Why Are There Still So Many Long-Term Unemployed Workers?January 22, 2014
The unemployment rate in the US has fallen from 9.1% to 6.7% in three years. In fact, the number of workers who have been out of work for less than five weeks (as a % of the labor force) is at all-time lows (1.46%). This must be a sign of a healthy labor market, right? Well, we aren’t so sure. What concerns us is practically no matter how you slice the data, the number of long-term unemployed workers (defined as out of work for 27 weeks or more) are STILL at record pre-Great Recession levels. Anyone that has taken undergraduate economic courses know there are many negative socioeconomic problems that arise when workers are structurally left out of the labor market (permanently lower future wages, worse mental and physical health, hurts future generations earnings potential, etc). It comes as somewhat surprising to us that there hasn’t been a more focused attempt to get these discouraged workers back to work.