A Closer Look at the Unemployment Numbers

Dec 02, 2011

By Jenice R. Robinson

Unemployment inched down to 8.6 percent in November and employers added 120,000 jobs. This news demonstrates some progress, but a deeper look at trends reveals the nation has yet to reach a critical turning point in the jobs crisis.

Persistently high unemployment

For 34 months (since March 2009) unemployment has remained above 8 percent, a period that months ago shattered other records. It is, in fact, the longest period of time that unemployment has remained above 8 percent since the Bureau of Labor Statistics began keeping track. The previous record duration was a generation ago during the early 1980s recession when unemployment remained above 8 percent for 27 months.

Jobs growth is welcome news, but there is still a long way to go before the economy recovers the roughly 6.5 million fewer jobs today than there were before the recession began. At the rate of 120,000 jobs per month, economists estimate it will be a decade or more before the economy adds enough jobs to move unemployment to pre-recession levels and keep up with the pace of people entering the workforce.

Racial and ethnic disparities

Although the overall unemployment rate dipped 0.4 percentage points to 8.6 percent, not all groups experienced a decline. The rate increased by 0.4 percent to 15.5 percent for blacks, more than double the 7.3 percent rate for whites. For Hispanics, unemployment remained the same but at 11.4 percent is still 4.1 percentage points higher than the average for whites.

The unemployment rate for black men is 16.5 percent, more than twice the 7.6 percent rate for white men. And for black women, the 12.9 percent rate is nearly double the 6.9 percent unemployment rate for white women.

Long-term unemployment

Long-term unemployment remains problematic, with 43 percent of unemployed workers out of a job for six months or more. To put this in proper perspective it's important to examine historical trends. Before the recent recession, the previous high for long-term unemployment was 26 percent of all unemployed workers in June 1983. In April 2009, long-term unemployment climbed to 27 percent and continually grew, reaching a high of 45.5 percent of the jobless population in March of this year. For 31 months, long-term unemployment has remained at record levels.

Long-term unemployment has negative implications for workers and their families. The longer a worker is unemployed, the more difficult it becomes to find a job. Prolonged unemployment negatively affects adults' future earning potential. And children in households with an unemployed parent experience negative long-term outcomes in the areas of education, income and employment.

Policy Solutions

Given that long-term unemployment remains at unprecedented highs, policymakers should swiftly extend federal unemployment insurance benefits for another year. Currently, federal benefits are set to expire Dec. 31. If this happens, nearly 2 million workers and their families will lose their unemployment benefits in early 2012. At a time when so many families are already struggling to make ends meet, policymakers should make sure the vital lifeline of unemployment insurance benefits remains intact.

Further, policymakers must focus on jobs creation. Recently, Rep. George Miller and Sen. Richard Blumenthal introduced the Pathways Back to Work Act, a bill that, among other things, targets low-income and low-skill workers. Because the least-skilled workers and minorities have been most adversely affected by the unemployment crisis, job creation strategies should target those individuals.The Pathways bill is a good start for getting people back to work.   

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