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Nirit Cohen – WorkFutures
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Jonathan Price – CRE & Flex Expert
- Unemployment, and especially long-term unemployment, can affect people’s happiness and sense of self (as well as the economy).
- Long-term unemployment declined by 357,000 people in October, the Bureau of Labor Statistics said in its October jobs report.
- If long-term unemployment is to decrease even more in future (for the right reasons), employers may have to be more flexible in order to bring in potential employees.
Quitting or being laid off from a job is difficult, and sometimes finding a new job can be even harder.
Unemployment, and especially long-term unemployment, can affect people’s happiness and sense of self (as well as the economy).
Long-term unemployment creates a number of unique issues; the longer people are out of the job market, the less likely they are to achieve their peak earnings.
Proper reskilling and upskilling programs are essential approaches for dealing with long-term unemployment and unemployability, but they are not the only approach.
What is long-term unemployment?
Long-term unemployment is a period of joblessness that lasts more than six months.
The number of long-term unemployed can drop for positive reasons, such as people finding a job, or bad reasons, such as people getting discouraged by job prospects and discontinuing their search for work.
About 2.2 million Americans remain long-term unemployed — about 1.1 million more than in February 2020, according to the U.S. Bureau of Labor Statistics. Roughly 32% of all unemployed Americans have been out of work more than six months.
Long-term unemployment numbers have been decreasing
Long-term unemployment declined by 357,000 people in October, the Bureau of Labor Statistics said in the October jobs report.
The number of long-term unemployed people fell by 136,000 in November, continuing a downward trend since early 2021 as the economy and labor market have rebounded.
Evidence suggests November’s decline was for positive reasons, which is a good development, according to Nick Bunker, an economic research director for North America at the Indeed Hiring Lab.
The labor force grew, as did the share of employed Americans relative to the overall population, according to the November jobs report.
“The positive development that is the decline in the long-term unemployment number I think is indicative of the overall labor market recovery,” said Nick Bunker.
The U.S. unemployment rate has dropped to 3.9% – the lowest since February 2020, when it was at 3.5%.
If there’s a labor shortage, why aren’t the long-term unemployed able to find work?
Even as the United States has a near-record number of job openings and companies complain that they can’t find enough workers, some job seekers remain frustrated that they have not been able to get a job, despite filling out tons of applications a day.
While employers have complained for months about the difficulty they face hiring during the labor shortage, more than six million Americans have remained unemployed. Why?
Well, the pandemic clearly shifted everyone’s priorities around – especially in the way that we work.
American workers are increasingly seeking higher pay, more flexibility, and remote options as they flex their leverage in the current job market.
But still, many companies are not being as accommodative as they could be, and perhaps are continuing to favor candidates with several years of experience in their industry, more availability to work evening or weekend hours, or are preferring those willing to work in-person.
If long-term unemployment is to decrease even more in future (for the right reasons), employers may have to be more flexible in order to bring in potential employees.
What does declining long-term unemployment mean for the future of work?
If job growth remains strong, long-term unemployment is likely to fall further in coming months.
“As [the COVID variant] delta abates, the labor market recovery reaccelerates. The October jobs report is a step in the right direction, indicating that the improving public health situation is unlocking faster jobs growth,” said Daniel Zhao, a senior economist at job site Glassdoor.
Unfortunately, this was said before the emergence of the new COVID omicron variant.
The variant has created renewed uncertainty over the economic outlook, raising the number of renewed job losses as entities respond to lower demand.
Due to this, Ireland’s unemployment rate increased in December following the reintroduction of restrictions in the hospitality sector.
Figures from the Central Statistics Office (CSO) show the number of people not working in Ireland in December was 7.5%, up from 6.9% in November but down from 21.7% in December 2020.
Currently, Canada’s booming economy is producing a low unemployment rate and soaring job vacancies. But despite the tight labor market, long-term unemployment hit the highest level in more than two decades.
The number of people unemployed for over a year in Canada reached 137,200 people in 2021, up 163% from the year before.
Thankfully, not all countries are seeing their unemployment rates increase at the moment. The U.S. still looks to be economically recovering, as does the U.K.
Unemployment, both long-term and short-term, can be combated by the entities that are hiring. The future of work is flexible, and workers will continue to demand more flexible accommodations, and employers will have to adapt.
