Long-term unemployment is still destroying the lives of millions of once hard working Americans. The December BLS report shows, “those jobless for 27 weeks or more was little changed at 5.6 million and accounted for 42.5 percent of the unemployed.” And that number doesn’t include the millions of unemployed who are so discouraged with the job market that they have stopped looking for work. In December, more than 1.9 million Americans have been unemployed for 99 weeks or more. Although that’s lower than the record 2.0 million, it’s a number that shows how difficult it is for many to find work – any kind of work.
The labor force participation rate is lower than it’s been since 1984. That simply means that fewer people are now participating in the labor force. That reduction in labor is the main reason why the unemployment rate has fallen to 8.5%. Zerohedge.com had an interesting take on the participation rate, “It won't surprise anyone that as of December, the real implied unemployment rate was 11.4% (final chart) - basically where it has been ever since 2009” What would a declining participation rate mean going forward (sarcastically speaking) “And because we know this will be the next question,extending this lunacy, America will officially have no unemployed, when the Labor Force Participation rate hits 58.5%...”
Statistics tell a story of a still stagnant jobs market, but it’s the lives behind those statistics that are the real tragedy. Yet what is Congress doing to help the unemployed? Well, they are still deciding if there will be an extension of benefits past the February 29 deadline. If unemployment benefits are not extended, An estimated 3.3 million Americans could be kicked off the unemployment rolls by June, including nearly 600,000 in California, if Congress fails to continue extended jobless benefits after February, according to a legislative report released Tuesday. Things aren’t any better for the unemployed in other states. 17,000 Pennsylvanians may run out of extended unemployment benefits by the end of this week, “About 17,000 jobless Pennsylvanians will run out of unemployment benefits by the end of the week because the state House has yet to approve a bill extending them.” The unemployment rate in Ohio is less than it has been and as a result “Nearly 20 percent of the 250,000 people on the unemployment rolls in Ohio would lose benefits under such a scenario, the newspaper reports.”
Millions of 99ers (those who have exhausted unemployment beneifts) have been without any type of aid for up to two years. Sadly, those millions of families have been completely ignored by both political parties of late.
The long-term unemployed are often ridiculed, harassed, and depicted as lazy by numerous congressional representatives and right wing commentators. The latest effort to pass a draconian unemployment bill by the GOP controlled House included forced drug testing and a 20 week reduction in benefits from the current 99 week maximum that is allowed in some states. But a recent federal report shows that the main reason for this near structural long-term joblessness is rather simple, “During the recent recession, unemployment duration reached levels well above those of past downturns. Duration has continued to rise during the uneven economic recovery that began in mid-2009. Elevated duration reflects such factors as changes in survey measurement, the demographic characteristics of the unemployed, and the availability of extended unemployment benefits. But the key explanation is the severe and persistent weakness in aggregate demand for labor.” The bottom line is that there aren’t enough jobs for those who want them.
You may have read about a few of the long-term unemployed who are still suffering the pains of joblessness; Alexandra Jarrin, and Toni Booughner to name but two. Alexandra Jarrin is on her feet but barely holding on. Toni Boughner recently sent me a letter saying she is broke and is afraid of being homeless soon unless she can get some help financially. I’ll have more on her situation in a follow-up report. The long-term unemployed aren’t lazy good-for-nothings, they are people who need a job. Unfortunately, those jobs are still tough to find.
There is little reason to think that unemployment would be substantially lower if unemployment benefits were of shorter duration, “However, estimates from Aaronson et al. and other research … suggest that the contribution of extended UI to prolonged durations has been modest.”
The January jobs report is due to be released this Friday. We’ll know soon enough if hiring is picking up steam or if it’s still an illusion. Regardless of the upcoming report, Congress needs to act quickly to extend unemployment benefits to those who are most in need. Congress needs to stop playing games with the lives of millions of the unemployed, but if history is any indication, that is likely wishful thinking……
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