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Long-term unemployed
Many bloggers—economic pros and amateurs alike—have discussed the situation of the long-term unemployed for years. That category of jobless person covers anyone who has been out of work for 27 weeks or longer. Occasionally, this crisis has gotten brief notice elsewhere, a piece, say, in the Wall Street Journal about how the longer one is out of work the harder it is to find a job. But the situation and what it means for our future has gotten the attention of analysts other than prescient observers like the folks at the Economic Policy Institute.

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.

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.

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.

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.”

But she gave one glimmer of hope: that a faster recovery would help the long-term jobless, if it would only speed up.

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.

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.

Originally posted to Daily Kos Labor on Mon Apr 07, 2014 at 12:55 PM PDT.

Also republished by Daily Kos.

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Comment Preferences

  •  Long-term joblessness is still twice as high (2+ / 0-)
    Recommended by:
    Larsstephens, Eric Nelson

    Warning - some snark may be above‽ (-9.50; -7.03)‽ eState4Column5©2013 "I’m not the strapping young Muslim socialist that I used to be" - Barack Obama 04/27/2013 (@eState4Column5).

    by annieli on Mon Apr 07, 2014 at 01:07:35 PM PDT

    •  At least they give them a choice. (0+ / 0-)

      I've seen stores that detain people for shoplifting and call the police on them before they have even left the the counter because they forgot to take out something from a basket provided for shopping by the store.

      "If you tell the truth, you'll eventually be found out." Mark Twain

      by Steven D on Mon Apr 07, 2014 at 01:30:01 PM PDT

      [ Parent ]

  •  I think it's a false hope. (1+ / 0-)
    Recommended by:
    trkingmomoe
    We've been hearing from many analysts every year since 2010 that a speed-up, or an economic take-off point, is just around the corner. So far, we haven't gotten to that corner, much less around it.
    This really, really looks like structural unemployment.  The fact that many of the workers went back to the same profession just separates them from the ones who essentially have no profession to go back to anymore (those displaced by technology.)

    I mean, I'm sure a rising economy will left everyone's boats, but I don't think, say, small-town journalism jobs are coming back.

    •  As a 60 year old Network Systems Engineer, .... (9+ / 0-)

      technology didn't take my career away:  It moved to another state without me.

      And nobody cares.  Yes, some jobs did leave due to technology, but many folks like me are college educated and highly trained in our respective professions and can pick up in todays technical fields where we left off with better work skills and maturity within a week of on the job training.  Heck, we designed, built and maintained the GD technology, and it hasn't changed that much as far as I can keep up with it.  Only the mindset of the current group of HR and MBA "thumbsuckers" with their jaded discrimination of age in terms of hiring has come to rule the day.

      Sorry about my rant, but I do feel better now....  Time for my Geritol, and to change my Depends.

      “My soul is from elsewhere, I'm sure of that, and I intend to end up there." - Rumi

      by LamontCranston on Mon Apr 07, 2014 at 06:51:52 PM PDT

      [ Parent ]

      •  Rant away, friend... (6+ / 0-)

        In age, I'm two years behind you and realize that, even with all my experience and knowledge (or maybe, because of it), I couldn't get another job if I lose the one I have... and this one was a 2/3 cut from my previous one!

        Also, hubby is 2 years ahead of you, age-wise, and he's in his 5th year of unemployment, and still trying to get anything.  We're barely hanging on by a shoestring, even tho we've gone bare-bones on everything.  But a heart attack for one of us, two major surgeries for the other, and a $700 vet bill for removal of an external tumor on our dog has us wondering where in the heck the break even point is going to be again.  We came too close to losing the house last year; it's a damn scary place to be!

        And yes, I totally agree with you it's age discrimination.  Why pay us, when you can pay the "young'uns" in pizza for those late nights?  I did my share of them at that age, too.  But when jobs... or employers hiring American workers... are too few and far between, there needs to be some changes coming from DC to address the problem, IMO.

        For example, DC should either enact a non-discriminatory WPA-like program, or cut the retirement age, increase SS, and offer medicare for anyone retired.  

        This latter would have the advantage of taking those of us Boomers who would like to retire out of the market - thus opening it up for the younger generation to start making their mark.  Right now, the oligarchy just has all the generations at each others' throats.

