With 4 million Americans long-term unemployed, a cliff threatens
Food loads as drivers queue in their vehicles upon arrival at a “Let’s Feed LA County” grocery distribution hosted by Los Angeles Food Bank on December 4, 2020 in Hacienda Heights, California.
FREDERIC J. BROWN | AFP | Getty Images
Long-term unemployment nears a record as Washington lawmakers pass another pandemic relief package at a cliff for the long-term unemployed.
Long-term unemployment is a period of at least six months without work. It is a particularly risky period of unemployment relative to household finances, say some economists.
According to the Bureau of Labor Statistics, around 4.1 million unemployed Americans were long-term unemployed as of February – an increase from around 3 million people last year.
Those workers made up 41.5% of all unemployed last month, according to the agency, which released its monthly employment report on Friday.
This proportion has grown steadily during the pandemic. It is quickly approaching its historic high after the great recession: 45.5% in April 2010.
American rescue plan
Meanwhile, Democrats in Congress are trying to pass a $ 1.9 trillion covid relief bill and get it to be signed by President Joe Biden by the end of next week.
Millions of the long-term unemployed are ready to lose unemployment benefits after March 14th.
Long-term unemployment is a particularly dangerous period of unemployment, according to labor economists.
For one thing, household income can drop significantly. But the dynamism also makes it harder to find a new job, affects workers’ long-term earnings potential, and increases the likelihood that they will lose a job later (if they find one), say economists.
9.5 million fewer jobs remain than before the pandemic.
“Today’s job report shows that the US economy as a whole is on a positive, albeit slow, recovery path,” said Robard Williams, senior vice president at Moody’s.
The US created 379,000 jobs in February. This is an improvement from 166,000 in January and a decrease from 306,000 in December.
However, the unemployment rate has changed little – 6.2% in February versus 6.3% in January. And unemployment rose for some groups, such as black workers and those without college degrees.
The US is handing out vaccines to fight back the coronavirus, and the Democrats could soon pour $ 1.9 trillion in spending into the economy. However, the pain is likely to persist, at least for a short time, before vaccine adoption becomes widespread and economic activity resumes.
Meanwhile, the prevailing weak growth is problematic for the long-term unemployed, according to economists. It is already harder for such people to find work, and a lukewarm job improvement makes the job all the more difficult.
For example, companies can judge long employment gaps unfavorably. Workers in hotels, restaurants, or other hard-hit industries may not have jobs available. Employers in other industries may not easily hire a candidate with less experience than others.
“The longer they are unemployed, the harder it is to find a new one,” said Williams. “That applies both in this time and in good times.”
Unemployment benefit can provide some income support to qualified people. But they are at the mercy of the federal legislature, which has to pass laws to extend the benefits.
The assistance typically lasts up to six months, although Congress has passed laws twice to extend the duration of the benefits.
“The revenue stream isn’t 100% certain,” said Nick Bunker, director of economic research on Indeed’s Jobs website. “It really depends on what’s going on in Washington and when certain bills are passed.”
In fact, nearly 3 million workers appear to have lost their benefits in the week after Christmas, as a $ 900 billion aid package was passed in December.