Long-term unemployment

Abstract

Long-term unemployment is associated with poverty, high levels of stress, the emergence of health problems, low self-esteem, family dysfunction, and high rates of anxiety, depression, and suicide. After the Great Recession of 2007–2009, numbers of the long-term unemployed remained higher than previous national averages becoming a persistent problem for society as a whole as well as for individuals and their families. A decade later, many Americans remained in part-time or gig employment and struggled with adequate incomes or the benefits associated with traditional full-time employment.

Overview

Long-term unemployment is variably defined as having been unemployed for more than twenty-six weeks or for more than a year. The unemployed may be divided into those who are actively looking for work and those who have accepted that they will not find new jobs. Sociologists have documented the negative impact of long-term unemployment on individuals, their families, and society. The fact that prolonged unemployment has a negative impact on an individual's chances of becoming reemployed is also well documented. Job loss may lead to lowered income, reduced purchasing power, reductions in the quality of life, and more stressful home environments. Parents who are depressed over losing their jobs and having no immediate hope of finding a new one are likely to have less positive interaction with their children. All of these factors may contribute to academic and/or behavioral problems for children of the long-term unemployed.

In addition, the unemployed and their family members may become stigmatized by society because of a common view that the unemployed are either bad workers or because they are too lazy to work. Families facing long-term unemployment may experience physical and mental health issues at a time when insurance coverage is lost or reduced. Health problems common to the long-term unemployed include poor nutrition, cardiovascular conditions, and alcohol abuse.

Even more than blue-collar workers, white-collar workers are likely to experience lowered self-esteem and higher levels of anxiety and self-blame. There are also higher rates of divorce, domestic violence, and suicide among the long-term unemployed than among the general population. The negative impact of long-term employment may be somewhat mitigated by having a strong support network.

Tony Petrucci, Gary Blau, and John McClendon (2015) identify two ways in which individuals are likely to cope with job loss. The first coping method is problem-focused as individuals attempt to maintain control of the situation, coping with each issue as it arises. He/she might engage in activities or learn new skills to make him/her more employable when applying for new jobs. The second coping method is symptom-oriented and deals with the emotions brought on by job loss. The unemployed who concentrate on recognizing what they are capable of, what they can bring to a new position, identifying ways in which individual competencies may be promoted, and realistically looking for jobs that match their own competences are less likely than other unemployed to experience common negative impacts of job loss. Seeking practical solutions to job loss, whether short- or long-term, may involve networking, resume improvement, and learning to market oneself. Conducting research on potential employers is also helpful because it provides information that might help to focus a resume submitted to a particular company or be a deciding factor in a job interview.

Marriages may also be impacted by long-term employment. Gokce Basbug and Ofer Sharone (2016) found that being married initially helps both men and women to deal with the stresses of job loss. For women, the marriage benefit was true across all income-levels. For some people, particularly for males with traditional views on gender roles and for white-collar workers, being employed is part of their self-identity. Such individuals tend to have more trouble than others dealing with the stresses of long-term unemployment.

Allison Milner, Andrew Page, and Anthony D. Lamontagne (2013) conducted a meta-analysis of the impact of long-term unemployment on suicide rates, gathering data from 10,358 articles found in databases such as PubMed, Web of Knowledge, Scopus, and Proquest. In general, they found that the longer an individual was unemployed, the more likely he/she was likely to face the risk of attempted suicide. The greatest risk occurred during the first five years of long-term unemployment, but the risk continued for up to sixteen years if unemployment persisted. The researchers believe that their findings negate earlier assumptions that high suicide rates among the long-term unemployed is indicative of mental illness, arguing that the root cause of the suicide was long-term unemployment rather than the mental illness caused by being unemployed for long periods.

Further Insights

According to the U.S. government, the Great Recession began in December 2007 and ended in June 2009. It was the most devastating economic event since World War II brought an end to the Great Depression. Unemployment in the United States rose from 4.8 percent to 10.1 percent, resulting in 7.5 million jobs lost. Eighteen percent of the unemployed were classified as long-term unemployed. Between 1960 and 2010, the average period of unemployment in the United States was 14 weeks. However, during the Great Recession, the average period of unemployment was 35 weeks, meaning that unemployment benefits in most states were insufficient. In 2008, the federal government established Emergency Unemployment Compensation as a temporary measure to extend unemployment benefits for a period of 13 weeks.

