The Worst Long-Term Unemployment Crisis in 80 Years

Matthew Blake

Kim Brown, who was unemployed for nearly two years before finding work in September, advocates extending emergency unemployment benefits.

Kim Brown says that when she was laid off from her job in Novem­ber 2011 doing cus­tomer ser­vice at an elec­tric com­pa­ny in Chica­go, she wasn’t too upset. I thought this would be a chance for me to get a bet­ter job,” says Brown, who is in her late-40s and has a col­lege degree in cre­ative writ­ing. I was kind of try­ing to switch careers, maybe work for a non-prof­it or do polit­i­cal organizing.”

But Brown soon dis­cov­ered that she was mired in a ter­ri­ble labor mar­ket. She got a few call backs from employ­ers in her first six months out of work, but then the calls stopped. She tried temp agen­cies, but staffing agents told her, You’re going to be real­ly hard for me to sell to com­pa­nies because you haven’t worked in six months.”

In Sep­tem­ber, Brown final­ly land­ed a job, albeit a $9.25-an-hour, 30-hours-a-week gig doing admin­is­tra­tive work at the Uni­ver­si­ty of Chicago’s Nation­al Opin­ion Research Cen­ter. Brown, who does vol­un­teer work at the Illi­nois chap­ter of Orga­niz­ing for Action, Pres­i­dent Barack Obama’s issue advo­ca­cy arm, says a friend she met at the Oba­ma re-elec­tion cam­paign told her about the job.

Not every­one is so lucky. The num­ber of long-term unem­ployed, who the fed­er­al gov­ern­ment defines as work­ers out of a job for at least 27 weeks, is in decline. But there are still 3.6 mil­lion peo­ple that fall into this cat­e­go­ry, out of 10.2 mil­lion total peo­ple unem­ployed as of Jan­u­ary 2014. That means that the per­cent­age of the job­less who are long-term unem­ployed cur­rent­ly stands at 35.8 — a rate much high­er than in every pri­or reces­sion, dat­ing back to the Great Depression.

The prob­lem has gone on mas­sive­ly longer than any past reces­sion,” says Chad Stone, chief econ­o­mist for the lib­er­al Cen­ter for Bud­get and Pol­i­cy Pri­or­i­ties (CBPP) in Wash­ing­ton, D.C. Some of these work­ers’ skills have eroded.”

On Mon­day, Brown was one of a few-dozen advo­cates who braved yet anoth­er frigid win­ter day in Chica­go and dis­trib­uted fliers to passers­by down­town, urg­ing Con­gress — and par­tic­u­lar­ly U.S. Sen. Mark Kirk (R‑Ill.) — to extend emer­gency unem­ploy­ment ben­e­fits. The advo­cates includ­ed those with the Nation­al Employ­ment Law Project, a New York-based research and advo­ca­cy group, as well as reps from SEIU Health­care Illi­nois and Obama’s Orga­niz­ing for Action.

Emer­gency unem­ploy­ment ben­e­fits for those who have been out of work more than 26 weeks expired Dec. 28 after time ran out on the last exten­sion by Oba­ma and Con­gress. Last Thurs­day, an Oba­ma-backed U.S. Sen­ate effort to extend ben­e­fits for three months just missed the 60-vote hur­dle to end fil­i­busters, with sen­a­tors vot­ing 5941 to stop dis­cus­sion on the matter.

A three-month exten­sion was pro­ject­ed to cost $6.4 bil­lion. But it would have brought ben­e­fits — typ­i­cal­ly about half of a laid-off work­ers’ for­mer salary — to at least 1.7 mil­lion Amer­i­cans, includ­ing 80,000 Illi­nois residents.

Illi­nois has the third worst unem­ploy­ment rate of any state in the coun­try. But Kirk, a self-styled mod­er­ate, did not join four oth­er GOP Sen­a­tors in vot­ing yes on the exten­sion. Though it is not clear when or if the Sen­ate will again pur­sue the mat­ter, Illi­nois labor advo­cates tar­get­ed Kirk Mon­day, plas­ter­ing his face on fliers and bom­bard­ing his D.C. office with phone calls.

Illi­nois in par­tic­u­lar is in need of help for the long-term unem­ployed,” says Gre­go­ry Kel­ley, vice-pres­i­dent for SEIU Health­care, explain­ing why Kirk is being tar­get­ed. And in the past Kirk has demon­strat­ed some will­ing­ness to be mod­er­ate,” he adds, cit­ing the sen­a­tor’s sup­port for last year’s com­pre­hen­sive immi­gra­tion over­haul that cleared the Sen­ate in June.

Sen­a­tor Kirk’s office did not return mes­sages request­ing com­ment left on Mon­day. Recit­ing a com­plaint com­mon among GOP Sen­a­tors vot­ing against the exten­sion, Kirk tweet­ed Thurs­day that, I would have sup­port­ed an unem­ploy­ment ben­e­fits exten­sion if the $6.4 b cost was paid for w/​commonsense off­sets instead of polit­i­cal gimmicks.”

The fil­i­bus­tered leg­is­la­tion off­sets the $6.4 bil­lion, but it does, as Kirk alludes to, rely on some­thing of a bud­getary gim­mick: a recon­fig­ur­ing of employ­ers’ pen­sion pay­ments that results in high­er employ­er fed­er­al income tax pay­ments in the short run, but small­er tax rev­enues in lat­er years.

Past bills extend­ing unem­ploy­ment ben­e­fits, how­ev­er, were not quite as con­tin­gent on com­plex nego­ti­a­tions with Repub­li­cans, to become law.

As is his­tor­i­cal­ly com­mon dur­ing reces­sions, Pres­i­dent George W. Bush and Con­gress cre­at­ed an emer­gency unem­ploy­ment com­pen­sa­tion pro­gram in June 2008. The pro­gram pro­vid­ed fed­er­al­ly-fund­ed unem­ploy­ment ben­e­fits for qual­i­fied work­ers out of a job for more than 26 weeks, who are clas­si­fied by the fed­er­al gov­ern­ment as the long-term unemployed.”

Oba­ma and Con­gress then extend­ed the pro­gram sev­er­al times due to the per­sis­tence of the unem­ploy­ment cri­sis. Accord­ing to an Urban Insti­tute report from last year, the long-term job­less hit 45 per­cent mul­ti­ple times in 2010 and 2011.

Anoth­er Urban Insti­tute study also found that the long-term unem­ployed were often stig­ma­tized by employ­ers, and also often lost the social con­tacts need­ed to find work.

Dur­ing her bout of long-term unem­ploy­ment, Brown says that she was the vic­tim of ageism. When I was 21 it was much eas­i­er to get a job because employ­ers assume they’ll have to pay you more now,” she says. The gen­er­al sense of despair among job-seek­ers didn’t help, either. They know that peo­ple are des­per­ate and they are tak­ing advan­tage of it,” Brown alleges of employ­ers she has dealt with.

The CBPP’s Stone says that extend­ing ben­e­fits is real­ly the only clear way to help the long-term unem­ployed, as any oth­er fed­er­al pro­gram will cost mon­ey and so also face GOP resistance.

There’s real­ly not an easy sub­sti­tute to it,” Stone says. There are no quick options.”

Matthew Blake is a free­lance jour­nal­ist based in Chica­go. He has writ­ten for the Chica­go Jour­nal, Wash­ing­ton Month­ly, Wash­ing­ton Inde­pen­dent and The Nation, among oth­er publications.
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