What Is Long-Term Unemployment?

Why 1.5 Million Can't Find Work Even After Looking for 6 Months

An out-of-work manager takes a break from his job search.
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Long-term unemployment increased significantly during the COVID-19 pandemic. As the economy recovers, though still high, long-term unemployment is falling. To be counted as "long-term unemployed" by the Bureau of Labor Statistics (BLS), you must be unemployed for 27 weeks or longer and have actively sought employment during the past four weeks.

To get a better understanding of long-term unemployment, it helps to know what the statistics say and what the causes and effects are.

Current Long-Term Unemployment Rate

In April 2022, the number of long-term unemployed people was 1.5 million, only slightly higher than in March 2022. April's share of long-term unemployed increased 1.3 percentage points month-over-month to account for 25.2% of the total number of unemployed people.

Note

The number and percentage of long-term unemployed have been high in recent months as a result of the COVID-19 pandemic.

The current rate is reminiscent of previous recessions. During the 2008 recession, the record high of nearly 46% occurred during the second quarter of 2010. The February rate, however, is comparable to the darkest days of the 1981 recession. At that point, 26% of the unemployed were out of work for 27 weeks or more compared to February's 26.7%.

The chart below illustrates the divisions among unemployed workers based on the length of unemployment between 2010 and 2022.

Main Causes of Long-Term Unemployment

The two causes of long-term unemployment are cyclical unemployment and structural unemployment. Cyclical unemployment itself is often caused by a recession. Structural unemployment occurs when workers' skills no longer meet the needs of the job market.

A third type of unemployment, "frictional unemployment," refers to temporary unemployment you face during a job search. These are typically short-term situations and aren't included in long-term unemployment discussions.

Note

Long-term cyclical and structural unemployment feed off each other.

A recession causes a massive rise in cyclical unemployment. Those who can't find jobs become long-term unemployed. If out of work long enough, their skills become outdated. In time, this contributes to structural unemployment. They have less money to spend, resulting in reduced consumer demand. It further slows economic growth, leading to more cyclical unemployment.

Main Effects of Long-Term Unemployment

Being unemployed for six months to a year will almost always strain personal finances. A Pew Research study about the Great Recession found that recession affects the long-term unemployed worse than others in the areas of personal relationships, career plans, and self-confidence.

In particular, the long-term unemployed reported the following:

  • More than half, or 56%, saw their income decline, compared with 42% of the short-term unemployed (less than three months) and 26% of those who kept their jobs.
  • Almost half experienced strained family relations. That's compared with 39% of those who weren't unemployed as long. And 43% lost contact with close friends.
  • Nearly 40% lost self-respect. Almost one-quarter sought professional help for depression compared to 10% of the short-term unemployed.
  • For 43%, the recession had a "big impact" on their ability to achieve career goals. That's true for only 28% of their short-term peers.
  • More than 70% say they either changed careers or seriously considered a career change. An additional 29% became underemployed with lower pay and benefits than their previous job.

How Long-Term Unemployment Benefits Extensions Help

Federal unemployment benefits extensions assisted the long-term unemployed in their job search efforts after the Great Recession. Congress approved the extensions in the 2009 American Recovery and Reinvestment Act. They were reauthorized every year until 2013.

The benefits provided the long-term unemployed with up to 99 weeks of unemployment checks. It helped support them until they could find decent jobs. Without the extensions, they would have had to take any job they could, leading to underemployment. This might preclude them from ever catching up as their skills became more outdated.

Unemployment benefits typically only help those who were laid off, though. Some employers fire workers for cause or ask workers to resign in return for a severance package so that they don't have to pay benefits. Workers who quit, part-time workers, the self-employed, and students or mothers just entering the workforce aren't eligible for benefits.

Note

Federal unemployment benefits were extended to the self-employed as part of the pandemic relief efforts. The weekly benefit was also increased, and you could receive unemployment benefits for an extended period depending on your situation. Pandemic-related federal unemployment benefits ended in all states in September 2021.

How To Calculate the Long-Term Unemployment Rate

The long-term unemployment rate is easy to calculate because the BLS breaks down the statistics each month in its Employment Situation Summary. The number of people who have been unemployed for 27 weeks or more is in Table A-12.

The BLS also calculates the percentage they make up of the total unemployed. This table gives you the data for the past five months and year-over-year, seasonally adjusted. It also allows you to compare the last two months and year-over-year, not seasonally adjusted.

Article Sources

  1. U.S. Bureau of Labor Statistics. "Labor Force Statistics from the Current Population Survey."

  2. U.S. Bureau of Labor Statistics. "Employment Situation Summary."

  3. U.S. Bureau of Labor Statistics. "Table A-12. Unemployed Persons by Duration of Unemployment."

  4. Federal Reserve Bank of Richmond. "Potential Causes and Implications of the Rise in Long-Term Unemployment," Page 1.

  5. Congressional Research Service. "Introduction to U.S. Economy: Unemployment," Page 2.

  6. Pew Research Center. "Lost Income, Lost Friends - and Loss of Self-Respect."

  7. National Science Foundation. "Recovery Act."

  8. U.S. Department of Labor. "Additional Unemployment Compensation Benefits During the Great Recession: Recipients and Their Post Claim Outcomes," Page XVII.

  9. Ohio Department of Job and Family Services. "Pandemic Unemployment Program Updates."

  10. California Employment Development Department. "Federal Provisions for Unemployment."