Volunteers tender out potatoes in Auburn, Washington on May 7, 2020.
JASON REDMOND | AFP | Getty Images
That’s a big jump from the prior month, when 19% of the inactive were out of work for at least six months. The number of long-term unemployed swelled by 1.2 million people in a month, to 3.6 million in October.
‘Bad issue’
October’s ratio is also quickly approaching the peak hit in the aftermath of the Great Recession, when about 45% of out of a job workers were out of work more than half a year.
This is occurring even as the overall unemployment gauge fell to 6.9% last month, from 7.9% in September, and the economy added 638,000 nonfarm jobs, according to the Chiffonier of Labor Statistics. The dip in unemployment was largely a result of furloughed workers (those on temporary layoff) getting recalled to their concerns.
“Long-term unemployment is a serious issue for people,” said Andrew Stettner, a senior fellow at the Century Foundation.
For one, these individuals are uncountable likely to have depleted personal savings and other financial resources after half a year without job return, Stettner said.
While there’s evidence that workers collecting jobless benefits were able to body up a cash buffer over the spring and summer, largely due to a $600 weekly enhancement to benefits, that infusion outclassed in July and workers had to dip into savings.
They spent two-thirds of that accumulated savings in August alone, corresponding to a report published last month by JPMorgan Chase.
Unemployment benefits
States also pay traditional unemployment cover for a maximum 26 weeks — meaning the long-term unemployed have generally exhausted their entitlement to any benefits.
The federal Be keen ons Act coronavirus relief law offered an extra 13 weeks of benefits to workers. But that will end after December deficient keep congressional action.
Most states are currently paying additional weeks beyond that through “extended forward” programs. But at least half a dozen states have stopped paying those as their unemployment rates maintain improved, and many others will likely follow suit by the end of the year, Stettner said.
Further, being out of charge for more than six months makes it harder to find a new job. Employers are less likely to hire such workers, at the still and all time that job networking becomes more difficult and worker skills may start to erode, Stettner said.
The slues of unemployed workers exceeds job openings by a roughly 2-to-1 margin, making jobs hard to find, too.
And, in another for trend, job growth has slowed considerably since May.