It may be time to adjust the U.S. unemployment rate in another way besides the traditional seasonal adjustments.
A study published by the Brookings Institute argues that a significant portion of the unemployed — those who have been out of work for more than six months — won't work again.
The study comes from Princeton University authors Alan Krueger, Judd Kramer and David Cho. (Krueger served as President Obama's chief economic advisor.) It's key finding: just 11 percent of those who have been out of work for more than six months since the last recession have found work.
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This dismal success rate, the authors say, is high compared to other groups of long-term unemployed in earlier post-recession periods.
With economists already having created a category for those "no longer looking for work," this new group of workers existing on the margins of the economy represents yet another segment of the population that may never participate again in the workforce.
"Despite declining over the last four years, the share of the unemployed who have been out of work for more than six months still exceeds its previous peak, reached in 1981-82, and is well above its average in the last recovery," Brookings says in its summary of the study.
"Yet, measures of short-term unemployment are close to their average rates in the last recovery. As a result, overall unemployment remains elevated because of the large number of people who have been unemployed long term."
Of this group, 36 percent were last employed in "sales and service jobs" and 28 percent in blue-collar jobs.
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Dan Cook
Dan Cook is a journalist and communications consultant based in Portland, OR. During his journalism career he has been a reporter and editor for a variety of media companies, including American Lawyer Media, BusinessWeek, Newhouse Newspapers, Knight-Ridder, Time Inc., and Reuters. He specializes in health care and insurance related coverage for BenefitsPRO.
