The Long-Term Unemployed
Alan Berube offers this look at long-term unemployment:
While national data don’t reveal exactly where those 5 million workers live, recently released data from the Census Bureau offer a window on the labor markets that were already highly troubled in 2008, which almost certainly contain outsized shares of the long-run unemployed today. This map examines two measures for the 100 largest metro areas in the United States in 2008: unemployment (the share of adults not employed and actively looking for work), and labor force participation (the share of adults employed OR actively looking for work). It restricts these measures to working-age adults (age 25 to 64) who have a high school diploma or less, the educational group most severely impacted by the downturn. Where unemployment rates were already high in 2008, or labor force participation rates were low (signaling dropouts from the labor market), problems are likely to be even greater in 2009.
It seems very unlikely that any more than a tiny fragment of the unemployed in these areas have obtained a job in 2009, so these are going to be loci of very long-term unemployed people. And evidence suggests that there are specific challenges associated with getting people back into the labor market who’ve been out for a long time. If someone gets laid off in a brief downturn, then when an upswing comes firms will want to hire people and he’ll go to work. But people who stay out of employment for long enough tend to be very resistant to getting back in after a certain point in a way that can be a drag on the economy and the social fabric as a whole for quite a while.