        Of course, for the Oligarchy, that's a feature... not a bug!
        grrrrrrrrrr

    •  Krugman disagrees (0+ / 0-)

      He wrote an piece on it for NYT a few weeks ago.

  •  Maybe somebody would do something (0+ / 0-)

    if they linked long-term unemployment as a cause of a jump in the suicide rate.

    Best Scientist Ever Predicts Bacon Will Be Element 119 On The Periodic Table

    by dov12348 on Mon Apr 07, 2014 at 02:11:02 PM PDT

  •  I see so many people 40-50 (8+ / 0-)

    who were selectively fired during the recession because they made more, were closer to a pension and had a few more health issues.

    During those years without a job that supplied insurance, many of them gained weight, developed worsening of their health problems due to lack of insurance and health care and ended up on disability, depriving the nation of their skills and labor and increasing our Social Security payments.

    If we had had single payer insurance in 2008, this would not have been nearly the crisis that it was. Even without jobs, the unemployed middle aged could have kept their health. When jobs came back, they would have been ready for the market. But 4-6 years without health care is a lot if you area diabetic with high blood pressure and heart disease.

    "A dog starved at his master's gate/Predicts the ruin of the state" Blake

    by McCamy Taylor on Mon Apr 07, 2014 at 02:50:26 PM PDT

  •  How else can we get to the "level playing field".. (3+ / 0-)

    of economic competition via lower incomes like other low wage coolie labor competing countries and more hours of production if we have a better employment picture for the commons?  If we have a society that is afraid of bucking the system (Unions, fighting for ethical treatment in the workplace, legislating for a living wage, etc..), then that gives employers the one ton sledge hammer silent threat of "there are 10 more people behind you that want your job", BS.

    The beatings will continue until morale improves....

    Don't bet on any improvement on that front (morale), or on the plight of the long term unemployed, as well.  Try being 60 years old and out of meaningful work (in ones profession with over 20 plus years experience), and going on 2.5 years with out a real decent paycheck...  

    Oh, we can make ends meet, but it sucks none the less.

    Can't wait till I hit 62...........

    “My soul is from elsewhere, I'm sure of that, and I intend to end up there." - Rumi

    by LamontCranston on Mon Apr 07, 2014 at 06:41:02 PM PDT

    •  Question about your last line.... (1+ / 0-)
      Recommended by:
      flowerfarmer

      I'm assuming you say "Can't wait til I hit 62..." because you can apply for SS then, correct?

      I thought you couldn't do that until you hit 63?  Please disavow me of this idea... it means hubby could apply now and we could have at least a little more money coming in!

      •  The day you turn 62 (5+ / 0-)

        you qualify for SS and also HUD elder housing for 1/2 of your income.

        Go for it, everybody, before we all lose it.

        'How like fish we are: ready, nay, eager, to seize upon whatever new thing.......And how we rue our haste, finding the gilded morsel to contain a hook". ALDO LEOPOLD - A Sand County Almanac

        by flowerfarmer on Tue Apr 08, 2014 at 05:05:45 AM PDT

        [ Parent ]

        •  That is 1/3 of your income. (2+ / 0-)
          Recommended by:
          Meteor Blades, greengemini

          Typing in the dark, always a mistake.

          'How like fish we are: ready, nay, eager, to seize upon whatever new thing.......And how we rue our haste, finding the gilded morsel to contain a hook". ALDO LEOPOLD - A Sand County Almanac

          by flowerfarmer on Tue Apr 08, 2014 at 05:06:56 AM PDT

          [ Parent ]

        •  Super cool! (3+ / 0-)

          I'll have hubby checking into this post-haste!  Thank you, so much!  I've been fighting anxiety attacks about how we were going to make it til next year when he turns 63.  This actually gives me a ray of hope.  No idea where I got the age of 63 imprinted into my brain... but thank you so much for the info!!!

          BTW... could you explain a bit more about the HUD elder housing?  Does that cover moving into elder housing, or is it help for affording the mortgage payment when staying at home?

          Thanks, flower farmer!!!

          •  Here is a link (4+ / 0-)
            Recommended by:
            salmo, Eric Nelson, greengemini, Creosote

            that will answer your questions.

            HUD Senior housing has been a lifesaver for me.

            The rent is based on 1/3 of your income, most often with utilities included. There is subsidized housing, for families, seniors and the disabled, in every state and territory- Guam and Puerto Rico included.

