From Unemployed To Unemployable | WAMU 88.5 - American University Radio

NPR : News

Filed Under:

From Unemployed To Unemployable

The unemployment rate didn't budge in August, according to this morning's jobs report. Net job growth was zero.

Also basically unchanged: The number of people who have been out of work and looking for a job for six months or more.

More than 6 million Americans are now among the long-term unemployed, up from about 1 million before the recession. The long-term unemployment rate is far higher than it's been at any time since before War II.

That's very bad news not just for the unemployed, but for the long-term health of the U.S. economy.

The longer people are unemployed, the less likely they are to find a new job.

This is partly due to the fact that the most employable people — those whose skills are in highest demand — get snapped up right away.

But there are also more insidious forces at work. As Ben Bernanke recently pointed out, the skills of unemployed workers erode, making it harder for them to find a new job. Employers may be wary of hiring someone who has been out of work for a long time. And after months of searching, the unemployed tend to spend less time looking for work.

"After a long period of unemployment, affected workers may become effectively unemployable," economists at the Richmond Fed wrote in a paper published this week.

Over most of the past century, this wasn't much of a problem for the U.S. The typical pattern was for lots of workers to lose jobs during recessions, but to find work after just a few months of unemployment.

That has changed dramatically in the past few years. "Never before in the postwar period have the unemployed been unemployed for so long," the Richmond Fed paper says.

One final, somewhat technical note: The extension of unemployment benefits — which typically expire after six months, but now can run for nearly two years — has probably played some role in driving up the long-term unemployment rate.

But several studies have found that this accounts for only a small part of the overall rise in long-term unemployment. (See this paper from the San Francisco Fed for more on the subject.)

For the most part, "people are simply flowing into unemployment and not finding jobs," Bart Hobijn, an economist at the San Francisco Fed, told me. "That's the overall weakness in the economy."

Copyright 2011 National Public Radio. To see more, visit http://www.npr.org/.

NPR

Box Office Wallows In A Summer Slump, And Some Seek To Find Out Why

Only one movie in July, Transformers: Age of Extinction, has broken the 100 million mark during its opening weekend. Box office receipts all summer have proven anemic. Paul Dergarabedian, a senior media analyst with RENTRAK, talks to Audie Cornish about the box office slump.
NPR

Fast-Food Scandal Revives China's Food Safety Anxieties

An American-owned company that supplies meat to fast-food chains in China has pulled all its products made by a subsidiary. An expose revealed some of the products were mishandled and had expired.
NPR

After 5 Weeks Of Haggling, Congress Inks Bipartisan VA Bill

Congress has reached a bipartisan deal to reform the Department of Veterans Affairs, after nearly two months of tense negotiations.
NPR

It's Boom Times For Pop-Up Shops As Mobile Shopping Clicks

One-click online shopping is changing how we shop. Stores with leases as short as a day are proliferating — meaning a storefront can be a designer clothing store one day and a test kitchen the next.

Leave a Comment

Help keep the conversation civil. Please refer to our Terms of Use and Code of Conduct before posting your comments.