Although the U.S. labor market has seen some improvement, it is not enough to significantly help the long-term unemployed and individuals who have exhausted their unemployment benefits, say economists and labor experts. We take a closer look at this issue in part one of our latest look at the nation's unemployment crisis. Check back with Progress Illinois later this week for a look at how the sequester cuts have only added to the woes of the long-term unemployed.
Although the U.S. labor market has seen some improvement, such as adding 165,000 jobs to the economy in April, it is not enough to significantly help the long-term unemployed and individuals who have exhausted their unemployment benefits, say economists and labor experts.
In April, the U.S. unemployment rate was 7.5 percent, which is a four-year low, according to the Labor Department.
During the same month, the long-term unemployed, or those that have been jobless for 27 weeks or more, made up more than 37 percent of the overall unemployed workers in the U.S., reading a total of 4.4 million.
Although the number of long-term jobless Americans decreased by 687,000 over the past 12 months, they have made up about 30 percent to 40 percent of the pool of unemployed workers since the Great Recession began, said Janelle Jones, a research associate at the Washington, D.C.-based Center for Economic and Policy Research.
It is not clear how many people in Illinois are currently considered long-term unemployed, as monthly figures calculated on the national level are not available or computed for an individual state, said Greg Rivara, spokesman for the Illinois Department of Employment Security (IDES).
Jones called the national long-term unemployment numbers “incredibly troubling.” She noted that many people are not talking about the current state of those who have been out of work for months — or even years.
“We’re just letting economic resources in the form of human talent kind of just wither,” she said. “We’re seeing that there’s a lot of discrimination against people, so the longer you are unemployed, the harder it is to get another job, and as you’re waiting, your skills are deteriorating, [and] the labor market moves along without you.”
The long-term unemployed who have exhausted their benefits are often referred to as the "99ers."
The maximum time limit of state and federal unemployment benefits was 99 weeks before the law was changed last year. In response to the Great Recession, unemployed individuals were first able to collect up to 99 weeks of benefits in November 2009.
But as part of Congress’ efforts to restructure unemployment benefits, the maximum weeks shrunk to 73 in February 2012.
Unemployment insurance in Illinois is currently separated into regular benefits, which are paid for by businesses through a payroll tax, and benefits paid for by the federal government, which are often referred to as emergency unemployment compensation.
In Illinois, state benefits last 25 weeks for claims initiated in 2012 and beyond, Rivara said. Illinois offers up to 45 weeks of emergency unemployment compensation, allowing Illinoisans to collect up to 70 weeks of benefits.
The federal emergency unemployment compensation program is set to expire at the end of this year and will need to be reauthorized.
“I think it would have been better for unemployed workers and for the economy if we had not scaled back the benefits in 2012,” said Chad Stone, chief economist at the Center on Budget and Policy Priorities. “But was that the price of getting enough votes to reauthorize the program at all? Probably yes, and therefore it’s that kind of trade off.”
He called it a “mistake” to cut back on the maximum number of weeks to receive benefits. And, he added, it will also be a mistake to let the program expire at the end of this year, as it is scheduled to do, because unemployment remains quite high.
“Projections are, we’re not going to see much improvement in the unemployment rate in the rest of this year, and it may even drift up as a result of sequestration and other things slowing the economy,” Stone said.
Unless the unemployment rate falls below 7 percent, there is a strong argument for continuing the federal unemployment insurance program, he noted, but “I don’t know if that will happen.”
Come November and December, there will be discussions in Congress about extending the program, but that is if there have not been more comprehensive budget discussions in the meantime, explained Stone.
Counting the long-term unemployed
In April, Illinois’ unemployment rate was 9.3 percent, which was higher than the national average. Illinois' unemployment rate ticked down from 9.5 percent in March.
There were 611,000 unemployed individuals in the state in April, according to IDES.
Historically, the national unemployment rate is lower than the state rate, Rivara explained. And Illinois’ rate has been lower than the national rate just six times since January 2000, including during times of expansion and contraction, he pointed out.
But national and local data regarding what happens to people who have exhausted their maximum time limit on state and federal unemployment benefits is hard to come by.
Rivara said IDES does not have a relevant number of how many Illinoisans exhaust their benefits per week.