Americans with a college degree were twice as likely to be unemployed as before the recession, and those without college degrees were three times more likely than those with college degrees to be unemployed. Because men are consistently paid more than women, they were somewhat more likely to lose their jobs during the recession. Job loss in the construction industry was three times that of the financial sector, and both industries were higher than any other sector. Increasing levels of unemployment meant that large numbers of Americans lost their homes, and many lost retirement savings. By 2015, the Bureau of Labor Statistics identified 29 percent of the unemployed as long-term unemployed. Some three million of those had stopped actively looking for work.

Even though the recession officially ended in 2009, unemployment remained higher than normal for several years. In 2014, unemployment was 77 percent higher than it had been before the recession (Caliber-Rudman & Aldrich, 2016). At the same time, of 3.7 million unemployed workers, 36 percent were long-term unemployed. Since the recession, periods of unemployment have also been likely to last longer than those of earlier times. Furthermore, long-term unemployment remains unequally distributed, affecting minorities and those over age 55 disproportionately. In general, employers are less inclined to hire individuals after a long term of unemployment.

During the recession, large numbers of individuals, particularly minimum-wage workers, who remained employed were forced into part-time work. As the economy rebounded, many found that their part-time status had become permanent. In February 2012, 8.1 million part-time workers insisted that they preferred working full time (Applebaum, 2012). At the same time, 12.8 million Americans were unemployed, and 2.6 million Americans were considered to be only marginally attached to the workforce. More than 42 percent of workers had been unemployed for more than six months, and 29.2 percent had been unemployed for more than a year. One in three workers who lost jobs during the Great Recession reported that unemployment wrecked their financial status, and more than one in five considered that the damage would remain a permanent feature of their lives (Applebaum, 2012).

Many Americans have left traditional employment to become self-employed or existing on the margin of employment through temporary work. New technologies have provided broader opportunities for self-employment, leading to the emergence of individuals that have come to be known as "gig workers." Such workers move from job to job according to their own dictates, performing a variety of jobs from walking dogs to catering to answering customer service calls to consulting or contract work. In 2010, it was estimated that 7 percent of the American workforce was made up of gig workers. In a research article for Congressional Researcher written in March 2016, Eugene L. Meyer divided gig workers into five categories: 36 percent were independent contractors, 26 percent were either traditional or freelance workers, 25 percent were moonlighters, 9 percent were temporary workers, and 5 percent were freelancers who owned their own businesses.

Often working from their homes, gig workers are not required to answer directly to a boss, and they generally have flexible work hours. Three-fourths of gig workers cite those reasons for their decision to leave the traditional workplace. Some 64 percent say they take on gig work in order to make more money. Gig workers may also save money on work clothes, transportation, and other job-related necessities. The downside of that independence is that gig workers may have no health or life insurance and no retirement benefits. Unions take the position that gig workers are regularly exploited because employers save money by not paying them benefits.

Discourse

In a 2011 study, Ariel Kalil and Patrick Wightman used data from the Panel Study of Income Dynamics to examine whether or not African Americans were likely to retain cross-generational middle-class status. They followed Americans born between 1968 and 1979 until the age of 21, learning that both Whites and African Americans were less likely to attend post-secondary schools if their parent(s) had experienced prolonged job loss. African Americans were three times more likely than Whites to drop out of the middle class in such cases. In 2007, Americans with high school diplomas earned an average weekly income of $604 as compared with college graduates, who earned an average weekly income of $987. Thus, the threat of recessions and economic downturns is likely to have longer-term effects for African Americans. Because African Americans are likely to earn less than whites, they are also less likely to have savings to tide them over a period of job loss. Kalil and Wightman also discovered that on the average, African American children are likely to spend four years less than white children in a family-owned home. Additionally, African American parents are more than twice as likely as white parents to be unemployed for six months out of a given year.

