Our economy has recovered – or so the President and some members of Congress would like for us to believe. According to them, the unemployment rate is dropping and the economy is adding jobs. Those headlines mask the harsh reality though that long-term unemployed Americans face.
First, the labor market is far from bullish. More Americans are dropping out of the labor force which is driving the unemployment rate down and the kinds of jobs being added are part-time and lower wage.
The real difficulties according to a new study are with those who haven’t been working for a while. The good news is that the numbers of long-term unemployed have fallen by 31 percent in the past year, but many of those individuals have only secured temporary or part-time work. Those that landed full-time gigs have taken a pay cut compared to previous salaries.
As you can imagine, when you’re out of work for a long time, your quality of life is not the same: One third missed a rent or mortgage payment, more than four in 10 sold possessions for cash, and more than a fifth moved in with family and friends.
Nor will the climb back to normalcy be short or easy. Nearly half of those out of work for at least six months think it will take several years to a decade to recover financially from the recession.
More than 20% of Americans laid off the past five years are still unemployed and one in four who found work is in a temporary job, according to a survey out Monday.
The report underscores that despite a sharp drop in long-term unemployment recently, many people out of work at least six months are still struggling to recoup their former wages and lifestyles. Those idled for years face an even tougher road back to employment.
Forty-three percent of all the unemployed people surveyed were looking for part-time work over the summer, while only 26% sought full-time jobs, a reversal of the findings from the center's previous survey in January 2013.
"I think it's a reflection of the work available to them," Van Horn says. "The labor market is changing." Many employers have converted full-time jobs to part-time or temporary ones to increase efficiency and cut costs.
Despite their struggles, many of the chronically jobless do not benefit from government assistance, the survey shows. Just 38% are receiving unemployment insurance, and 83% of those who did get benefits lost them before finding another job. Last December, the federal government cut off benefits beyond the 26 weeks provided by states.
Lawmakers in Washington and –increasingly- in state houses across the country are turning to band-aid solutions that will only exacerbate the problems with employment in this country. We don’t need higher minimum wages or ObamaCare that raise the costs of labor and drive employers to cut worker hours, lay off employees, or forgo hiring.
We need innovation to flourish and policies that relax regulations and taxes on businesses (big and small), which lower the costs of business. This provides business with the flexibility to add to their workers without eating away at their bottom line.
If instead of getting hired, a laid off worker wants to start her own business such as driving for Uber or Lyft, we don’t need state regulators and local police officers trying to shut her operations down and impounding her vehicle.
Those who are chronically out of work deserve a chance to improve their own future, but that won’t happen if behind the scenes, government is busy instituting policies that undermine their job prospects.