Many workers are jobless far longer than usual

McClatchy NewspapersJune 3, 2010 

WASHINGTON — Even as employers have resumed slowly hiring this year, a disturbing trend pulls in the opposite direction, as the number of Americans who've been jobless for half a year or more continues to reach new records.

Throughout last year, when unemployment averaged 9.3 percent, the long-term jobless averaged 31.5 percent as a percentage of all unemployed.

"The situation remains very dire in the labor market," said Heidi Shierholz, a labor economist with the Economic Policy Institute, a liberal research center that closely tracks employment data.

The previous modern worst showing for long-term unemployment was in 1983, when, coming out of what was then the worst recession since the Great Depression, 23.7 percent of the jobless were long-term unemployed. After the 1991 recession, the long-term unemployed in 1992 were 20.2 percent of the jobless.

As bad as 2009 was, better data skewed the 31.5 percent number early in the year. By December, the long-term unemployed were 39.8 percent of the jobless. That share crept up month by month to 46 percent in May, meaning that almost one in two Americans who’ve lost jobs have now been unemployed for longer than 26 weeks.

"The main thing I'm concerned about is it was so much higher in 2009 than in any recession, and we've only seen it go up since then," said Kai Filion, a policy analyst at the Economic Policy Institute who crunched the numbers for McClatchy to provide a state-by-state breakdown.

His concern is well-founded. Averaged over the first four months of this year, 43 percent of unemployed Americans have been jobless for 27 weeks or more. That's more than double the 1992 average, almost twice the 1983 average and approaches one out of every two unemployed workers.

"The way you think of long-term unemployment is it is a sign of severe deep recession. States that get hit particularly hard are going to get particularly high unemployment," said Jesse Rothstein, the chief economist for the U.S. Department of Labor.

State long-term unemployment rates closely track the states' jobless rates, he said.

Economically devastated Michigan led the nation in 2009 with 40.8 percent of its unemployed workers out of work more than half a year. Michigan also had the highest unemployment rate in 2009 at 13.6 percent.

South Carolina, with a strong manufacturing and tourism base, had the second highest jobless rate in 2009 at 11.7 percent; of those unemployed workers, 39.3 percent — the second highest — had been jobless for 27 weeks or more.

Georgia, suffering a housing-market plunge in the Atlanta area, had the third highest percentage of long-term unemployed workers at 37.2 percent, but a tamer unemployment rate of 9.6 percent.

The Economic Policy Institute data also showed that California, with the third highest 2009 unemployment rate, 11.4 percent, had the 10th highest long-term unemployment rate, 34.9 percent.

The steep rise in long-term unemployment has led to speculation about possible structural changes in U.S. employment, but the close link between high unemployment and high long-term unemployment has some economists concluding the opposite.

"I think it calls into question the idea that the long-term unemployment we're seeing now is resulting from major structural shifts. ... It suggests that the primary driver of the long-term unemployment is a long, deep recession," Rothstein said. "As we start to see robust, sustained job creation, we should see long-term numbers come down quickly."

That's unlikely anytime soon.

"Things are going to take a relatively long time to turn around. You can't see full employment from here," said Raj Chetty, a Harvard University economist.

The long-term unemployment numbers provide fuel for those who are arguing for extending unemployment benefits, which usually last 26 weeks. Congress has extended these benefits several times since the recession began in December 2007. The House of Representatives passed another extension last Friday, but the Senate hasn't yet agreed.

If Congress fails to extend benefits beyond the current 99-week maximum, the Economic Policy Institute estimates that 8.2 million Americans will fall off the aid rolls. Even with an extension, the drop-offs will number at least 3.3 million.

When benefits expire, severe poverty often awaits. The U.S. Department of Agriculture said that 33.7 million Americans received food stamps in 2009, up sharply from 26.5 million in 2007. This March, the latest numbers available, more than 40.1 million Americans were getting food stamps.

"It is the most fundamental safety-net program that's available, so when the food-stamp program grows it does speak to the economy. Many people will turn to food stamps because unemployment (benefits) wouldn't be available," said Stacy Dean, the director of food assistance policy at the Center on Budget and Policy Priorities, a liberal research organization.

2009 FIVE WORST STATES FOR LONG-TERM UNEMPLOYMENT

Michigan, 40.8 percent

South Carolina, 39.3 percent

Georgia, 37.2 percent

Rhode Island, 36.7 percent

Connecticut, 36.7 percent

1992 FIVE WORST STATES FOR LONG-TERM UNEMPLOYMENT

Connecticut, 35.5 percent

Massachusetts, 34.9 percent

Rhode Island, 33.6 percent

West Virginia, 29.6 percent

New Jersey, 29.1 percent

1983 FIVE WORST STATES FOR LONG-TERM UNEMPLOYMENT

West Virginia, 40.1 percent

Ohio, 36.9 percent

Pennsylvania, 33.7 percent

Michigan, 32.9 percent

Wisconsin, 32 percent

Source: Economic Policy Institute, using data from Current Population Survey.

ON THE WEB

State unemployment rates in April

Food stamp data by state

Economic Policy Institute report of median job-search length by state

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