While the Great Recession has officially been over for quite some time, there still are pockets of depressing economic news out there. For example, a recent report from three Princeton University economists spells out the plight of the long-term unemployed.
Led by Alan B. Krueger, the study found that only 11 percent of the long-term unemployed in any given month had found full-time work a year later. The study also examined whether a lack of available jobs or whether discrimination on the part of employers is to blame, concluding that both factors play a role. “The demand-side and supply-side effects of long-term unemployment can be viewed as complementary and reinforcing each other as opposed to competing explanations,” the authors wrote.
In other words, there are no simple solutions. Many a competent worker lost his or her job during the Great Recession through no fault of their own. The economic downturn of the past decade created a numbers crunch that entangled good employees in a cycle that is difficult to escape. As their unemployment drags on, skills erode and employers become more likely to doubt a job candidate’s qualifications.
The problem is vast. The proportion of people who have been out of work for at least 27 weeks — the Bureau of Labor Statistics’ definition of “long-term unemployed” — remains higher than at the peak experienced during the recession of 1983. The number rose by 203,000 in February of this year, climbing to 3.8 million, and it is a situation that will have a lingering impact. In addition to lost earnings that never can be recovered, there is a psychological toll on those who are unable to find work, as well as their families. On top of that, the Princeton study found that 30 percent of the long-term unemployed are 50 or older — compared with 20 percent of the short-term unemployed — and those workers become increasingly unlikely to ever re-enter the workforce as they age.
This latest information comes as Congress is debating ways to assist the long-term unemployed. During the height of the recession, lawmakers extended unemployment benefits from 26 weeks to 99 weeks. But they allowed that provision to sunset at the end of 2013, leaving millions to suddenly go without benefits. The Senate recently voted to reauthorize extended benefits, but the House continues to balk. Speaker John Boehner, R-Ohio, said last week that he opposes the bill, adding that it cannot be implemented because states’ unemployment systems are too antiquated to handle the legislation.
This explanation is unacceptable. If House Republicans believe that extending benefits was the proper move for providing a safety net for those in need and for boosting the economy, they could find a way to make it work rather than blaming unemployment systems. If they believe that the long-term unemployed are not deserving of further government assistance, House Republicans should own it instead of using some convoluted reasoning.
The conservative philosophy is that people should fend for themselves and that the federal government cannot afford to indefinitely provide unemployment benefits. But several studies have shown that such benefits are a boost to the economy because people who have no income have no money to spend, and that the long-term unemployed will be a long-term drag on the economy. Not to mention that it is the right thing to do.
The economy slowly is recovering. Yet the unprecedented situation of the long-term unemployed presents challenges that will linger for generations.