A Better Way to Help the Long-Term Unemployed - the Atlantic
Long-term unemployment was a phrase you heard a lot about during the recession. Numerous studies showed that people who were out of work for long periods of time had a hard time finding a new job—and keeping it. And about one-third of those unemployed workers eventually gave up and stopped looking for work, studies suggested.
For all the recent good news about the booming job market and growing wages, there are still people out there desperately looking for work. Nearly three million of them—about one-third of all of the jobless—have been out of work for 27 weeks or longer, according to the Bureau of Labor Statistics. In past recessions, a far smaller share of the jobless had been out of work for so long.
But states grappling with tight budgets have lost their sympathy for the long-term unemployed as the economy turns a corner. In the last two years, seven states have reduced benefits to 20 weeks or fewer—26 weeks of unemployment benefits used to be standard. The share of the unemployed receiving benefits now stands at 27 percent, according to a report from the National Employment Law Project, which is an all-time low.
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There are important economic reasons to help the long-term unemployed get back to work. After 15 months, the long-term unemployed were more than twice as likely to have withdrawn from the labor force than the short-term unemployed, one study showed. In January, 2.2 million people were “marginally attached” to the labor force, which meant they wanted work but had not searched in the past month. Many of the long-term unemployed apply for disability insurance once they run out of benefits, and once they get on the disability rolls, they’re unlikely to work again.
Long-term unemployment can also “have important spillover effects on the community as a whole,” according to a report by the Urban Institute, Consequences of Long-Term Unemployment. Long-term unemployment reduces investments in housing (people who don’t have jobs don’t buy houses), and also induces some people to participate in criminal behavior to earn money, the report indicates. One study showed that workers affected by plant closings have a 14 percentage point higher probability of being arrested, for example.
But few government programs are able to help the long-term unemployed get back to work, said Carl Van Horn, the director of the Heldrich Center for Workforce Development at Rutgers.
In general, workforce programs are designed for people who haven’t been out of work for long. They provide a short burst of cash to tide people over until they can get back to work, or help young people get a degree so they can get a higher-paying job.
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Even though the economy is improving, the country’s programs to assist the unemployed need to be retooled, according to the National Employment Law Project, which this month published a report, The Job Ahead: Advancing Opportunity for Unemployed Workers. It recommends that lawmakers create wage-subsidy programs to help get the unemployed back to work, provide 26 weeks of benefits for jobless workers getting training, and promote work-sharing programs, which would reduce employees’ hours at a given company rather than having mass layoffs.
The basic structure of unemployment agencies should be retooled too, the report says. Many state agencies use technologies that are more than 25 years old, and have backed away from helping job seekers.
“With shrinking resources, many states have moved away from staff-assisted services towards self-service options,” the report says.
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