The Unemployed Are Running Out of Hope

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The new face of joblessness

Today, the unemployed sector cuts through a very broad cross-section of the country. Since the end of 2007, over 8 million jobs have vanished, and the end is not in sight yet. The ranks of the unemployed have now swelled to nearly 16 million people.

In the past, recessions have mostly hit blue collar and low level retail jobs, and white collar layoffs accounted for about 30 percent of job losses. By contrast, the current recession has seen 50% of the lost jobs be from managerial, professional, and skilled white collar positions. Workers in the upper echelons that are scrambling for cash now, the current recession has changed the world overnight.

Who has been hardest hit?

Past recessions hit minorities the hardest, and this hasn’t changed. According to current Labor Department statistics, the nationwide unemployment rate in November was 10%, but joblessness among African-Americans, for example, was 15.5%. Interestingly enough, the unemployment rate for men is 11.9%, compared to 8.1% for women, the widest unemployment gap for over 50 years. Older workers are being laid off at a faster rate than younger workers.

Are unemployed persons finding new jobs?

The unemployed are staying that way for unusually long stretches of time. Almost 25% of jobless people have been unemployed for over 6 months, the highest long term unemployment level since the Great Depression. And that 25% long-term unemployment figure doesnt include discouraged workers people who have given up looking for work and people who have settled for part-time work. Harder hit regions see long stretches of joblessness along with higher suicide rates, along with depression and family conflicts.

But arent layoffs in a recession cyclical?

In most recessions, job losses are from temporary contractions from industries and bussines producing more goods and services than can be absorbed. Losses, therefore are cyclical in nature. Usually, businesses lay off employees until demand picks up, and start hiring again. The current economic downturn, however, is more foundational; that is, some industrial segments appear to have undergone permanent shrinkage home construction, vehicle manufacturing, and newsprint publishing, for example.

New-home construction busts along with the housing crisis has shifted constriction families from affluence to poverty, or survival mode at best. It’s hard to think that housing construction as an industry will see a boom again. For that matter, theres no reason to suspect that vehicle manufacturing will ever return to a glorious era of unthinking tunnel vision, or that two-inch-thick newspapers will ever again grace the breakfast table of every American home.

How do long term unemployment sufferers get by?

They sell cars, get rid of extra phones, cancel health club memberships, and cancel vacations. They are looking for any income they can find. Most workers who qualify for unemployment pay receive about 60% of their former wages, but unless Congress extends their benefits, they expire after 26 weeks. But even unemployment benefit extensions eventually expire, at which point people may become eligible for welfare benefits and food stamps. A family of four might receive $ 900 per month, which wont begin to cover such basic things as food, housing, and health care. From there, without family or friends to help, it’s a short jump to soup kitchens and private charities. Those experiencing long term unemployment face prospects that are grim.

Will new jobs be created?

It’s an unanswered question. Some politicians are eager to ramp up spending to salvage shrinking industries, but thats more a bandage than a cure. There is talk of replacing shrinking industries, like auto manufacturing, with “green” industries that will create a new economic boom, but to make this into reality would require bilions in private and government investment, and time that today’s unemployed population may not have. Not all displaced workers can learn new skills quickly. Even those can don’t have odds in their favor of returning to anything close to their former pay. This is especially true for older workers, or those workers which are highly specialized in a specific field.

Will current job losses become permanent?

It’s sad to think many people who have lost their jobs may never work in their fields again, or to their previous situation in life, but it seems to be the unfortunate case. Barring something truly unforeseeable, such as the creation of a whole new economy, we are likely to see an unprecedented recessionary shift toward permanent job losses.

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