Hope for the Long-Term Unemployed

hope for the long term unemployedIf you’ve been out of work for 6 months or more, and you’ve gotten discouraged by the constant rejections, and have all but given up, take heart: The economy is showing signs of improvement.

First, the overall unemployment rate has been falling of late – from 6.7 to 6.1 percent over the past six months – powered in part by an economy that added some 235,000 jobs in July.

Sure, we’ve seen that before. But for so many years, the long-term unemployed – those who have been unemployed out of the job market for six months or longer – have been locked out of the party! Employers had been snatching up people who recently lost their jobs, rather than giving a shot at people who had been on the sidelines for half a year or longer.

But recent numbers are giving these wallflowers of the labor market some cause for hope: Almost all the decline in unemployment over the last six months has come as a result of increased hiring among the ranks of the long-term unemployed.

Funny how that happened almost as soon as funding for extended unemployment benefits expired. But for those of you who have felt locked out for a long time, this is good news, regardless of the situation. It means that even if you assume the most cynical explanation imaginable, people who have been out of the work force for six months, a year, two years, are having some success getting hired. Employers are picking them up.

According to one Federal Reserve study, about 38 percent of those who were among the ranks of the long-term unemployed a year ago were able to find jobs by today. That’s a big improvement over a couple of years ago, when prospects for those seeking work after six months of employment were absolutely dismal.

The same Fed study linked to above showed a decided uptick in recent months in the likelihood of an individual transitioning from long-term unemployment to employment, and a downtick in the percentage of the long-term unemployed who transitioned from unemployment to non-participation (that is, they had given up looking for work) over the same time period.

Furthermore, the stability of the jobs these people are obtaining seems to be improving, though the stability of that work has a long way to go before it approaches pre-recession levels.

Taking a broader view, the improvement in unemployment numbers seems to have some power behind it. The U.S. economy has been expanding at a robust 4 percent annualized rate over the spring – leading to an increase in labor demand. Some of it may be the release of pent up demand that was temporarily depressed by the harsh winter, but it is welcome news nevertheless.

Bond investors, however, may be getting a little nervous: The recent economic growth spurt and unemployment improvement may give the Fed some more wiggle room to increase interest rates to prevent inflation – which would cause the price of most investment-grade bonds to decline.

Despite the low raw unemployment numbers, a 6.1 percent today is a much more discouraging figure than 6.1 percent was even five years ago. This is because of the steady decline in the labor force participation rate – the percentage of adults actually engaged in the labor force. This rate adds back discouraged workers and the disabled. According to University of Maryland economist Peter Morici, if the labor force participation rate had held steady at the rate it was in 2001, then today’s unemployment rate would look a lot more like 12 percent than 6.1 percent.

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19 Responses to Hope for the Long-Term Unemployed

  1. Robert Firestone says:

    However, those jobs are at the low end of the wage scale A great number of those still unemployed left the workforce at considerably higher wages. So while the number of people unemployed (if you leave out those who have just given up) is improving, the total amount of money being earned is not. The number is good for politicians and the news to talk about, but is not as great for the economy as is being touted.

  2. Marty Nickison II, MBA, MCSE, VCP, CCA says:

    If you have been long-term unemployed; you need to take into account following the model for career success your parents did will not work in 2014. There is a new paradigm that’s at work in the career world today. For this reason, a new model must be used to limit your exposure to long-term unemployment:


  3. Terry Zak says:

    6.7 to 6.1 isn’t much of a change. Thats like saying hey it got cooler outside instead of it being 101 its only 100.

  4. Michael Calma says:

    The economy may be improving, but, as in most recessions, jobs are not coming back as quickly as we unemployed would like. The fact is, when a recession comes along and companies cut jobs they learn to do more work with fewer employees. This “more with less” concept will continue deep into any recovery period as companies will delay the hiring of new workers until it is absolutely necessary to do so. Even then, they tend to start with temps and contract workers limiting their exposure to additional hiring costs that might affect that Almighty Bottom Line. This is why cutting staff is now the first move most companies do to shore up that bottom line when profits slip and investor expectations are not met. All this leads to more people out of work for longer periods of time.

    • Larry Cecil says:


      Your comment is true indeed. I’ve been unemployed since 2009 from my career as a Project Manager. Prior to this time, I returned to school and acquired a BS/BA and MBA. Since I am soon to turn 60 this month (December), I am closer to retirement than I am to gaining employment. I do hope history will record for future generations what corporate CEO’s and Government laws, programs and policies are doing to a generation of workers for the sake of the bottom line, (destroying careers, families and investments into higher education. Like the Great Depression of the 1920’s, we learn it was a created situation by the Rockefeller, J.P. Morgan’s of the world at that time and it is the same today. This impact is an intentional move, and this they call the American Dream.

