It is important to understand the statistics and the causes and consequences of long-term unemployed.
The Numbers
- In November, there were 1.2 million long-term jobless people, which was the same as the previous month.
- It is estimated that 54,000 more people are unemployed than before the pandemic.
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What long-term unemployment means for you
The percentage of long-term jobless people in the total number of unemployed is a useful tool to gauge the health of the U.S. economic system. Even though events like the COVID-19 Pandemic may temporarily displace millions, if they remain unemployed it will be even worse for the economy. These people will no longer qualify for unemployment benefits (UI), and studies show that it is harder to find a job the longer they’ve been out of work.
The chart below shows the distribution of unemployed workers according to the duration of unemployment between 2010-2022.
The main causes of long-term unemployment
The two main causes of long-term unemployed are cyclical employment and structure unemployment. recession is often the cause of cyclical unemployment. Structural unemployment occurs when the skills of workers no longer match the demands of the market.
The third type of unemployment is “frictional” unemployment. This refers to the temporary unemployment that you experience during your job search. These situations are usually short-term and not included in discussions of long-term unemployment.
Note:
Both long-term structural and cyclical unemployment are interdependent.
A recession can cause a dramatic increase in cyclical employment. People who cannot find work become long-term jobless. After a certain period of time, skills can become obsolete. This leads to structural unemployment over time. This leads to a reduction in consumer demand. This further slows down economic growth and leads to more cyclical joblessness. 3
The main effects of long-term unemployment
Unemployment for 6 months to 1 year can be a strain on your finances. In a Pew Research report on the Great Recession, it was found that the recession affected the long-term jobless more than other people in terms of their personal relationships, career goals, and self confidence.
The long-term unemployed in particular reported:
- Over half (56%) saw their income decrease, compared to 42% for those short-term jobless (less than 3 months) and only 26% for those who retained their jobs.
- Nearly half of respondents experienced strains in family relationships. This is compared to 39% for those who were not unemployed as long. 43% of those who lost touch with friends have also been unable to contact them.
- Nearly 40% of people lost their self-respect. Nearly one quarter of short-term jobless people sought professional help with depression, compared to only 10% of those who were unemployed.
- For 43% of respondents, the recession has had a “big effect” on their career aspirations. Only 28% of those with short-term goals can say the same.
- Over 70% of respondents say they have changed careers, or are seriously considering a change. A further 29% of respondents became unemployed, with pay and benefits lower than their former job.
How Extensions of Long-Term Unemployment Benefits Can Help
Federal unemployment benefit extensions helped the long-term jobless in their efforts to find a new job after the Great Recession. Congress approved the extension in the 2009 American Recovery and Reinvestment Act. Every year, they were reauthorized until 2013.
6 The benefit helped them support themselves until they found decent jobs. They would have been forced to accept any job, which could lead to underemployment, if they had not received the extension. It could prevent them from catching up with their skills as they become more outdated.
Unemployment benefits are usually only available to those who have been laid off. Employers may fire employees for good reason or ask them to resign for a severance in exchange for the severance. This way, they can avoid paying benefits. Benefits are not available to workers who quit their jobs, self-employed people, students, or new mothers.
Calculate Long-Term Unemployment Rate
The BLS provides monthly Employment Situation Summary statistics that make it easy to calculate the long-term rate of unemployment. Table A-12 shows the number of people unemployed for more than 27 weeks. 7
The BLS calculates their percentage of total unemployment. This table shows you data over the last five months and seasonally adjusted . You can also compare the two most recent months, and year-overyear without season adjustment.
FAQs (Frequently Asked Questions)
How long is unemployment insurance valid?
The Department of Labor’s website lists the contact information for each state’s unemployment insurance office.
