As Jobs Improve, Long-Term Unemployment Remains a Big Problem

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This morning, we learned that the labor market is slowly, but genuinely, improving. In March, 218,000 jobs were added and the unemployment rate ticked down to 8.8%. The report made clear that the U.S. employment situation actually getting better, as statistical tricks aren't driving the positive trend. But there's one aspect of the unemployment problem that isn't improving much: the length of time Americans have been out of work.

Unemployment duration is measured by the Bureau of Labor Statistics in a pretty basic way. It provides four buckets of time segments in which to group unemployed Americans. They are "Less than 5 weeks," "5 to 14 weeks," "15 to 26 weeks," and "27 weeks and over." Here's how these groups have changed since 2006, before recession began:

duration full 2011-03.png

You can see pretty clearly that the duration for the long-term unemployed has grown dramatically since the recession began. It hasn't declined much either, while the other groups have shrunk since they peaked in 2009. How dramatic are these changes? Here are some statistics that show how much worse unemployment has been on the long-end:

duration stats 2011-03.png

For the first three duration buckets, the population of jobless Americans has declined from their peak by between 30.5% and 42.9%. But the number of long-term unemployed, those who are jobless for 27 weeks or more, has only declined by 8.8% from its peak. It would have to decline 82.4% further to reach its pre-recession level, while the other buckets would need much smaller declines to return to normal levels.

In fact, long-term unemployment is probably even worse than it looks. Remember, the numbers we've been considering so far only include people who the Bureau of Labor Statistics considers officially unemployed. Still more Americans want jobs and can't find one, yet they aren't considered unemployed. Many of these Americans, like discouraged workers, have likely been unemployed for a very long period of time as well. And the number of Americans who want jobs, but aren't considered unemployed has grown considerably even over the past year:

duration want 2011-03.png

Even in March, as almost all other statistics improved, this number continued to climb, hitting a new high of 6.5 million Americans. If added to the bucket of people who have been unemployed for 27 weeks or more, then it would more than double. That might be an exaggeration, but at a minimum, the nearly one million discouraged workers have likely been unemployed for at least six months.

It's important not to forget about this persistent problem. Even as the economy slowly adds jobs, many Americans will remain unemployed for years on end. And since Congress hasn't extended emergency insurance past 99 weeks, in some cases their extended benefits will have run out.

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Daniel Indiviglio was an associate editor at The Atlantic from 2009 through 2011. He is now the Washington, D.C.-based columnist for Reuters Breakingviews. He is also a 2011 Robert Novak Journalism Fellow through the Phillips Foundation. More

Indiviglio has also written for Forbes. Prior to becoming a journalist, he spent several years working as an investment banker and a consultant.
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