Links between poverty and long-term unemployment are well established. Since the Great Recession, urban poverty has accounted for 83 percent of short-term unemployment and 87 percent of long-term unemployment (Lemons, 2015). In 2013, the highest poverty rates were found among African Americans (27.2 percent) and Hispanics (23.5 percent) as compared with 9.6 percent for whites and 10.5 percent for Asians. At the same time, the poverty rate for African American men was 12.9; for African American women, it was 11.3 percent; and for African American teens, it was 38.8 percent. African Americans are more likely than whites to work at minimum-wage jobs. In 2009, when the minimum wage was raised to $7.25 an hour, the unemployment rate was 10 percent. In Ferguson, Missouri, the scene of major racial tensions that led to confrontations between police officers and African Americans, the unemployment rate for African American males between the ages of 20 and 24 was 46 percent.

In the spring of 2014, Alan B. Krueger, Judd Cramer, and David Cho published a paper for the Brookings Institution on Economic Activity in which they attempted to determine whether individuals continued to be among the long-term unemployed as a result of lost vestment in the labor market or because they faced employer discrimination resulting from long periods of unemployment. They found that an unemployed individual faces a 19 percent chance of finding new full-time job at the beginning of a period of unemployment. After seven months, that chance declines to 11 percent. After two years, it drops to 6 percent. They also note that the long-term unemployed are only 60 percent as effective as the short-term unemployed in effectively matching their own skills to available jobs.

As a general rule, the unemployed are likely to be young, unmarried, have low educational levels, be African American, and work in the construction industry. Four years after the recession officially ended, males (56%) were still more likely than females (44%) to have been unemployed for more than 26 weeks. Those aged 16 to 34 (42%) were more likely than either those 35 to 49 (28%) or those over the age of 50 (30%) to be long-term unemployed. The never married (47%) were more likely than the married (34%) or the widowed, divorced, or separated (19%) to be long-term unemployed. African Americans (51%) and Hispanics (23%) continued to be more likely to be unemployed than other racial or ethnic groups. Two-thirds of the long-term unemployed had worked in either blue-collar jobs or sales and service jobs (Krueger, Cramer, & Cho, 2014).

The Netherlands experienced a major economic crisis in the 1980s that resulted in a new culture of long-term unemployment, and some sociologists believe that the lessons learned by the Dutch has implications for the study of urban marginality in the United States. Godfried Engbersen, Kees Schuyt, Jaap Timmer, and Frans VanWaarden (2006) identified six types of individuals found among the long-term unemployed. Conformists are the traditionally unemployed who continue to search for jobs and believe that they will find new positions; ritualists go through the motions of looking for work, but they have little interest in actually finding a job; retreatists have stopped looking for jobs and have become isolated from others; the enterprising have opted for work in the informal economy; the calculating draw government assistance while trying to supplement their income in other ways; and the autonomous depend wholly on welfare for survival. Engerbersen and his colleagues found that more educated individuals were likely to fall into either the enterprising or calculating category, while older individuals and the less educated were inclined to be retreatists. Conformists were generally those from traditional working-class families with strong work ethics. Retreatists often developed an entire network of government agencies that provided them various forms of support. Both the calculating and the enterprising claimed the right to live by their own rules and were likely to have weak social ties and variable social networks.

Terms & Concepts

Employment Rate: Based on the number of individuals 16 or older who are engaged in paid work for an employer or who are self-employed. The unemployment rate is a ratio of the number of unemployed workers to the total labor force.

Emergency Unemployment Compensation: Federally-funded program instituted in June 2008 that was designed to help the long-term unemployed through the worst of the Great Recession. It extended unemployment benefits, which had been capped according to earlier unemployment trends. The program was extended until January 1, 2014, with passage of the American Taxpayers Relief Act of 2012 but was not extended at that time.

Ferguson, Missouri, Riots: In June 2014, police officer Darren Wilson shot and killed Michael Brown, an unarmed African American teenager. When Wilson was cleared of charges the following November, it led to massive protests and riots.

Great Depression: The Great Depression began with the stock market crash in October 1929 and lasted until World War II. At its height, one in four workers was unemployed, and families were forced to stand in bread lines in order to feed their families. Franklin Roosevelt was elected in 1932, and he instituted the New Deal, which created a plethora of federal programs and agencies designed to deal with the crisis.

Great Recession: The economic crisis experienced in the United States between 2007 and 2009 that caused unemployment to double, the real gross domestic product to decline, and home prices to fall by 30 percent.

