The Perils of Long Term Unemployment

By: Nick Anderson

When conducting their searches for potential new workers, employers look more favorably on recently unemployed, and currently employed workers compared to workers that have been out of work for longer periods.[1] Currently, the average duration of unemployment is nine months, which is an unprecedented high.[2] Although recent economic down turns such as the one we are presently mired in have seen unemployment peak at higher levels, the duration of unemployment was considerably less. This presents enormous challenges for long-term unemployed searching for work. Moreover, the United States has the highest long-term unemployment (being greater than twelve months of unemployment) figures among the OECD countries.[3]

Those that are unemployed for longer periods of time are seen as less desirable because they are perceived to have lost valuable skills. Because certain industries are constantly changing in terms of the equipment or technologies they use, some job seekers are even more disadvantaged than others whose job requires skills that do not change as often (such as a plumber). Compounding the problem is that unlike a depreciated or obsolete product that might be able to lure a potential consumer with lower prices, American workers seldom have an opportunity to “sell” themselves in the hiring process, and therefore are unable to undersell the competition.[4] Adding to this concern is the idea that many of those applicants that have been unemployed for a considerable amount of time might be ultimately labeled “unemployable.”[5]

As of October 7, 2011, 44.6 percent of the total number of unemployed workers in the United States are considered “long-term” unemployed, which means that they have been out of work for greater than twenty-seven weeks.[6] According to the Federal Reserve Bank of Philadelphia, unemployment is unlikely to return to lower than seven percent before 2015.[7] Unfortunately, the outlook for these workers is anything but positive.


[1] R.A., Long-term unemployment is a sticky situation, The Economist (Jul 26th 2011, 20:49), http://www.economist.com/blogs/freeexchange/2011/07/labour-markets.

[2] R.A., supra note 1.

[3] Long-term unemployment, The Economist, Sep 17th 2011, available at http://www.economist.com/node/21529096.

[4] R.A., supra note 1.

[6] News Release, Bureau of Labor Statistics, The Employment Situation September 2011 (October 7, 2011), available at http://www.bls.gov/news.release/empsit.nr0.htm.

[7] David Leonhardt, The Depression: If Only Things Were That Good, N.Y. Times, Oct. 9, 2011 at SR1, available at http://www.nytimes.com/2011/10/09/sunday-review/the-depression-if-only-things-were-that-good.html?scp=10&sq=long%20term%20unemployment&st=cse.

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