Many Long-Term Unemployed Still Reeling from Recession
Business + Economy

Many Long-Term Unemployed Still Reeling from Recession

A dismal picture of a highly troubled and disaffected slice of U.S. society emerged on Monday in a detailed study of long-term unemployed Americans conducted by researchers at Rutgers University.

A third of those 1,153 interviewed for the study said their lives were “devastated” by the Great Recession, forcing major and permanent changes in the lifestyles they once enjoyed. Eighty percent rated their financial condition as fair or poor, while four in ten said they had to sell some of their possessions in order to make ends meet.

They are mostly white (53 percent) or black (23 percent), they are relatively well educated, they at one time earned moderate to middle incomes, and they are more apt to live in the South and West than in the Northeast and Midwest.  More than six in ten say they have experienced stress in family relationships and close friendships since losing their jobs. More than half said they would have to postpone their plans for retirement.

Related: Strong June Jobs Report Masks Woes of Long-Term Unemployed

Perhaps most disheartening of all, 55 percent are so beaten down that they are convinced that “hard work and determination do not guarantee success in America.”

While the unemployment rate for the short-term unemployed has returned to pre-recessionary levels, “the levels of unemployment for workers who remain jobless for more than six month is among the most persistent, negative effects of the Great Recession,” according to the report.  As of August, three million Americans – or nearly one-in-three unemployed workers – had been unemployed for more than six months. Over two million Americans have been unemployed for more than a year – and in some cases for much longer than that.

Related: The Mental Anguish of the Long-term Unemployed

Since  the Great Recession officially ended in June 2009, roughly 10 million private sector jobs were added back to the economy, including 2.5 million in the past year. The overall unemployment rate steadily dropped from 8.2 percent in March 2013 to 6.1 percent in August – although that still left nearly 9.6 million workers without jobs.

While the percentage of unemployed workers who have been jobless for more than six months  has declined from 46 percent in 2010, it is “still above the 26 percent level experienced in the worst previous recession in 1983 and more than double the pre-recession era,” according to the new report.

The bottom line for many of these long-term unemployed Americans is bleak. For example:

  • One in five workers who lost their jobs during the past five years is still unemployed and looking for work.
  • Nearly half of laid off workers who were fortunate enough to find subsequent work were paid less in their new positions, while one in four said their new job proved to be only temporary.
  • More than seven in 10 said they have less in savings and income than they did five years ago.
  • Fifty-five percent say they will need to retire later than planned because of the recession, while five percent said the weak economy forced them into an early retirement.
  • About half said it would take three to ten years for their families to recover financially – while others say they will never recover.
  • Finally, only one in five said they received help from a government agency when looking for a job; only 22 percent enrolled in a government-sponsored training program to develop skills for a new job; and 60 percent received no government assistance beyond unemployment benefits.

Related: The Long-term Unemployed May Finally Get a Break

Carl Van Horn, a professor of public policy at Rutgers and Director of the Heldrich Center, said that the last finding was highly emblematic of the state of mind of many of these long-term unemployed people.  Van Horn said that either they were unaware that government assistance was available or they were too embarrassed or ashamed to ask for it.

Just nine percent of the long-term unemployed said they received assistance from a government agency while they were hunting for work, and only four percent said they were enrolled in a government-funded training program.

“There’s a lot of self-blame that the unemployed have, and they think it’s their fault,” Van Horn said in an interview on Friday. “They don’t seek help and they don’t even think it will help. They’re very discouraged people.”

Just barely over half of those who were unemployed in the past five years said they received unemployment benefits at some point, according to the study.  What’s more, for almost half of those who did receive unemployment assistance, their benefits ran out before they were able to find work.  Sixty-five percent of the long-term unemployed who were laid off between 2009 and 2014 received unemployment insurance benefits. That same percentage said their benefits ran out before they could find another job.

Nearly one in five – or 28 percent of the long-term unemployed – received food stamps.

“The vast majority of those who were laid off during and after the recession reported that they received no other form of government assistance,” according to the report.

Related: GOP ‘Runs Out the Clock’ on Unemployment Insurance

In summing up the findings of the new survey, which was conducted July 24 through August 3, Van Horn said, “While the worst effects of the Great Recession are over for most Americans, the brutal realities of diminished living standards endure for the three million American workers who remain jobless years after they were laid off.”

“These long-term unemployed workers have been left behind to fend for themselves as they struggle to pull their lives back together.”

The nationwide study of 1,153 Americans who are either short-term unemployed looking for work, long-term unemployed or people who currently hold jobs was conducted by researchers Van Horn, Cliff Zukin and Allison Kopicki of Rutgers’ John J. Heldrich Center for Workforce Development. The research center is devoted to strengthening the nation’s workforce during a time of global economic change.

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