Dean Baker and Kevin Hassett
@ New York Times:
THE American economy is experiencing a crisis in long-term unemployment that has enormous human and economic costs.
In 2007, before the Great Recession, people who were looking for work
for more than six months — the definition of long-term unemployment —
accounted for just 0.8 percent of the labor force. The
recession
has radically changed this picture. In 2010, the long-term unemployed
accounted for 4.2 percent of the work force. That figure would be 50
percent higher if we added the people who gave up looking for work.
Long-term unemployment is experienced disproportionately by the young,
the old, the less educated, and African-American and Latino workers.
While older workers are less likely to be laid off than younger workers,
they are about half as likely to be rehired. One result is that older
workers have seen the largest proportionate increase in unemployment in
this downturn. The number of unemployed people between ages 50 and 65
has more than doubled.
The prospects for the re-employment of older workers deteriorate sharply
the longer they are unemployed. A worker between ages 50 and 61 who has
been unemployed for 17 months has only about a 9 percent chance of
finding a new job in the next three months. A worker who is 62 or older
and in the same situation has only about a 6 percent chance. As
unemployment increases in duration, these slim chances drop steadily.
The result is nothing short of a national emergency. Millions of workers
have been disconnected from the work force, and possibly even from
society. If they are not reconnected, the costs to them and to society
will be grim.
