Why Is Long-Term Unemployment Declining?

By
Friday, September 03, 2010 at 4:03 pm

One interesting detail in this morning’s jobs report: The number of workers out of a job for more than six months declined by about 600,000. Moreover, the long-term unemployed made a smaller percentage of the total pool of unemployed workers. The Wall Street Journal reports that this is perhaps a good sign:

There was a slice of good news in today’s jobs report about the state of long-term unemployment in America. The Labor Department reported that the share of workers who were out of a job for six months or longer fell for the third straight month ….

There are many reasons to worry about long-term unemployment. One is the human toll it takes on individuals and families. Another is a problem that economists call hysteresis, which has plagued Europe. This is the theory that the longer a person is out of work, the harder it becomes to get a new job because that person’s skills degrade. Barack Obama’s top economic adviser, Lawrence Summers, was a leading researcher in this area in the 1980s.

Long-term unemployment still has a long way to go before it gets back to normal. Moreover, it’s not clear why long-term unemployment ticked down.

But I am not sure that this is a good thing. The question — and it is impossible to tell from the data — is how many of these workers found new positions and how many simply stopped looking. I fear the number declined more due to the latter than the former.Why? For one, the impact of the lapse of unemployment insurance benefits. (Workers receiving UI need to be looking for a job. For the weeks that hundreds of thousands of workers had their benefits lapse, there was no such requirement. Could that, plus the financial hardship of losing benefits, have pushed workers out of the labor force?) Additionally, the number of workers who want a job but aren’t currently looking for one increased in August — not enough to explain the entire drop, but enough to explain part of it. Moreover, the labor market just hasn’t improved much, and the longer the spell of unemployment, the harder it is to get a job.

Follow Annie Lowrey on Twitter


Comments

40 Comments

Why Is Long-Term Unemployment Declining? North Capitol Street
Pingback posted September 3, 2010 @ 4:21 pm

[...] View full post on The Washington Independent [...]


World Wide News Flash
Trackback posted September 3, 2010 @ 4:28 pm

Why Is Long-Term Unemployment Declining? « The Washington Independent…

I found your entry interesting do I’ve added a Trackback to it on my weblog :)…


REIWired: Advantages of Real Estate Investing Today | REO Blog Site
Pingback posted September 3, 2010 @ 4:34 pm

[...] Why Is Long-Term Unemployment Declining? « The Washington Inde… [...]


World Wide News Flash
Trackback posted September 3, 2010 @ 4:41 pm

Why Is Long-Term Unemployment Declining?…

I found your entry interesting do I’ve added a Trackback to it on my weblog :)…


Endgame - South Capitol Street
Pingback posted September 3, 2010 @ 6:38 pm

[...] — Is long-term unemployment really declining? [...]


Can anyone help me with this EXCEL QUESTION? | credit
Pingback posted September 3, 2010 @ 8:29 pm

[...] Why Is Long-Term Unemployment Declining? « The Washington Independent [...]


JonF311
Comment posted September 3, 2010 @ 10:57 pm

The number of discouraged workers also declined slightly so that suggests these people (overall) were not just dropping out of the workforce.


Many Democrats more anti-Rubio than pro-anyone North Capitol Street
Pingback posted September 4, 2010 @ 1:28 am

[...] Why Is Long-Term Unemployment Declining? « The Washington Independent [...]


Can someone register a state name as a trademark? | lawyer
Pingback posted September 4, 2010 @ 2:34 am

[...] Why Is Long-Term Unemployment Declining? « The Washington Independent [...]


Endgame
Pingback posted September 4, 2010 @ 8:08 am

[...] — Is long-term unemployment really declining? [...]


Cerebral Palsy Among Term and Postterm Births [Original Contribution] | affordable life insurance
Pingback posted September 4, 2010 @ 8:34 am

[...] Why Is Long-Term Unemployment Declining? « The Washington Independent [...]


Why Is Long-Term Unemployment Declining? « The Washington Independent | Jobless Bloggers
Pingback posted September 4, 2010 @ 9:43 am

[...] Continue reading here: Why Is Long-Term Unemployment Declining? « The Washington Independent [...]


Can an disability insurance company stop paying a reciever if the Group leaves this comp but the person is DA? | affordable life insurance
Pingback posted September 4, 2010 @ 11:08 am

[...] Why Is Long-Term Unemployment Declining? « The Washington Independent [...]


Regarding an article by Annie Lowrey « Kevin Bob Riste
Pingback posted September 4, 2010 @ 11:15 am

[...] Regarding an article by Annie Lowrey By kevinbobriste http://washingtonindependent.com/96683/why-is-long-term-unemployment-declining [...]


Need Erros & Ommissions Liability for Insurance Agent? | affordable life insurance
Pingback posted September 4, 2010 @ 11:18 am

[...] Why Is Long-Term Unemployment Declining? « The Washington Independent [...]


how can i sell my insurance investment products in delhi,India,wanted marketing agents..call-9911942265,dipakg | affordable life insurance
Pingback posted September 4, 2010 @ 12:31 pm

[...] Why Is Long-Term Unemployment Declining? « The Washington Independent [...]


How much does it cost to become a foreign exchange student for USA? | Watch Forex Videos
Pingback posted September 4, 2010 @ 3:52 pm

[...] Why Is Long-Term Unemployment Declining? « The Washington Independent [...]


Logistics Consultants | Warehouse Brokerage | Short Term … | personalbankinguk.co.uk
Pingback posted September 4, 2010 @ 4:28 pm

[...] Why Is Long-Term Unemployment Declining? « The Washington Independent [...]


