Nine million Americans are out of work right now and a third of those have been for quite a while. These unfortunate Americans fall into the category of being long-term unemployed as they have been out of work for more than 27 weeks according to the Bureau of Labor Statistics.
Contrary to what you might expect, the long-term unemployed are increasingly older and more educated Americans. Up to 18 percent of long-term unemployed Americans hold advanced degrees, according to research.
The prevailing belief that college and graduate level education will secure an individual a bright economic future has been turned upside down by the recent recession. Time will tell whether this is a short-term readjustment or a structural change in our labor market.
Older, formerly high-earning professionals with masters and even doctorate degrees face harsh unemployment prospects as they compete against younger professionals who sometimes carry equivalent or even lesser credentials. Being educated is a blessing and curse for these Americans as the roles for which they are qualified don’t exist anymore or have become extremely competitive. And if holders of advanced degrees apply for jobs that require lesser or no degrees, they will likely be turned away as being overqualified.
To make ends meet these Americans are draining their retirement funds, scaling back their lifestyles, selling off properties, moving in with roommates, and delaying retirement. Experts think it will take a decade for them to recover – if they get back to their former status and earning levels at all.
In the upside-down, topsy-turvy world of jobs these days, even an advanced degree can't protect some Americans from tumbling down the economic ladder.
Nearly half of the long-term unemployed in a Rutgers survey published last month estimate it will take up to a decade to rebuild their finances. More than 20 percent say it will take more than a decade, or that they'll never recover.
In a survey of 800 jobless professionals conducted by the Institute for Career Transitions, about 10 percent of the short-term unemployed had doctoral, law or MBA degrees. Among the pool of long-term unemployed, more than 18 percent held such degrees.
Student loans are an especially thorny issue. The U.S. Government Accountability Office finds that 3 percent of households headed by someone age 65 and older carry student loan debt, and the amount of outstanding federal student debt carried by this age group shot up from $2.8 billion in 2005 to $18.2 billion last year.
The elimination of emergency extended unemployment last year made things worse, since long-term jobless professionals have to start liquidating their assets sooner.
The question is what should be done about the long-term unemployed? Constantly extending unemployment benefits is just a band-aid over the gaping wound that is our weak economic recovery which has not created enough moderate-to-high paying jobs.
The Administration is quick to tout its economic progress as captured by a decline in the unemployment rate, but the President glosses over the fact that millions of Americans have dropped out of the job market and of those who do find work, it’s largely low-skilled, low-wage and/or part-time employment.
Better strategies for growth such as eliminating ObamaCare, which raises the costs of labor, and cutting some taxes rates for corporations and investments will aid in generating economic growth and productivity. Jobs -good-paying jobs- will return. However, until there's demand and incentives for growth all Americans will continue to struggle.
For too many Americans, this bleak economy comes at a point in their lives that will make it particularly hard for them to recover at all.