            I will diary this subject sometime this week- so many people need this support.

            Go for it- fill out applications now and get into the system.

            'How like fish we are: ready, nay, eager, to seize upon whatever new thing.......And how we rue our haste, finding the gilded morsel to contain a hook". ALDO LEOPOLD - A Sand County Almanac

            by flowerfarmer on Tue Apr 08, 2014 at 06:14:44 AM PDT

            [ Parent ]

      •  Yes, it is at 62. I'll be at the door @ 12:01 AM. (1+ / 0-)
        Recommended by:
        greengemini

        “My soul is from elsewhere, I'm sure of that, and I intend to end up there." - Rumi

        by LamontCranston on Tue Apr 08, 2014 at 05:42:10 PM PDT

        [ Parent ]

  •  the "margin" of labor as a norm in the "market".. (2+ / 0-)
    Recommended by:
    Meteor Blades, Creosote

    ..that should be a Dem action goal. Attack the GOP for accepting that there has to be a "margin" or portion of unemployed workers at all as part of the very concept of what defines the "market"

    This question: Are the Long-Term Unemployed on the Margins of the Labor Market?
    ..I'm trying to take this on.

    This paper (pdf) explores the plausibility of a unified explanation for the recent shifts in the price and real wage Phillips Curves and Beveridge Curve in the U.S.: namely, that the long-term unemployed, whose share of overall unemployment rose to an unprecedented level after the Great Recession, are on the margins of the labor force and therefore exert very little pressure on the job market and economy.

    The hypothesis we seek to test is that the longer workers are unemployed the less they become tied to the job market, either because, on the supply side, they grow discouraged and search for a job less intensively (e.g., Krueger and Mueller, 2011) or because, on the demand side, employers discriminate against the long-term unemployed, based on the (rational or irrational) expectation that there is a productivity-related reason that accounts for their long jobless spell

    So this:
    To us, the most important policy challenges involve designing effective interventions to prevent the long-term unemployed from receding into the margins of the labor market or withdrawing from the labor force altogether, and supporting those who have left the labor force to engage in productive activities.

     - emphasis added

    And this blows a fat hole in another GOP think tank economic maxim:
    The low rate of long-term unemployed workers who withdraw from the labor force and report a disability as their reason for not wanting a job suggests that the Disability Insurance (DI) program plays, at most, a minor role in incentivizing the long-term unemployed to withdraw from the labor force, or in supporting them once they do withdraw from the labor force. This observation is also consistent with Mueller, Rothstein and von Wachter’s (2013) conclusion that Unemployment Insurance exhaustions and DI take up are unrelated.
    ..not only proves the "conservative movement" republican party as wrong. It shows that the GOP is broadcasting this myth to a purpose.

    They want a loose labor market (an "excess labor pool" as an asset)  where labor costs are small. Iow's workers systematically get cut out of the fruits of their labor and fair share of the economy.

    So we intervene:
    We can decide on new ways to change and redefine that market. GOP is wrong there is no such thing as this "invisible hand" that no one controls and that the "market" is something that naturally is the way it exists today.

    In this country, right now there may not be enough jobs as defined or rather as the existing market is set up, but there is more work than all of the people on earth could  ever get done at any given point in time.

    That is the truth. A permanent WPA program would use that fact to establish as a goal;  a negative unemployment rate.

    No margin of unemployment ever. Redefine what economics means. Change the rules and laws to bring the fact that there is more work than there are people into reality.

    It is only today's economic policy, refusal to enact a permanent public works program, that has made unemployment a "reality" of the economy.

    A reality that is unreal - based on how much work there really exists to do

    And people deserve time for enjoying their lives beyond earning a living. So taking the fact that there is more work than workers and not the other way around, leisure time will become as natural a part of life as has the un-natural market system that has created this excess labor force to begin with.

     - imo

    Thx MB

    P.S.- I'm way late but am hot listing these Chart of the Day Dairies for ease of future reference/access, and to make these thoughts into a Diary when I can say it in a smart way.

  •  I wonder if there are any studies (6+ / 0-)

    I wonder if there are any studies exploring how many of the long term unemployed, (now working full time), have taken significant pay cuts to return to work? I am now doing the same kind of work I did when I was in college for about 40% of what I had been making in my last job in research. A whole lot of people I've talked to that have been unemployed long term have returned to an old skill and/or taken a large pay cut. Don't get me wrong, I was over 50 and unemployed for 28 months and now I have a very decent job with regular hours and even some benefits so I'm not complaining but it seems like the jobs that have come back aren't as good as the ones we lost.

