649,000: The number of Americans who have been unemployed for at least three years.
When economists talk about the long-term unemployed, they are usually referring to people who’ve been out of work for more than six months, or perhaps more than a year. By those standards, the unprecedented epidemic of long-term unemployment in the U. S. is at last showing tentative signs of easing. The number of Americans who have been unemployed for 27 weeks or longer fell to 4.8 million in December, down from 5.6 million a year ago, though it remains exceptionally high by historical standards. The totals for people out of work for one or even two years have shown similar declines.
But for the longest of the long-term unemployed, the news is far grimmer. There are 649,000 Americans who have been looking for work for three years or more, essentially unchanged from a year ago. 213,000 of them have been out for at least four years — a number that’s actually ticked up slightly in the past year — and 85,000 have been unemployed for at least five years, meaning they lost their jobs in the first months of the recession and haven’t worked since.
The numbers are far from precise. Like all unemployment figures, the data on unemployment duration are based on a monthly survey of about 60,000 American households. Respondents are asked how long it’s been since they last worked — someone who says he’s been out of work for three years will be marked down as unemployed for 156 weeks, even if the real figure is 150 or 165. Until 2010, the Labor Department didn’t even collect statistics on durations beyond two years.
Still, it’s clear from the data that there is a major break around the three-year mark. For job seekers below that threshold, the recent improvement in the job market appears to be having an effect; the ranks of such moderately-long-term unemployed have actually been thinning faster than the ranks of shorter-term job seekers. But beyond three years, the broader labor market gains don’t appear to be taking hold.
That won’t surprise economists, who long ago noticed that the longer workers remain unemployed, the less likely they are to find jobs. It isn’t entirely clear whether that’s because more employable workers tend to find jobs more quickly — leaving only less qualified people behind to become truly long-term unemployed — or whether long spells of unemployment actually make workers less likely to get hired, perhaps because their skills erode or because the workers are somehow stigmatized. The latter possibility is especially worrisome to economists because it suggests that a severe cyclical downturn can morph into a long-term structural problem, as once-productive workers fall permanently out of the work force — an idea economists refer to as “hysteresis.”
The 649,000 figure almost certainly fails to capture the full scope of the problem. Official unemployment statistics leave out millions of displaced workers who have given up looking for jobs because they didn’t think they could find them. Some are simply waiting for the labor market to turn around and resume their search; others have gone on disability insurance or retired early, leaving the workforce behind for good. The Labor Department doesn’t collect data on how long such people have been out of work, but it’s a safe bet that many are effectively long-term unemployed.
What may be more surprising than the number of people who have dropped out of the labor force, however, is the number that have stayed in. To count this “unemployed” the official Labor Department statistics, a person must want to work, be available to work and have actively searched for work in the past four weeks. That hundreds of thousands of people still meet those requirements after years of searching — and months or even years after cashing their final unemployment check — is in some sense a sign of confidence that better times still lie ahead.
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