State governments provide initial unemployment benefits with funding from employers who pay unemployment taxes. Unemployment benefits at the state level provide 26 weeks or approximately six months of income for unemployed workers. The Congressional Budget Office study on long-term unemployment considers individuals unemployed for more than 26 weeks. The Brookings Institution reports that half of all unemployed workers in October 2010 had been unemployed for more than 21 weeks. Whatever week you are on, unemployment lasts longer for workers during the economic downturn of 2009, 2010 and 2011.
Length of Unemployment
Long-term unemployed relates to the length of time the job seeker has been out of work. Brookings points out that fall 2010 figures show about 25 percent of unemployed workers have been unemployed for a year, and 10 percent unemployed for two years. Some unemployed individuals have dropped out of the calculations by starting a home business or accepting a minimum wage job. The change from state benefits through 26 weeks to federal extended benefits after that time creates a logical break between unemployment and long-term unemployment.
The federal government offers extended benefits for unemployment to workers who are long-term unemployed, or who have received 26 weeks of state benefits. The federal government extended benefits in tiers, or additional weeks, for qualifying job seekers. Some job seekers have completed four tiers of extended benefits and reached 99 weeks of total benefits. Some continue to be unemployed, but without benefits.
Calling this "chronic joblessness" and the long-term unemployed "the new poor," The New York Times reports that some long-term unemployed look to religion for the only health insurance they can afford. These workers lose their job skills and networking opportunities; they become discouraged, Brookings reports. Brookings refers to a reduction in life expectancy and long-term effects on the children of these workers. The children earn less as they enter the work force. The longer a person is unemployed, the less likely he is to find a new job, particularly at the previous rate of pay.
The Bureau of Labor Statistics changed the way it calculates long-term unemployment at the end of 2010, according to an article in USA Today. The BLS raised the upper limit for how long someone is considered jobless from two years to five years. This allows economists to follow the long-term unemployment figures. This change does not affect how states count unemployment benefits but allows closer calculations for economic studies. Where 99 weeks was the cap previously, this move allows a new indicator for 260 weeks of unemployment. Benefits are not increased, but trends may be easier to follow.
- USA Today; U.S. Changes How It Measures Long-term Unemployment; Rick Hampson; December 2010
- The New York Times; Despite Signs of Recovery, Chronic Joblessness Rises; Peter S. Goodman; February 2010
- Congressional Budget Office; Long Term Unemployment; October 2007
- Brookings Institution; The Great Recession's Toll on Long-Term Unemployment; Michael Greenstone, et al.; November 2010
- Photo Credit Jupiterimages/Brand X Pictures/Getty Images
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