Long Term Unemployment

Scarring Effects:Demographics of the Long-Term Unemployed and the Danger of Ignoring the Jobs Deficit

Key Points

  • Taken together, the “sequester” and other budget-cutting policies will likely slow GDP this year by 2.1 percentage points, costing the U.S. economy over 2.4 million jobs.
  • All told, there are 27 million unemployed or underemployed workers in the U.S. labor force, including not only the unemployed counted by official jobs reports, but also the eight million part-time workers who would rather be working full-time and the 6.8 million discouraged workers who want to work but who have stopped looking altogether.
  •  Several years after the official end of the recession, the average duration of unemployment remains at least twice that of any other recession since the 1950s. An unprecedented four in ten jobless workers—nearly five million people—have been out of work for 27 weeks or longer, pushing the average duration of unemployment up to 37 weeks, nearly 16 weeks longer than during the worst of the 1980s downturn.
  • Women constitute a smaller portion of the long-term unemployed than their overall representation in the workforce, but continuing budget cuts and public sector job losses since the recession officially ended have unnecessarily slowed the recovery for women.
  • Austerity measures and public sector layoffs contribute to a disproportionately high representation of African-American workers among the long-term unemployed. One in five jobs in state and local government lost during the downturn resulted in a pink slip for a n African – American worker. 2 And because Latino youth make up 30 percent of all youth enrolled in federal job training programs, 3 cuts to federal and state education and workforce budgets threaten to reverse recent gains for these workers and could disproportionately affect Latinos.
  • Older unemployed workers suffer the highest percentage of long-term unemployment of all age groups, with more than half of unemployed workers ages 45 and older out of work for longer than 27 weeks. With families to support and mortgage payments to make, older unemployed workers have fewer years to make up for lost retirement savings and are likely to instead fall back on already strained disability, medical, and income support programs.
  • A college degree is not a guarantee of work. During the Great Recession, the number of long-term unemployed with a bachelor’s degree in creased fivefold, while those with some college experienced a similar increase. Even now, there are just over 900,000 long-term unemployed workers with a bachelor’s degree.
  • Public sector jobs are an important avenue for workers with more formal education: almost 16 percent of recent graduates with a bachelor’s degree go into government work, as do nearly 26 percent of those with advanced degrees. With ongoing austerity measures limiting these employment opportunities, however, more of these workers will be pushed to join the 15 percent who already go into service occupations.
  • The Great Recession exacerbated a long-term trend away from good jobs. Six in ten jobs lost during the downturn were in mid – wage occupations. By comparison, during the recovery, employment in lower – wage occupations grew by 2. 8 times more than employment in mid- and high-wage occupations. Not only do these jobs pay inadequate wages, low-wage jobs in food services, retail, and employment services are synonymous with high turnover, erratic work schedules, limited access to employee benefits , and few opportunities for career advancement.

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