Long-Term Unemployed Are Largely Ignored in a Recovering Economy

Job seekers wait to enter a job fair hosted by the state of New York at the Shirley A. Chisholm State Office Building April 12, 2012, in Brooklyn.  
Justin Sullivan/Getty Images

Is it a recovering economy or not? That’s one of the great, persistent mysteries stumping modern economists and pundits. Most obviously don’t think so—a recent Politico poll tells the story of a national mood in perpetual funk. The answer is not that simple, and it’s hidden in pockets of partisan quackery obfuscating a solution.

Each month may reveal a gradually dipping unemployment rate, suggesting that it’s all good. The rate dropped steadily from 9.2 percent in September 2011 to 5.9 percent this last month. But if you’re African American, it’s still not meaning much when community joblessness is stubbornly stuck at 11 percent—compared with 5.8 and 7.8 percent, respectively, for your white and Latino peers.


The Take turned to several leading economists to sort it out. NAACP Economic Director Dedrick Muhammad, ShadowStats.com’s John Williams, Brookings’ Gary Burtless and the Center for American Progress’ Michael Madowitz all put their fingers on the pulse of it.

Dedrick Muhammad (@DedrickM): African Americans have over twice the unemployment level of white Americans, and African-American unemployment, currently at 11 percent, is higher than the worst of the national unemployment rate during the Great Recession (10 percent). A 20 percent child poverty rate in the richest country in the world is an abomination, and a 30 percent poverty rate for Latino children and 38 percent for African Americans is totally unacceptable.

Gary Burtless (@GBurtless): Long-term unemployment remains heartbreakingly high for a simple reason: The economic downturn between 2008 and late 2009 was exceptionally severe, and the rate of job creation since then has been slow in light of the massive job loss that occurred between early 2008 and late 2009.

John Williams (@ShadowStats): Yes, the government removes long-term unemployed who have given up looking for work, also known as “discouraged workers,” from the headline unemployment number. The effect is that the headline unemployment rate drops, while the broadest unemployment measure, including all of the long-term discouraged workers, has increased and remains close to a post-Great Depression high.


Michael Madowitz (@mikemadowitz): People seem to have short memories when it comes to the labor market. We know underemployment and broader measures of unemployment are at unhealthy levels. The real question isn’t whether people have given up because the labor market is bad—we know they have. The question is whether they are on the sidelines till things improve or whether they are off the grid for good—forced into early retirement, working in the underground cash economy or not working for other reasons.

DM: Underemployment continues to be an issue largely ignored. This number also tends to run about twice the official unemployment rate, but it is not delineated by race. Were we to do so, and we assume the “Black U-6” was twice the black unemployment rate, which seems reasonable, it would be between 20 and 25 percent of black workers who are either unemployed or underemployed.


JW: Long-term benefits are needed because the economy generally has not recovered, and job prospects remain bleak in the real world both now and in the near future. In theory, the government remains constrained by budget issues, but underemployment certainly should be a top priority.

Fundamentally, action is needed to boost the economy and to create jobs, but there are few easy approaches to that at present. For example, areas such as trade policy and other elements driving domestic businesses and employment offshore need to be addressed in order to help bring back higher-paying production jobs into the U.S. That, however, runs counter to special interests pandered to on both sides of the political aisle.


GB: Many employers prefer to hire job applicants who are already employed, have just graduated from school or who have not been unemployed very long. This adds to the woes of unemployed workers who have been jobless longer than six or eight months. Many of them would start looking again and would be willing to accept a job if a) the job offered a decent wage, b) the job was connected to their occupational skills and offered at least a modest chance of advancement, and c) the search for a job were easier than the unsuccessful search they vividly remember from 2009 or 2010.

Congress allowed the Emergency Unemployment [Compensation] program to end way too early. By dropping these long-term unemployed from the rolls, we cut their families’ spending power and consumption, and we slowed both consumption and economic growth in 2014.


MM: All rates have dropped a lot, but we had a huge hole to dig out of, so we’re still well above what feels like a normal economy. The official rate has dropped the fastest, which you expect because there are so many ways to stop being counted in the official rate, and it’s within spitting distance of normal. But if you look at pretty much any other measure, you still see a labor market that is really struggling by historical standards.

Charles D. Ellison is a veteran political strategist and a contributing editor at The Root. He is also Washington correspondent for the Philadelphia Tribune, a frequent contributor to The Hill, the weekly Washington insider for WDAS-FM in Philadelphia and host of The Ellison Report, a weekly public-affairs magazine broadcast and podcast on WEAA 88.9 FM Baltimore. Follow him on Twitter.

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