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Published: Wednesday, 10/12/2011

Long joblessness sets weak recovery apart from others

ASSOCIATED PRESS
Job seekers attend a career fair at a Goodwiill store Tuesday, Oct. 4, 2011 in Atlanta. The number of people who applied for unemployment benefits rose slightly, a sign that the job market remains weak. Job seekers attend a career fair at a Goodwiill store Tuesday, Oct. 4, 2011 in Atlanta. The number of people who applied for unemployment benefits rose slightly, a sign that the job market remains weak.
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WASHINGTON — For more Americans, being out of work has become a semipermanent condition.

Nearly one-third of the unemployed — nearly 4.5 million people — have had no job for a year or more. That's a record high. Many are older workers who have found it especially hard to find jobs.

And economists say their prospects won't brighten much even after the economy starts to strengthen and hiring picks up. Even if they can find a job, it will likely pay far less than their old ones did.

Federal Reserve Chairman Ben Bernanke has called long-term unemployment a "national crisis" and said it should be one of Congress' top priorities.

Long-term unemployment sets this recession and weak recovery apart from any other period since the Great Depression. Though the economy has endured "jobless recoveries" before, in no previous recovery has such a high proportion of the unemployed been out of work this long.

Labor Department figures show that for roughly the past year and a half, one in three of the unemployed have been without a job for at least a year. That's more than double the previous peak, after the 1981-82 recession.

Many businesses consider the long-term unemployed as riskier than other potential hires because they are likely to need additional training. Companies aren't likely to take such risks until the economy shows consistent strength.

Long-term unemployment affects the economy in key ways.

It lowers skill levels, making it harder to match the unemployed with available jobs. Harry Holzer, a Georgetown University economist, said that once hiring picks up, employers tend to complain that they can't find people with the new skills they need. Companies are already having trouble filling advanced manufacturing jobs, Mr. Holzer said.

More people rely on government benefits. Unemployment benefits were extended during the recession to a record 99 weeks in states with the highest unemployment rates. The number of people receiving food stamps topped 45 million in May. That's another record. Older workers unable to find jobs often draw their Social Security benefits earlier. Many also have health problems and end up on government disability programs.

The long-term unemployed who do find jobs again are likely to be paid less than at their previous jobs. A study by the Congressional Budget Office found that the long-term unemployed make, on average, 20 percent less when they finally find work.



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