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Jun
2013
14

Plight of the Long-Term Unemployed Going Unnoticed Despite Sequester, Other State-Specific Exacerbations

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Glossed over in the May Jobs Report are troubling facts about the long-term unemployed.  Numbers indicate that those out of work for 27 weeks or longer are faced with an increasingly steep climb back into the workforce.

Following the release of April’s Jobs Report, Bloomberg news published an informative piece about how long-term unemployment is turning people into pariahs.  Of course, one month changed littled.  The graph above highlights the impact of term of unemployment on chances for re-employment and is accompanied by analysis:

4.4 million workers have been out of a job for more than six months. In essence, the job market has normalized for the short-term unemployed. But the longer you have been out of a job, the bleaker the picture gets.

The number of people who report being out of work for less than five weeks has returned to almost the same level as in 2007. But the number of people unemployed 5 to 14 weeks is about 25 percent higher. For those out of a job 15 to 26 weeks, it is 78 percent higher. And the number of long-term jobless, those unemployed for more than 27 weeks, is a whopping 257 percent higher.

At the beginning of the recession, the spike in long-term unemployment was explained away by claims of obsolete skills and obsolete industries.  Nearly five years later, economists now admit that this was not the true cause and that long-term unemployment rates are somewhat evenly distributed across industries.  Discrimination appears to be a more likely cause of this trend as companies unfairly pigeonhole the long-term unemployed as less employable.

It has been over two years since revelations of “long term unemployed need not apply” stipulations being added to job postings. Now, post-sequester America is facing down the prospect of an estimated 3.8 million people having their federal unemployment payments reduced this Fall.

In North Carolina, a new law which “reduces the maximum state benefits a laid-off worker can receive by roughly one-third,” will force 70,000 residents off federal benefits on July 1st.  Bill Rowe, director of advocacy for the N.C. Justice Center, explained the situation to the Charlotte News and Observer:

“We’re the only state that is doing this.  People will have less money to pay their rent or mortgage payment or utility bills and all the other necessities their families need. They’ll have less money or, in some cases, no money.”

Arizona is also reducing benefits for the long-term unemployed, though on a smaller scale. On average, benefits will drop from $240 to $200 a week.

For 80,000 Illinois residents the situation is similar. A $51 weekly reduction is planned there.

Cutting benefits results in a weaker consumer base. It also undercuts a job applicant’s mobility and livelihood as they scour the bottom of the barrel for a way back into the workforce. This arbitrary system of outcasting is one of the nation’s least discussed and most vicious cycles.

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