October 7, 2011 in Business

Joblessness spirals

Employment is becoming a dim memory for millions of people
Associated Press
 
Associated Press photo

Snotti St. Cyr, center, looks over a brochure while attending a job fair at a Goodwill store in Atlanta. The number of people who applied for unemployment benefits rose slightly last week, a sign that the job market remains weak.
(Full-size photo)

WASHINGTON – For more Americans, being out of work has become a semi-permanent condition.

Nearly one-third of the unemployed – nearly 4.5 million people – have had no job for a year or more. That’s a record high. Many are older workers who have found it especially hard to find jobs.

And economists say their prospects won’t brighten much even after the economy starts to strengthen and hiring picks up. Even if they can find a job, it will likely pay far less than their old ones did.

The outlook is unlikely to improve today, when the government issues its monthly jobs report. Economists predict it will show that employers added a net 56,000 jobs in September.

That’s far fewer than needed to reduce unemployment. The unemployment rate is expected to remain 9.1 percent for a third straight month.

Federal Reserve Chairman Ben Bernanke last week called long-term unemployment a “national crisis” and said it should be one of Congress’ top priorities.

When people are out of work for a year or more, their skills often decline. Their professional networks shrink. Companies hesitate to hire them. The problem feeds on itself.

“It’s a serious threat,” said Mark Zandi, chief economist at Moody’s Analytics. “A growing proportion of the labor force is becoming disenfranchised.”

Long-term unemployment sets this recession and weak recovery apart from any other period since the Great Depression. Though the economy has endured “jobless recoveries” before, in no previous recovery has such a high proportion of the unemployed been out of work this long.

Labor Department figures show that for roughly the past year and a half, one in three of the unemployed have been without a job for at least a year. That’s more than double the previous peak after the 1981-’82 recession.

Businesses would have to start hiring much faster before a larger proportion of the long-term unemployed would find work. Many employers see them as riskier than other potential hires. Some might need additional training. Companies aren’t likely to take such risks until the economy shows consistent strength.

Brian Wedding, a roofing contractor based in Baton Rouge, La., acknowledges that he spends more time evaluating job applicants who have been unemployed for long periods.

“A flag’s going to come up, for sure,” said Wedding, CEO of Jasper Contractors, which employs about 800 at nine locations nationwide. “We’ll have to dig a little deeper into what’s going on.”

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