It’s Called a Safety Net for a Reason

In May, 431,000 new jobs were added to the economy.  On the surface, this seems like good news.  However, 411,000 of those jobs were temporary Census workers.  Private employers added 41,000 new jobs to the economy.  These numbers are just the tip of the iceberg in a changed employment landscape.

Although no one would argue the point that those of us who are eagerly pursuing employment should be able eventually to find work, statistics demonstrate that long-term unemployment remains high. In May, 6.8 million people had been unemployed for 27 weeks or more.  That number represents 46%, or nearly half, of all unemployed people, a number that is nearly double the highest point in the last 60 years.  “Of the 15 million unemployed in America, over 7 million have been out of work for more than six months, nearly 5 million for a year and over 1 million for two years — the worst statistics since the government started keeping count in 1948. The proportion of the unemployed out of work for more than six months has doubled in the past year, to more than 46 percent. The jobseekers-to-jobs ratio, which tells how hard positions are to get, remains around 5.6 to 1.” 

Some economists hypothesize that the continuing long-term unemployment numbers reflect a changed employment situation.  For example, the nature of the jobs lost during the downturn differs from the nature of the jobs being “replaced.” The number of middle-class jobs is growing at a slower rate than jobs at the lower end of the pay scale.  Furthermore, due to population increases, a one-to-one jobs replacement rate, which hasn’t been achieved yet, would still not return employment rates to pre-downturn levels.  There are other factors that directly affect the ability of the long-term unemployed to return to work, including: questions about employment gaps, loss of motivation and self-esteem, changes in job requirements, and economic straits that leave them unable to relocate to pursue work. 

The persistence and increase in long-term unemployment rates argues for particular consideration in recovery plans.  As a problem with specific causes and challenges, it will be necessary to consider specific redress to avoid “leaving behind” a substantial number of the unemployed in our recovery.  If, as some have speculated, the nature of the jobs that are available has changed, then we must invest in changing the workforce as well.  Specific retraining programs tailored to the needs of the long-term unemployed, incentives to induce employers to consider hiring those who have been out of work for more than six months, or relocation assistance could aid the long-term unemployed.

Frustrated empathy is not a sufficient response to a situation that for many is becoming desperate.  We must explore creative policy solutions to provide relief for those who are struggling to regain their ability to provide for themselves and their families.  Specifically, job creation proposals must include solutions tailored to unemployed people who have been out of work for six months or more.

Read more at The Opportunity Agenda website.

Tags: jobs, unemployment, Opportunity, Economy (all tags)

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