Cars line up at the Athens County Exhibition Center in Athens, Ohio on December 19, 2020 to pick up boxes of groceries.
BRAD LEE | AFP | Getty Images
Long-term unemployment is nearing an all-time high almost a year after the pandemic-triggered downturn.
Workers are considered to be “long-term unemployed” if they have been unemployed for more than six months.
According to labor economists, this is a particularly dangerous period of unemployment.
For one thing, household income can drop significantly. But the dynamism also makes it difficult to find a new job, affects workers’ long-term earning potential and increases the likelihood that they will lose a job later (if they can find one), according to economists.
Nearly 40% of the unemployed were long-term unemployed in January, the Bureau of Labor Statistics reported on Friday.
The share has grown steadily since spring and is approaching the record set in April 2010 after the great recession. At that time, almost 46% of the unemployed had been unemployed for at least six months.
“Massive hole”
According to Heidi Shierholz, director of policy at the Economic Policy Institute, a left-wing think tank, it would take about 29 years for the current pace of employment growth to return to pre-recession levels. (Your analysis uses the average growth over the past three months.)
“There is a huge hole to fill,” said Shierholz, a former chief economist at the Department of Labor.
Of course, it’s unlikely it will take her three decades to recover, she said. The U.S. is handing out vaccines to fight back the coronavirus, and the Democrats aim to invest $ 1.9 trillion in the economy. However, the pain is likely to persist, at least for a short time, before the vaccine adoption becomes widespread and economic activity resumes.
According to economists, the prevailing weak growth is problematic for the long-term unemployed. It is already more difficult for such people to find work, and a lukewarm improvement in the workplace makes this task all the more difficult.
For example, companies can judge long employment gaps unfavorably. Workers in hotels, restaurants, or other worst-hit industries may not have jobs available. Employers in other industries may not easily hire a candidate with less experience than others.
“The longer you are unemployed, the harder it is to find a new one,” said Robard Williams, senior vice president at Moody’s. “That applies both in this time and in good times.”
Unemployment benefits can provide some income support to qualified people. But they are at the mercy of the federal legislature, which has to pass laws to extend the benefits.
The assistance typically lasts up to six months, although Congress has passed laws twice to extend the duration of the benefits. Democrats are trying to pass a $ 1.9 trillion package designed to extend the benefits through September.
“The source of income is not 100% certain,” said Bunker of the unemployment benefit. “It really depends on what’s going on in Washington and when certain bills are passed.”
In fact, nearly 3 million workers appear to have lost their benefits in the week after Christmas, as a $ 900 billion aid package was passed in December. Workers in some states have not yet received any of the 11-week extensions offered by this law.
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