Labor Department

Changing the Definition of 'Long-term Unemployment'

Topics: Economic Development
Countries: United States
Find more graphs and charts depicting the consequences of the "Great Recession" on the United States' economy by clicking on the following link. Photo: <a href="http://www.cbpp.org/cms/index.cfm?fa=view&id=3252">Center on Budget and Policy Priorities.</a>
Find more graphs and charts depicting the consequences of the "Great Recession" on the United States' economy by clicking on the following link. Photo: Center on Budget and Policy Priorities.

Data recently released by the Bureau of Labor Statistics bears discouraging news for the unemployed. In short, the Bureau's findings reveal that the longer an individual remains unemployed, the less employable they become.

The New York Times explains how the likelihood of landing a job diminishes after a lengthy period of unemployment:

… [P]eople out of work fewer than five weeks are more than three times as likely to find a job in the coming month than people who have been out of work for over a year, with a re-employment rate of 30.7 percent versus 8.7 percent, respectively.

Neal Conan from National Public Radio's "Talk of the Nation," expands on the issue, reporting that high rates of long-term unemployment are a product of the high level of overall unemployment, which gives employers the luxury of being selective in their hiring process.

For every job open in America, there are five unemployed workers anxious to apply. That means employers can afford to be picky. Some would-be bosses don't want to hire people who have been out of the workplace for too long, perhaps because their skills have gotten rusty or maybe because they assume someone out of work that long is flat-out unemployable.

Historically, the percentage of long-term unemployed (defined as unemployed for 27 weeks or longer) fluctuates, but has remained well under 25 percent of the total unemployed population. By today's estimates, the long-term unemployed make up about 44 percent of unemployed workers, according to the Bureau of Labor Statistics' December 2010 Employment Situation Summary.

So what's the consequence of these record levels of long-term employment? The United States' government is rethinking how long someone can be considered unemployed and changing the parameters that define long-term unemployment, claims an article in USA Today. The article reports that the new policy has been introduced to address the rising numbers of long-term unemployed but does not revise or extend unemployment pensions to these individuals.

Citing what it calls "an unprecedented rise" in long-term unemployment, the federal Bureau of Labor Statistics (BLS), beginning Saturday [January 1, 2011], will raise from two years to five years the upper limit on how long someone can be listed as having been jobless... The change will not affect how the unemployed are counted or the unemployment rate is computed nor how long those eligible for unemployment benefits receive them. Analysts call the move a sign of the times."

A sign of the times indeed. These days long-term unemployment presents new challenges and added pressures on our government and welfare system. However, this policy change does not mean we are addressing the needs of the long-term unemployed, rather we are simply taking an interest in observing the phenomenon.

Eventually the job market will recover. Unemployment is often one of the last symptoms to recover following any recession. But thankfully, slow recovery is not no recovery.


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