    "Given the choice between a Republican and someone who acts like a Republican, people will vote for a real Republican every time." Harry Truman

    by MargaretPOA on Tue Apr 08, 2014 at 05:44:48 PM PDT

  •  They do not want retraining and rehiring. (3+ / 0-)
    Recommended by:
    Meteor Blades, greengemini, Creosote

    What they want is to force high wage earners to accept McJobs.

    A long term unemployment program that encouraged updating of skills is certainly a good idea.

  •  As one of the marginal ones (3+ / 0-)
    Recommended by:
    Meteor Blades, greengemini, Creosote

    It is hard to look at this situation and feel like there is much hope of ever earning money again.   Kind of weird this whole "given up" thing.  I do some interesting volunteer work and am helping start a couple of companies that ought to be able to hire others at least.  

    Funny though how hopeless it looks

  •  This works for the 1% (3+ / 0-)
    Recommended by:
    dfarrah, greengemini, Creosote

    The continuing high unemployment is not just natural but a deliberate effort to permanently lower wages and cut the social wage(healthcare, social security, foodstamps etc)
    The government could offer jobs for all at a living wage just like during the depression.  But the democrats have sold us all out and offer only to ease the pain- extending unemployment benefits not creating jobs.  High unemployment works for capitalism to keep wages down and the rich wealthy.  Time for a different system.

  •  Do you need more people to work to meet (2+ / 0-)
    Recommended by:
    daveygodigaditch, Creosote

    …your daily needs?

    Is there no selection in your grocery stores?
    Is there a shortage of appliances?
    Are vacation spots closed?
    Is your mechanic overbooked?
    Are there a lack of cars to buy?
    Not enough restaurants and too long to wait?
    Malls too crowded and not enough theaters?
    Lines too long in the banks?
    Not enough gadgets or apps to buy?
    A shortage of fast food and convenience stores?

    ::

    Advances in productivity have reduced the need for so many people to work to meet the needs of society. People need a living, but not everyone needs to work.

    Sorting this out is going to be one of the greatest challenges we have ever faced.

    The way we usually deal with it is having big wars so that one in four of us work for the defense industry. Using that money to benefit the people via infrastructure just isn't sexy enough. And investing in human capital with health and education is not something we do anymore.

    Can we step into the future with a new paradigm that includes not working?

  •  I'm the 30%. It sucks. (1+ / 0-)
    Recommended by:
    greengemini
  •  GOP's 'solution': 'F$#$# You' (3+ / 0-)

    That pretty much covers it.

  •  Republicans Like High Unemployment (1+ / 0-)
    Recommended by:
    greengemini

    As Economist Michal Kalecki said (1942) the wealthy do not like full employment. Low interest rates for

    their financial games are second order. Low inflation is first order.

    Michal Kalecki:

    "Under a laissez-faire system the level of employment depends to a great
    extent on the so-called state of confidence. This gives the capitalists
    a powerful indirect control over government policy:
    Everything which may shake the state of confidence must be
    carefully avoided because it would cause an economic crisis. But once
    the government learns the trick of increasing employment by its own
    purchases, this powerful controlling device loses its effectiveness.
    Hence budget deficits necessary to carry out government intervention
    must be regarded as perilous. The social function of the doctrine of
    'sound finance' is to make the level of employment dependent on the
    state of confidence."

    You Don't Happen To Make It. You Make It Happen !

    by jeffrey789 on Tue Apr 08, 2014 at 07:05:15 PM PDT

  •  Not to worry. (2+ / 0-)
    Recommended by:
    greengemini, Creosote

    My 'democratic' state reps and one from another district at my district meeting last time were all worried about giving the governor and other highly paid government job-holders, like judges and DAs a pay raise.

    Oh, and they want to give themselves a raise, too.

    And these reps are from dem-dominated districts.

    So, their concern is only how to help the people who make more than 90% of the population even more.

    I'm so proud to be a dem.

    The banks have a stranglehold on the political process. Mike Whitney

    by dfarrah on Tue Apr 08, 2014 at 08:11:00 PM PDT

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