Please read below the fold for more on this story.
The analysis of Alan B. Krueger (the former chairman of President Obama’s Council of Economic Advisers), Judd Cramer and David Cho—Are the Long-Term Unemployed on the Margins of the Labor Market?—was published last month:
Long-term unemployment has remained a persistent problem post-Great Recession – a somewhat new issue for the U.S., as compared to Europe. Despite declining over the last 4 years, the share of the unemployed who have been out of work for more than 6 months still exceeds its previous peak reached in 1981-82, and is well above its average in the last recovery, the authors note. Yet, measures of short-term unemployment are close to their average rates in the last recovery. As a result, overall unemployment remains elevated because of the large number of people who have been unemployed long term.It's true that the situation has improved considerably over the past four years. Long-term unemployment peaked at 6.8 million Americans in April 2010. Last month, according to the Bureau of Labor Statistics, it had fallen to 3.7 million. But short-term joblessness is below where it was when the Great Recession got under way in 2007. Long-term joblessness is still twice as high as it was then.
The long-term unemployed are spread throughout all corners of the economy, with a majority previously employed in sales and service jobs (36 percent) and blue collar jobs (28 percent), they find. In addition, the authors find that when long-term unemployed workers do return to work, there is a tendency to return to jobs in the same set of industries and occupations from which the workers were displaced. [...]
The authors conclude that, to a considerable extent, the long-term unemployed are an unlucky subset of the short-term unemployed.
Annie Lowrie writes:
The evidence remains that the so-so recovery is not enough to help the long-term jobless. “In some ways, the job market is tougher now than in any recession,” said Janet L. Yellen, the chairman of the Federal Reserve, in a speech [last] week. “These workers find it exceptionally hard to find steady, regular work, and they appear to be at a severe competitive disadvantage when trying to find a job. The concern is that the long-term unemployed may remain on the sidelines, ultimately dropping out of the workforce.”The problem? We've been hearing from many analysts every year since 2010 that a speed-up, or an economic takeoff point, is just around the corner. So far, we haven't gotten to that corner, much less around it.
But she gave one glimmer of hope: that a faster recovery would help the long-term jobless, if it would only speed up.
There are government policies, as I and others have pointed out for five years, that could improve the situation. But there hasn't been the political will to push for them nor the votes to implement them. Meanwhile, the suffering continues. And it's not just the long-term unemployed themselves who suffer. With those potential workers waiting in line, it's tough for those who are employed to get raises or turn part-time work into full-time work.