3 Common Misconceptions About Long-Term Unemployment


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Long-term unemployment is incredibly destructive, damaging not just individuals but their friends, family, and even society at large. These are people who, not for a lack of trying, are no longer contributing to the economy. With the crisis fading slowly into the past, the question remains why is long-term unemployment so persistently high following the late-2000s crisis?

Understanding the answer to this question could help prevent a similar phenomenon in the future. Here are some common misconceptions about why the long-term unemployment rate is so high.

1. Only a small percentage of the unemployed have been without work for a long time

The U.S. Bureau of Labor Statistics defines long-term unemployment as labor force participants who have been out of work for 27 weeks or more. As of July, 37 percent of the 11.5 million people without work in the U.S. fell under the umbrella of long-term unemployed, a near-record rate that is down only slightly from post-crisis highs of more than 40 percent in 2012.

This high rate of long-term unemployment is agitated by the fact that the seasonally adjusted average duration of unemployment in July was 36.6 weeks, up by one full week on the month but down by two weeks on the year. The median duration was 15.7 weeks, down by a fraction of a week on the month, and by about one week on the year. These figures, as ugly as they are, may also cloud the full picture.

Headline unemployment data do not include would-be workers who have given up searching for a job entirely and have dropped out of the labor force. The labor force participation rate was 63.4 percent in July, down substantially from its pre-crisis level of about 66 percent.