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Long-Term Unemployment Is Headed The Wrong Way

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Posted on 15 April 2021 by Constantin Gurdgiev, TrueEconomics.Blogspot.in The share of those in unemployment > 27 weeks is risingOne way to look at the state of the real (as opposed to financialized and corporate-value focused) economy is to look at unemployment. And one of the strongest indicators of longer term changes in the structure of the real economy is the fate of the longer term unemployed. Here is an interesting snapshot of data: the percentage of those unemployed for 27 week or longer in the total pool of the unemployed. The higher the number, the more structural is the unemployment problem. Please share this article - Go to very top of page, right hand side, for social media buttons.If the above is not clear enough, here is the same data expressed in the form of the

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posted on 15 April 2021

by Constantin Gurdgiev, TrueEconomics.Blogspot.in

The share of those in unemployment > 27 weeks is rising

One way to look at the state of the real (as opposed to financialized and corporate-value focused) economy is to look at unemployment. And one of the strongest indicators of longer term changes in the structure of the real economy is the fate of the longer term unemployed. Here is an interesting snapshot of data: the percentage of those unemployed for 27 week or longer in the total pool of the unemployed. The higher the number, the more structural is the unemployment problem.

Long-Term Unemployment Is Headed The Wrong Way


Please share this article - Go to very top of page, right hand side, for social media buttons.


Long-Term Unemployment Is Headed The Wrong Way

If the above is not clear enough, here is the same data expressed in the form of the range for each 12 months period (rolling) between maximum share of the longer term unemployed in the overall pool of unemployment and the minimum share:

Long-Term Unemployment Is Headed The Wrong Way

All of the above suggests we are in deep trouble. And this trouble has been persistent since the Great Recession: we are witnessing a dramatic increase in the duration of unemployment spells. Part of this is due to the impact of Covid19 pandemic concentrated in specific sectors. Part of this is down to the generosity of unemployment benefits supplements and direct subsidies during the pandemic. Part of it is also down to the longer term changes in the U.S. labor markets and changes in households' composition and investment/consumption patterns.

Irrespective of the causes, the problem is obvious: the longer the person remains unemployed, the sharper is the depreciation of skills and their employability. If this (post-2008) experience is the 'new normal', America is developing a massive class of disillusioned and human capital poor workers.


This article appeared on True Economics 14 April 2021.


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