  5. Lewis Ross says:

    I don’t mean to burst a bubble, but if you read the news, 235,000 jobs were added last month, but there was a loss of 80,000 full time jobs. The increase was 290,000 PART Time jobs (less than 30 hours per week). So if your interested in flipping burgers or selling insurance, you can expect many opportunities to be available with lots of time off. However, if you want to support your family, pay your mortgage, and have an IT career, you can always move to Bejing or Mumbai. Finally, you should be aware that reported unemployment figures DO NOT INCLUDE people unemployed for more than 6 months – so congratulations if that’s you, you’re no longer unemployed – just out of work.

  6. Nestor D. Torres, MBA, C.P.M., A.P.P. says:

    Please consider that unemployment rate does not consider all the people that are not in the workforce and are not eligible for unemployment benefits. So believing in the unemployment rate is believing that the only part of the iceberg is the tip that is seen above the water. There is very little improvement in the job market. Most jobs that have been created are the low paid, part-time jobs. Just my two cents.

  7. Stuart Welter says:

    235,000 jobs in July were all part time. For every 3 full time jobs lost during Obama’s “unemployment recovery” only 1 part time job has been the replacement with the administration’s main-stream media mouthpiece hailing this as success. The workforce participation rate is at a 40 year low–I can’t make this up. The 40 hour workweek is a thing of the past. I’m in month 13 of being unemployed with the most frequent objection being that I’m no longer 40 years old.

    • Eric Nilsson says:

      I agree with Stuart that the job situation is not quite the Eden depicted by some. While I worked 37.5 hours a week (no pay for a half-hour lunch), I see what he means. By the same token, not all is lost (it’s difficult to find, however). This article shows the problems some people have in the Central New Jersey area; some have been out longer than Stuart (I am one, but I am not in the article): http://www.mycentraljersey.com/story/news/local/2014/08/02/new-jerseys-workforce-eager/13470291/.

      Drew, I’ve been keeping track of the BLS numbers since 2008; I also am convinced that these are being “cooked” to make things better than they are. A problem is automation; many jobs done manually (even what were once white-collar positions) are now done by machine. The irony is that many people worked to make live easier; with automation, they had an easier life, but those same people who sought an easier existence have it too easy today, on the outside looking in.

      Another annoyance is being told that something is great or something is awful. The irony of this is those same people who make these rather annoying statements neither gain nor lose from their statements, but those statements do incite people, drawing their attentions and focus from finding a job to siding with one group or another.

  8. Bonnie Rauwerdink says:

    I thought the article sounded pretty positive. You guys have put a different spin on the information.

  9. Julie Scheurer Graff says:

    Great information, and a ray of hope for many job seekers!

  10. J. "J.R." Rossman says:

    Being part of one million U S unemployed, the drop in unemployment is small.

  11. Jack Luke says:

    One must dig below the aggregate numbers of national statistics. I learned this in my freshman year of college in Econ 101. Discouraged workers not counted, the historic low now in labor force participation, part time workers, underemployed — all extremely HIGH numbers. Also, quality of these jobs dubious. I agree with Comments.

  12. David Moen says:

    Maybe, but many of these jobs were part-time and with likely tax increases just around the corner. Many employers need more practical, adaptive and sustainable solutions. I’ve been helping American companies realize these advantages in the Philippines for may years. Where most companies lower costs by about 50 % on average.

  13. Rick Weaver says:

    Thank you for the words of encouragement.

  14. david says:

    We are in the midst of a structural readjustment.Regardless of the variations of the numbers from month to month,bulk manufacturing in creation of jobsshow little sign of returning.One has to look at where the jobs use to come from,and what were the wages.With outsourcing,automation,it is becoming a creative/information economy.Higher skill/higher wages,but rapid change.There maybe many jobs,like others have stated,already,but lower wage.What is needed is systemica,ongoing training,in all areas,to adjust to the new realities

  15. Jamshid Fouladian, MBA says:

    Thanks for the encouragement.
    I live in Canada and we lost 60,000 full time positions last month and 10,000 the month before. A few jobs were created, but they were all part time and for ages18-24. Which basically means summer jobs for students and not well paying jobs requiring Sr. and experienced people. Like any statistical data one needs to look into the details and not the final number. ( taking in account the outliers, seasonal effects, removal of non relevant data points, etc). Hoping that the US job improvement moves up north, the same as the cold weather moves south from here. 😉

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