Long-Term Unemployment - 6/17/14
A recent article by writer Floyd Norris points out that for more than 6 decades, unemployment in the U.S. was primarily a short-term problem. Businesses would routinely layoff staff during slow periods, only to bring them back a few weeks later. While the level of unemployment bounced up and down, most of those that found themselves jobless found work relatively quickly. Few people remained out of work for as long as 15 weeks.
That state of affairs largely characterized America’s labor market from 1948 through 2007. But as the Great Recession took hold, matters changed dramatically – long-term unemployment rose to levels not observed since the Great Recession. By 2009, the number of workers who had been unemployed for at least 15 weeks expanded above that number who had been out of work for a shorter period.
Five years later, there has been a partial return to normalcy. In May, the long-term unemployment rate stood at 3.1 percent, still high by historical standards, but finally below the short-term unemployment rate. Further progress is likely. The Labor Department reported earlier this month that the number of unfilled job openings rose to 4.5 million this spring, the highest number achieved since 2007.