Long-Term Unemployment Is Surging in the U.S., With Hidden Costs for Workers and the Economy

The number of Americans classified as long-term unemployed — jobless for at least 27 weeks — has climbed above 1.8 million on average this year, up about 45% from 2019 and 55% from 2023, a CNBC analysis of Bureau of Labour Statistics data found. The long-term unemployed account for roughly one out of every four jobless workers, according to the latest available U.S. government data.
Long-term unemployment can have ramifications on financial, emotional and family health that linger even after workers reenter the workforce. “It tells us a lot about economic health,” said Cory Stahle, an economist at job site Indeed. “It tells us about how good of a job the labour320 market is doing at absorbing people.”
Long-term unemployed workers' pay was approximately 32% lower after a decade than those who had not lost work, according to a working paper from the Boston Federal Reserve. Those unemployed for shorter periods took a 9% cut over the same time frame. Studies also show a possible link between long-term unemployment and depression, with a Pew Research report finding the long-term unemployed were over twice as likely to seek professional help for depression or other mental health challenges than those out of work for under three months.
Research shows unemployment can negatively impact families and communities — parental job loss increases the chance a child repeats a grade by about 15%, and communities with a larger share of long-term unemployed people have higher rates of crime and violence, the Urban Institute reported.
A rising number of long-term unemployed workers is a feature of the “low-hire, low-fire” labour market, according to Indeed's Stahle, with job opening and hiring rates tumbling from pandemic-era peaks. The group also includes new college graduates struggling to land first roles; recent graduates' unemployment rate was 5.6%, outpacing the broader 4.2% average, according to the New York Fed. The national economy could suffer as more people stay jobless longer and curtail spending, which makes up about two-thirds of U.S. gross domestic product.

(Source: CNBC)