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The Long-Term Unemployment Crisis Is Out of Control

By Amanda Alix - Feb 2, 2014 at 11:53AM

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The unemployment rate may be dropping, but the number of people out of work for longer than 27 weeks is off the charts.

In his recent State of the Union address, President Obama underscored the plight of the long-term unemployed, entreating Congress to renew the now-expired emergency unemployment benefits that expired at the end of December. In addition, he has persuaded 300 large U.S. corporations to sign a pledge stating that they will not discriminate against the long-term unemployed in their hiring practices.

That's swell, but this issue can't be fixed quite so easily and is quickly reaching crisis proportions. As time goes on, the stigma of being without a job for more than 27 weeks is affecting more people, creating a vast pool of former workers that seem to have become "unemployable."

Kiss of death
While it's unclear why people who have experienced unemployment for more than six months have become workplace pariahs, what is clear is that this problem is growing. A recent CareerBuilder study of 300 people unemployed for at least 12 months found that 30% said that they had not had a job interview in that span of time. It's not for lack of trying: 44% said they search for work daily, while 43% look each week.

Of the 10.4 million unemployed people in December, 3.9 million are categorized as long-term unemployed. That's nearly 38% of the total, and 15 states have percentages well above that ratio. Disturbingly, the majority of the long-term jobless come from the wholesale and retail trade -- which, according to the Bureau of Labor Statistics, added an average of 32,000 jobs per month in 2013. By comparison, the expanding health-care sector added a measly 17,000 monthly jobs to the economy last year.

Far-reaching effects
The immediate effects of long-term unemployment are personal, and harsh. Of those responding to the CareerBuilder study, 25% reported not having enough money to buy food, and an equal proportion said their situation has added undue stress to their personal relationships. Ten percent acknowledged losing their home because of their lack of employment.

The long-term unemployed are unable to contribute to the economy, which is undoubtedly slowing the nation's recovery from the Great Recession. For example, the recent expiration of extended jobless benefits -- in which 1.3 million people were dropped from the unemployment rolls -- is said to have already cost state economies $1.76 billion. The horizon looks equally cloudy, as people without income obviously won't be investing for their future, or the future of their children.

What can be done?
Long-term unemployment is a complicated issue and will likely need multiple endeavors to make a dent in the problem. Reviving the emergency benefits program will help in the short term, but more permanent fixes are needed.

In his address to the nation, President Obama spoke about the Joining Forces program, which has prompted companies to train or hire hundreds of thousands of veterans. Additionally, Vice President Joe Biden has been charged with reforming job training programs for young people -- many of whom also number among the long-term unemployed.

A dedicated program in each state just for those who have faced joblessness for six months or more could also provide a boost. Forty-five percent of the respondents in the CareerBuilder survey felt that their job skills needed updating -- particularly technology skills, where 56% admitted feeling rusty.

Most problems respond best when tackled head-on. Why should long-term unemployment be any different?

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