Some of the Unemployed May Never Work Again

More folks than ever before have been out of a job for a year or more. The prognosis for them isn't good. And that spells bad news for the economy.

It's likely to take five or more years for the ranks of the long-term unemployed to return to a more normal level. With the unemployment rate remaining stubbornly high and job creation anemic, the number of would-be wage earners who have been out of work for a year or more is ballooning. It's risen from 668,000 when the recession began at the end of 2007 to the current tally of 4.3 million -- nearly 3% of the labor force and almost three times the previous post-World War II high of 1% in 1982.

That time, it took about five years for the number of long-term unemployed Americans to recede to its prerecession total. This time, there's reason to believe the tide will take longer to ebb. One reason: In the roughly 60 months since the inflated housing market crested, about 2 million jobs in construction have disappeared. Although housing construction will gradually recover, it won't return to bubble levels for a couple of decades, at least. As a result, many of today's unemployed construction workers may never earn a paycheck again. Moreover, the longer someone is out of work, the less likely he or she is to return to the workplace. Job skills atrophy, especially in fields that require computer use or other rapidly evolving technology.

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Jerome Idaszak
Contributing Editor, The Kiplinger Letter
Idaszak, now retired, worked on The Kiplinger Letter as its economics writer for 21 years. Before joining Kiplinger in 1992, he worked for 15 years with the Chicago Sun-Times, including five years as a columnist and economic correspondent in the Washington, D.C., bureau, covering five international economic summit meetings. He holds bachelor's and master's degrees in journalism from Northwestern University.