The Long Term Unemployed: It's Not Who You Think It Is - But It's Probably Someone You Know

The monthly release of unemployment statistics has become as totemic to our society as the flight of birds or auguries of weather were to ancient civilizations. We read more into them that we probably should, but absent the assurance of more meaningful data we follow them with solemn reverence.

The most recent pronouncements have focused on labor force participation. That measures the percent of the population actually working or seeking work. And what it showed was the lowest ratio since the 1960s. Despite the fact that unemployment declined again, however minutely, the implication is that many people have simply given up looking for work. Many of these are referred to as the long term unemployed, defined as those who have been out of work for at least a year.

But the chilling insights come from a look at who comprises this long term cohort. As the accompanying charts show, they are overwhelmingly the highly educated and those over the age of 50. In other words, experienced and talented Boomers far outnumber those typically believed to constitute the mass of unemployed - or unemployable - the poor, the uneducated, the young.

These data suggest that the impact of globalization and technology have fallen especially hard on those who may not have the most up to date skill. But perhaps of greater concern, it is falling on those who were receiving greater compensation by dint of their experience, which may have become a liability as technological innovation rendered them uncompetitive. The size of the Boomer generation, the largest in history, has always created out-sized demographic impacts. This latest indignity, however may place burdens on societies at a cyclical stage when they are least equipped to deal with them. The result, from a political standpoint, may now be in evidence as budgeting attitudes shift under the pressure of economic reality and austerity policies are challenged. The larger question for society is why no one saw this coming or thought to prepare for it. A price will be paid in terms of future growth and societal harmony. And it will not be cheap. JL

Joe Weisenthal reports in Business Insider:

Pew is out with a new study about the long-term unemployed in America.

The long-tern unemployed are people who have been unemployed at least a year, and as you can see (and as you should know by know), the scale of the problem these days is way bigger than it has been during any other period over the last half a century.

What's interesting is that the population that makes up the long-term unemployed is very different than the unemployed population as a whole.

Those who have just a high-school diploma, or less than a high-school diploma are vastly over-represented among the unemployed (the red bar) but among the long-term unemployed (the blue bars), they're rather under-represented. In fact, the Less Than High-School category is the lowest among the long-term unemployed.

Those who are 55+ overwhelm this category, as it's well-known that finding a new job at that age is a brutal experience.

So long-term unemployment is structurally different than unemployment. All the stats are flipped, and those who are the most shut out of the labor force generally are not necessarily those who will be shut out for the longest amount of time.