periods of long-term unemployment can also have an effect on future earnings, according to the Urban Institute's study. Individuals who were laid off due to company closings may experience a reduction of their wages up to as much as 10 percent for a period as long as 10 years following the closure.
Despite the evidence regarding the consequences of long-term unemployment, not only there is less assistance available from unemployment benefits, but also there are fewer programs available to assist the long-term unemployed in finding work. Most workforce programs are designed to target individuals who have been recently unemployed.
With short-term unemployment improving, for now there appears to be little help on the horizon for the remaining millions of long-term unemployed individuals.
Other Unemployment News
Does Cutting Unemployment Benefits Reduce Unemployment?
1 in 5 Suicides Linked to Unemployment, Researchers Find
More News
