Unemployment: More Than 3 Million Americans Jobless For Longer Than A Year, An All-Time High (CHARTS)
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More than three million Americans have been out of work for at least a year, according to a new analysis of unemployment data.
That represents 23 percent of the roughly 14.8 million Americans out of work and looking for a job -- a post-World War II high. For those 3.4 million Americans, the consequences from such a long time out of work -- a cost of the Great Recession -- can be calamitous.
"[T]he likelihood of finding a job declines as the length of unemployment increases," notes the team led by Ingrid Schroeder, director of the Pew Fiscal Analysis Initiative, a program of the Pew Economic Policy Group and the Pew Charitable Trusts. "People who are unemployed for a long time can lose their job skills. A long unemployment spell can mark them as undesirable, making it more difficult to compete against other job candidates. [Federal] data suggests that workers who are jobless for the longest duration incur the largest reductions in weekly earnings upon returning to work."
To help them cope, Congress has extended unemployment benefits. In some states, the unemployed can claim benefits for up to 99 weeks.
But that comes with a cost.
According to Schroeder's team, the federal government could spend up to $168 billion this fiscal year on unemployment benefits, a five-fold increase from each of the years immediately preceding the recession, which officially began in December 2007.
That's equal to the combined proposed fiscal year 2010 budgets for the Departments of Agriculture, Commerce, Energy, Homeland Security, Interior, Justice, Labor, and the Environmental Protection Agency.
"To help the millions of people who are stuck on the unemployment rolls, Congress has approved extending unemployment benefits beyond the normal 26-week limit," the Pew report notes. "Those extensions cost nearly $44 billion in fiscal year 2009 alone."
That increased federal spending, though, does provide immediate benefits to the economy. For every additional $1 spent on extending unemployment insurance benefits, the economy gets $1.61 in return through people using their benefits to pay for consumer goods and housing costs, among other things, notes Mark Zandi, chief economist for Moody's Economy.com.
The federal government has also increased its spending on food assistance and health care coverage for the unemployed. All told, taxpayers could spend about $258 billion this year alone, up from about $190 billion last year, to help the most vulnerable deal with the effects of the worst economic downturn since the Great Depression -- a crisis caused in part by a reckless financial industry and its lax overseers in the federal government.
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PEW-Unemployment Final
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First Posted: 06/06/10 06:12 AM ET Updated: 05/25/11 05:05 PM ET