People are counted as unemployed in monthly employment-rate data surveys by the U.S. Bureau of Labor Statistics if they are without a job, but have looked for work in the last four weeks.
What is not asked, Stone said, is whether or not an unemployed individual is receiving, or has received, unemployment insurance benefits. Those counted in the employment rate surveys each month may have exhausted their benefits, may be collecting benefits or were never eligible for benefits in the first place, he explained.
Also, some people who have not looked for work in the last four weeks but would like to have a job are not counted as officially unemployed, he said.
Essentially, the long-term unemployed who have stopped looking for work are not considered part of the labor force, Jones said.
“I think it’s fair to say, in these kind of economic conditions, there are a lot of people who are not in the labor force simply because they’ve given up looking, and so they’re not being captured in the long-term unemployed numbers,” she said. “I’m sure if the economy was better, they’d be looking for work and be counted among the unemployed, but instead they’re being listed as not in the labor force.”
Cheri Honkala with the Poor People’s Economic Human Rights Campaign said the true number of the "99ers" and others who are long-term unemployed should really be at least double that of what the Labor Department reported in April.
“So many people have stopped looking [for work] for such a long time now and have had to make themselves a part of the underground economy,” she said.
Mitchell Hirsch, an unemployed worker advocate with the National Employment Law Project, helps run UnemployedWorkers.org, a grassroots online campaign and information portal that serves and informs jobless workers.
Hirsch said unemployed workers often share on the website the difficulties they have faced while searching for employment.
“In many cases, we’re hearing a lot of frustration with this wall of discrimination in the job market where employers and recruiters, and even temp staffing firms, [are] not wanting to consider people who are currently unemployed or who have been out of work for six months or more,” he said.
Those who have been out of work are also more likely to be looking for a job even after all their unemployment benefits are exhausted, he said.
But even people who received these benefits frequently fall behind on bills, and their credit suffers as a result, Hirsch explained.
“That’s another barrier that people may not even be aware of in the job market, because a lot of employers use credit histories for pre-employment screening, and even though they are supposed to tell an applicant if they’ve been rejected because of a credit report, that rarely actually happens,” he said.
As a result of these screenings, some people cannot get past even the first set of hurdles to be considered for a job, regardless of their years of experience and depth of qualifications.
“It creates a real kind of a crisis and jobs are not being created fast enough for employers to fulfill these jobs from the pool of unemployed workers,” he noted. “They’d rather fill the jobs with people who are already employed, so you wind up with this very un-merry, merry-go-round where people who are laid off are just left out.”
Honkala said it is “incredibly important” to make folks who have been a part of this long-term unemployment process visible.
“I can’t even begin to tell you how much of my time is spent trying to convince people not to go back into the selling of drugs, not to rob people, because they have literally put in hundreds of applications and can't find any kind of employment anywhere,” she said.
Many people facing unemployment are also not online, she said, which adds to the barriers of employment.
“The majority of the jobs nowadays, you have to apply online to find employment,” she said. “Also if anybody has any kind of criminal record, it’s absolutely impossible for you to find employment.”
About 2 percent of the nation’s working population is currently in prison and jails, Jones added. This means even more people will eventually be added to the unemployment rolls and struggling to make ends meet, she said.
Honkala suggested the creation of green jobs as one solution to bringing some of the long-term unemployed back to work.
Unemployed workers marched more than 150 miles from Philadelphia to Washington D.C. from May 18 through May 24 to demand that the U.S. Chamber of Commerce stop efforts to block the creation of green jobs.
She said the U.S. Chamber of Commerce continues to protect the interests of corporations and big business in the country and does not appear to care about the plight of everyday people as well as the planet.
“They continue to not invest in small businesses that are stepping forward and trying to address some of the environmental issues in this country, whether it’s through the use of solar [energy], and whether it’s experimenting and coming up with different ways to protect our environment,” she said. “They are continuing to back big corporations and big businesses and supporting the Keystone Pipeline, the stuff that’s going to have an impact on our water and on our planet.”
Check back with Progress Illinois this week to hear from the long-term unemployed and learn how the federal sequester cuts are also taking a toll on the long-term unemployed.