Long-term unemployment growing despite economic recovery

During the severe recession of the early 1980s, the percentage of workers unemployed for six months or longer peaked at 26 percent in 1983.

The nation’s jobless rate has remained above 9 percent for the past 20 months. The federal government has continued to provide federal emergency and extended benefits beyond the 26-week limit offered by states, which the Congressional Budget Office says will cost $129 billion this year. 

Lawmakers have battled over continued extensions of unemployment benefits with Republicans who insist the program be paid for. Democrats, meanwhile, argue that providing jobless insurance should be considered emergency spending. 

The federal government has also increased food assistance and has paid for a greater share of healthcare coverage for those who have been without work for a long time.

The effects of unemployment also reduce federal revenue and potentially lower productivity. 

In the current fiscal year, federal spending on unemployment benefits is projected to be five times greater than it was in each of the years immediately preceding the recession. Between 2005 and 2007, when the unemployment rate hovered around 5 percent, federal spending on unemployment insurance ranged between $31 billion and $33 billion, the report said. 

Although many businesses are saying they intend to pick up hiring during the next six months, job creation is still expected to be slow, with the unemployment rate likely to remain at or above 9 percent through this year. 

The jobless rate isn’t expected to decline back down to 5 percent until 2016, according to analysts. 

While long-term unemployment is occurring across education and age groups, those who are older than 55 are most likely to remain jobless for a year or more. 

Additionally, a high level of education provides only limited protection against long-term unemployment, with similar rates across degree attainment: Thirty-one percent of unemployed workers with a bachelor’s degree have been out of work for a year or more, compared with 36 percent of high school graduates and 33 percent of high school drop-outs.