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News Link • Economy - Economics USA

Jobless Now Entrenched as Slump Drags On


About five million of the jobless are what economists class as "long-term unemployed," people who have been out of work for 27 weeks or more. As challenging as it is for anyone to find a good job in this economy, it can be even harder for people out of work a long time.

Skills atrophy. Demoralization sets in and can become permanent. Some potential employers shy away.

Discouraged, some workers who have spent many months on the sidelines simply fade out of the work force, applying for union pensions or Social Security benefits they didn't intend to take until much later, or trying to get in on other government programs such as Social Security disability benefits.

The probability that a laid-off worker will find a job grows smaller the longer people have been out of work, according to studies in the 1980s by economists Lawrence Katz of Harvard University and Bruce Meyer of the University of Chicago. "Someone unemployed for six months is much less likely to find a job in the next month than someone unemployed for one month," Mr. Katz says.

The problem today: The proportion of the unemployed who have been out of work for over 26 weeks, at one-third, is the highest since World War II.

Mr. Katz, Mr. Meyer and other researchers also have found that wages the laid-off can expect when they do find a new job also tend to be lower the longer they were without work.

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