What’s happening at the SSPCA? | Popular bags
Pingback posted September 4, 2010 @ 11:49 pm

[...] Why Is Long-Term Unemployment Declining? « The Washington Independent [...]


Where can I find laptop bags that look like Juicy Couture BUT also fit 17″ screens? I’ve searched EVERyWHERE!? | Popular bags
Pingback posted September 5, 2010 @ 12:21 am

[...] Why Is Long-Term Unemployment Declining? « The Washington Independent [...]


Denver Unemployment Examiner
Comment posted September 6, 2010 @ 4:49 am

As always, thanks for great reporting on the unemployment front…

In my opinion, the decrease in the number of long-term unemployed workers was largely because workers are running out of benefits and are no longer requesting benefit payments) which means they are not counted or included in the unemployment data.

In a recent Denver Business Journal article titled “Fewer remaining on continued jobless benefits” the Colorado Department of Labor & Employment (referring the drop seen in weekly UI claims) was quoted as saying:

“It’s difficult to say what it means,” said Alexandra Hall, chief

economist for the CDLE. “Are they returning to jobs or are they running out of benefits? It’s probably a mix, with more people running out of benefits than returning to jobs.”

http://www.bizjournals.com/denver/stories/2010/08/30/story15.html?b=1283140800%5E3858811&s=industry&i=economic_snapshot

KWiedemer

Denver Unemployment Examiner


Experts speak on Pickens job market, offer advice to unemployed in part two in joblessness series | Uncategorized | Information about Careers
Pingback posted September 7, 2010 @ 5:09 pm

[...] Why Is Long-Term Unemployment Declining? « The Washington Independent [...]


James Lauer faces additional prison term | affordable life insurance
Pingback posted September 7, 2010 @ 9:13 pm

[...] Why Is Long-Term Unemployment Declining? « The Washington Independent [...]


Tips to Pick Penny Stocks - Emini Trading Professor System
Pingback posted September 8, 2010 @ 8:06 am

[...] Why Is Long-Term Unemployment Declining? « The Washington Independent [...]


I’m new to options. Is there a strategy to use options to achieve results similar to buying term life ins? | affordable life insurance
Pingback posted September 8, 2010 @ 11:23 am

[...] Why Is Long-Term Unemployment Declining? « The Washington Independent [...]


How can I find out the rating of HSBC Insurance? | affordable life insurance
Pingback posted September 8, 2010 @ 3:48 pm

[...] Why Is Long-Term Unemployment Declining? « The Washington Independent [...]


33, married, 1 child, high income earner – Variable Life Ins? | affordable life insurance
Pingback posted September 8, 2010 @ 5:50 pm

[...] Why Is Long-Term Unemployment Declining? « The Washington Independent [...]


Lincoln survives; California GOP chooses Whitman, Fiorina | affordable life insurance
Pingback posted September 8, 2010 @ 5:51 pm

[...] Why Is Long-Term Unemployment Declining? « The Washington Independent [...]


Insurance agents and financial advisors;…? | affordable life insurance
Pingback posted September 8, 2010 @ 6:49 pm

[...] Why Is Long-Term Unemployment Declining? « The Washington Independent [...]


State Farm Life Insurance… 30 year term? Whole Life? Select Term? Universal? | affordable life insurance
Pingback posted September 9, 2010 @ 2:07 pm

[...] Why Is Long-Term Unemployment Declining? « The Washington Independent [...]


How much life insurance do i need? I am a 32 year old unmarried man with a 3 year old son.? | affordable life insurance
Pingback posted September 9, 2010 @ 10:02 pm

[...] Why Is Long-Term Unemployment Declining? « The Washington Independent [...]


I’m looking for life insurance, and there are so many options….? | affordable life insurance
Pingback posted September 9, 2010 @ 10:11 pm

[...] Why Is Long-Term Unemployment Declining? « The Washington Independent [...]


Long-term unemployment pushes jobless workers to find new identities | Uncategorized | Information about Careers
Pingback posted September 11, 2010 @ 4:27 am

[...] Why Is Long-Term Unemployment Declining? « The Washington Independent [...]


Social Security and Medicare cards stolen from woman shopping in Long Hill | ach-debit
Pingback posted September 25, 2010 @ 2:41 pm

[...] Why Is Long-Term Unemployment Declining? « The Washington Independent [...]


How long should I hang on to bankstatements for until I shread them? | ach-debit
Pingback posted September 26, 2010 @ 9:34 am

[...] Why Is Long-Term Unemployment Declining? « The Washington Independent [...]


Fantasy Football Advice: Are Your Early Losses Really Longterm Gains? | hand bag shopping
Pingback posted September 30, 2010 @ 7:41 am

[...] Why Is Long-Term Unemployment Declining? « The Washington Independent [...]


Jj
Comment posted September 30, 2010 @ 4:16 pm

They are running out of benefits ! No Brainer


Baumgarte drops appeal of sentence | credit
Pingback posted October 2, 2010 @ 8:07 pm

[...] Why Is Long-Term Unemployment Declining? « The Washington Independent [...]


3. Mum disowns son over debt | credit
Pingback posted October 4, 2010 @ 12:46 am

[...] Why Is Long-Term Unemployment Declining? « The Washington Independent [...]


Why do mortgage rates go UP when Feds cut rates? | credit
Pingback posted October 5, 2010 @ 5:10 am

[...] Why Is Long-Term Unemployment Declining? « The Washington Independent [...]


RSS feed for comments on this post.

Sorry, the comment form is closed at this time.