Poverty: Individuals are considered to live in poverty if they are unable to meet financial standards required for a minimum standard of living. The federal government updates the figures each year, considering such factors as income levels and the cost of living. In 2017, for example, an individual earning less than $12,060 was deemed to live in poverty. For a family of four, the poverty level was below $24,600. Each state also establishes its own poverty level.

Bibliography

Applebaum, L. D. (2012). Reconnecting to work: Policies to mitigate long-term unemployment and its consequences. Kalamazoo, MI: W.E. Upjohn Institute for Employment Research.

Basbug, G., & Sharone, O. (2016). The emotional toll of long-term unemployment: Examining the interaction effects of gender and marital status. Conference Papers—American Sociological Association, 1–37. Retrieved September 16, 2017, from EBSCO Online Database Sociology Source Ultimate. http://search.ebscohost.com/login.aspx?direct=true&db=sxi&AN=121201049&site=ehost-live

Engbersen, G., Schuyt, K., Timmer, J., & Van Waarden, F. (2016). Cultures of long-term unemployment: A comparative look at long-term unemployment and urban poverty. Amsterdam: Amsterdam University Press.

Kalil, A., & Wightman, P. (2011). Parental job loss and children's educational attainment in black and white middle-class families. Social Science Quarterly, 92(1), 57–78. Retrieved September 16, 2017, from EBSCO Online Database Sociology Source Ultimate. http://search.ebscohost.com/login.aspx?direct=true&db=sxi&AN=57770216&site=ehost-live

Krueger, A. B., Cramer, J., & Cho, D. (2014). Are the long-term unemployed on the margins of the labor market? Brookings Papers on Economic Activity, 229–280.

Laliberte-Rudman, D., & Aldrich, R. (2016). "Activated, but stuck": Applying a critical occupational lens to examine the negotiation of long-term unemployment in contemporary socio-political contexts. Societies, 6(3), 1–17. Retrieved September 16, 2017, from EBSCO Online Database Sociology Source Ultimate. http://search.ebscohost.com/login.aspx?direct=true&db=sxi&AN=118335914&site=ehost-live

Lemons, J. F. (2015). Fighting urban poverty. CQ Researcher, 25, 601-624.

Meyer, E. L. (2016). The gig economy: Is the trend toward non-staff employees good for workers? CQ Researcher, 26, 265–288.

Milner, A., Page, A., & LaMontagne, A. D. (2013). Long-term unemployment and suicide: A systematic review and meta-Analysis. Plos ONE, 8(1), 1–6.

Petrucci, T., Blau, G., & McClendon, J. (2015). Effect of age, length of unemployment, and problem-focused coping on positive reemployment expectations. Journal of Employment Counseling, 52(4), 171–177. Retrieved September 15, 2017, from EBSCO Online Database Sociology Source Ultimate. http://search.ebscohost.com/login.aspx?direct=true&db=sxi&AN=111289788&site=ehost-live

Suggested Reading

Juncker, R. N. R. (2016). Economics of the labor market: Unemployment, long-term unemployment, and the costs of unemployment. NY: Springer Business and Economics.

McTier, A., & McGregor, A. (2018). Influence of work–welfare cycling and labour market segmentation on employment histories of young long-term unemployed. Work, Employment & Society, 32(1), 20–-37. Retrieved January 1, 2018 from EBSCO Online Database Business Source Ultimate. http://search.ebscohost.com/login.aspx?direct=true&db=sxi&AN=127736071&site=ehost-live

Ornstein, A., & Lubik, T. A. (2015). The rise in long-term unemployment: Potential causes and implications. Economic Quarterly, 101(2), 125–149.

Nesporova, A. (2017). Determinants of structural and long-term unemployment. Employment Working Paper, (218), 31–33. Retrieved January 1, 2018 from EBSCO Online Database Business Source Ultimate. http://search.ebscohost.com/login.aspx?direct=true&db=sxi&AN=123813179&site=ehost-live

Sargeant, M. (2017). The gig economy and the future of work. E-Journal of International & Comparative Labour Studies (EJICLS), 6(2), 1–12. Retrieved January 1, 2018 from EBSCO Online Database Sociology Source Ultimate. http://search.ebscohost.com/login.aspx?direct=true&db=sxi&AN=124348380&site=ehost-live

Vermal, N. P. D. (2013). Recession and its aftermath: Adjustments in the United States, Australia, and the emerging Asia. New York, NY: Springer.