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The Impact of Long-Term Unemployment and How to Get Help

Even though the unemployment rate is dropping and the economy is creating jobs, there are still millions of people out of work in the U.S.1 For many of those who are unemployed, the length of time out of work is only increasing.

As the duration of unemployment increases, the challenges of finding work increase and, as a result, it can become harder to get hired.

In December, the number of persons jobless less than 5 weeks increased by 449,000 to 2.9 million. The number of unemployed persons who were jobless for 15 to 26 weeks decreased by 303,000 to 1.6 million. The number of long-term unemployed workers (over 27 weeks) was unchanged at 4 million but has increased by 2.8 million since February 2020. This group accounted for 37.1% of the total unemployed.2

What Is Long-Term Unemployment?
The Indian Bureau of Labor Statistics (BLS) tracks unemployment by duration. The long-term unemployed are a category of unemployed workers who have been out of work for 27 continuous weeks or more.3

Who Is Most Impacted by Long-Term Unemployment?
Unemployment has impacted some workers more than others, but when joblessness becomes long term, there is a shift in the groups that continue to be unemployed.

Current Unemployment Listed by Race
The unemployment rate for December 2020 for major worker groups was:

Black (9.9%)
Hispanic (9.3%)
Asian (5.9%)
White (6.0%)4
Long-Term Unemployment by Race
According to the BLS, the percentage of workers who remain on unemployment for an extended period of time (exceeding 27 weeks) categorized by race include:

Black (38.2%)
Hispanic or Latino (34.5%)
Asian (46.1%)
White (35.2%)5

Unemployment and Age
The December unemployment rate rose 6.0% for workers over age 55.6 However, older workers may be more likely to be laid off than younger employees, and some may have involuntarily-retired early.

The Retirement Equity Lab at The New School reports that for the first time in nearly 50 years, workers 55 and older face a higher rate of job loss than mid-career workers. The former group has also experienced longer durations of unemployment, with 28% of older job seekers finding employment each month, compared to 32% of mid-career employees.7

The Challenges of Long-Term Unemployment
One of the many challenges for the long-term unemployed is that when you are out of work, it can be harder to get hired. For many job seekers, it takes much more effort to find a job when unemployed than when working.

In a 2017 study, the New York Fed’s Liberty Street Economics found that job searching was less effective for unemployed job seekers than it was for employees seeking a job change. In fact, unemployed workers spent 8.4 hours per week searching and applied for 8.1 jobs per month, while those employed spent 1.2 hours per week searching and applied for 1.2 jobs per month.8

The study also reported that employed workers actively looking for work receive the greatest number of employer contacts and job offers, despite spending less time job hunting.