Understanding Long-Term Unemployment in the U.S.
In order to be classified as "long-term unemployed" by the Bureau of Labor Statistics (BLS), you must have been out of work for 27 weeks or longer and actively looking for a job in the past four weeks. To grasp the implications of long-term unemployment, it's essential to examine the statistics, causes, and effects associated with it.
Breaking it Down by the Numbers
As of November, there were 1.2 million long-term unemployed individuals, similar to the previous month. The number of people jobless for six months or more is 54,000 higher than pre-pandemic levels. Long-term unemployed individuals represented 20.6% of the total unemployed population in November.
The Impact of Long-Term Unemployment
The percentage of long-term unemployed individuals compared to all jobless individuals serves as a crucial gauge of the U.S. economy's well-being. Prolonged unemployment, particularly in the wake of events like the COVID-19 pandemic, can hinder economic recovery. Not only do long-term unemployed individuals lose eligibility for unemployment insurance (UI) benefits, but they also face challenges reentering the workforce, as shown in the chart below.
Identifying the Root Causes
Cyclical unemployment triggered by recessions and structural unemployment stemming from a mismatch in job market skills are the primary culprits behind long-term unemployment. A third type, frictional unemployment, relates to temporary joblessness during a job search. It's essential to note that cyclical and structural unemployment often intersect, exacerbating economic woes.
The Repercussions of Long-Term Unemployment
Extended joblessness can take a toll on personal finances and overall well-being. Studies indicate that long-term unemployed individuals face income loss, strained relationships, and decreased self-esteem. The recession's lasting effects impact career trajectories, lead to career changes, and often result in underemployment with reduced wages and benefits.
Extending a Helping Hand
During the Great Recession, federal unemployment benefit extensions provided crucial support to long-term unemployed individuals, enabling them to sustain themselves while seeking suitable employment. Without these extensions, many would have settled for inadequate jobs, hindering their long-term prospects and exacerbating skill obsolescence.
Calculating the Long-Term Unemployment Rate
The long-term unemployment rate is easily determined by referencing the BLS's monthly Employment Situation Summary, which breaks down unemployment statistics. By analyzing Table A-12, which details individuals unemployed for 27 weeks or longer, you can ascertain the percentage they constitute of the total unemployed population.
Answers to Common Questions
- How long does unemployment insurance last? Eligible individuals in the U.S. can receive up to 26 weeks of unemployment insurance (UI) payments.<br>- What qualifies as long-term unemployment? The BLS defines it as being out of work for 27 weeks or longer while actively seeking employment in the past four weeks.
