The real fiscal cliff: The 4.8 million long-term unemployed
Today's alarming financial news is the rise in first-time unemployment claims to 385,000, up 28,000 and also above expectations. It shows the labor market is weakening, not that it was anything resembling strong in the first place. It makes me want to cry, because every piece of news like this makes me even more distraught about the future of the 4.8 million long-term unemployed.
Today's alarming financial news is the rise in first-time unemployment claims to 385,000, up 28,000 and also above expectations. The U.S. Labor Department report shows the labor market is weakening, not that it was anything resembling strong in the first place. It makes me want to cry, because every piece of news like this makes me even more distraught about the future of the 4.8 million long-term unemployed.
I've covered unemployment issues or more than a decade and the future for those who are out of work beyond the normal six months funded by state benefits is very bleak. These aren't lazy bums, but desperate people who are financially and emotionally devastated by their situation.
But, let someone else talk.
This is an excerpt from a report released Wednesday titled: Scarring Effects: Demographics of the Long-Term Unemployed and the Danger of Ignoring the Jobs Deficit. It was produced by the National Employment Law Project, an advocacy group. I recommend reading the entire report, but these particular paragraphs grabbed me:
"This persistently high level of unemployment is the real cliff that threatens our economy.
`Regardless of its root cause, persistent long-term unemployment has troubling long-term consequences for workers and for the economy,' warned the U.S. Congress Joint Economic Committee, `including lost wages, declining labor force participation, less consumption and a smaller tax base.'
Inasmuch as some long-term unemployed are older or disabled workers, they may simply stop trying to participate in the labor force, begin spending down retirement savings and make demands on strained social service programs earlier than they otherwise would.
Young workers who struggle with long-term unemployment suffer from what some call “scarring effects,” including a higher likelihood of experiencing unemployment again later and lower lifetime wages than their consistently employed peers.
The stresses of long-term unemployment have repercussions for workers, their families, and their communities long into the future in the form of increased risks of mental illness and suicide, higher mortality rates, domestic violence, and academic under-performance by their children.
It is astonishing that federal lawmakers so blithely disregard the urgent need for policy responses addressing the 4.8 million long-term unemployed. That is roughly the population of Chicago and Houston, and they have been slowly draining their savings and struggling to keep their families afloat for more than six months, some of them for much more than six months.
It is a testimony to the success of social safety net programs like unemployment insurance and supplemental nutritional assistance that this massive group remains largely invisible to the general public."