The Scarring Effect of Long-Term Unemployment

Bill Scher

A new report from the National Employment Law Project, “Scarring Effects: Demographics of the Long-Term Unemployed and the Danger of Ignoring the Jobs Deficit,” is a blaring siren to policymakers in Washington.

While noting that nearly 5 million people have been out of work for over six months, the report reminds that their individual suffering hurts the economy as a whole: “Long-term unemployment is an enormous waste of our nation’s human capital that will have lasting repercussions for the economy as well as the health and financial security of workers and their families … Our economy cannot afford to lose valuable productive capacity and tax revenue associated with good jobs by allowing millions of today’s long-term unemployed workers to become tomorrow’s disadvantaged workers. Beyond earnings losses, there is a host of health and social issues associated with unemployment and long-term unemployment in particular that affect families, but also have a larger cost to society.”

The report also finds that the population of the long-term unemployed goes beyond the stereotype of older blue-collar workers: “Some populations were harmed by the recession more than others, but surprisingly, long-term unemployment cuts across sex, education, race, and age. And, while the manufacturing and construction industries experienced massive job losses, they only account for one-fifth of long-term unemployment.”

NELP concludes, “We suggest that the diversity of this population means it will take a variety of job creation measures to reattach them to the workforce, and that the longer we wait in the name of austerity to implement these programs, the more intractable the problem of long-term unemployment will become.”

Read the full report by clicking here.

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