Tuesday, February 14, 2012

America’s Lingering, Looming Employment Problem

By Howard Rich

Earlier this month the U.S. Bureau of Labor Statistics (BLS) reported that America’s unemployment rate fell from 8.5 percent in December to 8.3 percent in January — its fifth consecutive monthly decline. The agency also estimated that the U.S. economy created nearly a quarter of a million new jobs last month — its highest output since last April.

According to the White House, this data provided “further evidence that the economy is continuing to heal from the worst economic downturn since the Great Depression.”

Is this really the case, though? Scratch the surface of the “good news” touted by these official statistics and you’ll find several troubling indicators — including sharp increases in the number of long-term unemployed and a labor force that’s shrinking to historic new lows.

No wonder most Americans aren’t experiencing the economic “healing” that the White House claims is occurring all around them.

According to the BLS, 43 percent of America’s 12.8 million unemployed workers have been out of a job for more than six months. Two-and-a-half years ago that figure was below 30 percent. Moreover the average unemployment duration now stands at 40 weeks — up precipitously from a then-record high of 25 weeks two-and-a-half years ago.

And with the federal government continuing to fund long-term unemployment benefits in perpetuity, taxpayers are simultaneously subsidizing and incentivizing this sustained joblessness.

“This crisis of long-term joblessness is unprecedented in the post-war period,” The Economist noted last October, adding that “for the first time in decades, jobless workers are more likely to drop out of the (labor) force … than to get a job.”

This grim outlook isn’t likely to improve anytime soon, particularly given the scant availability of construction work associated with America’s still-reeling housing market.
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