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Number of workers unemployed for more than a year jumps by 248,000

Number of workers unemployed for more than a year jumps by 248,000

08 Jul 2021

A job seeker fills out an application form during a restaurant and hospitality career fair in Torrance, California, on June 23, 2021.

Eric Thayer/Bloomberg via Getty Images

The number of Americans out of work for at least a year jumped by 248,000 in June, underscoring persistent challenges for some households even as the broader labor market is improving.

Nearly 2.9 million people have been jobless for 52 weeks or more, according to the Bureau of Labor Statistics. (The agency only reports these figures without an adjustment for seasonal factors.)

That represented about 29% of all unemployed workers last month.

Such workers are among the long-term unemployed, or those experiencing a period of joblessness lasting six months or more. It’s a risky financial time for affected households, which may experience income loss, greater difficulty finding a new job and a reduction in future earnings potential.

“There are many people who lost their jobs early on in the recession who’ve been unemployed ever since,” according to Heidi Shierholz, director of policy at the Economic Policy Institute and former chief economist at the Department of Labor during the Obama administration.

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The increase in yearlong unemployment comes as the U.S. added 850,000 jobs in June, the most since August 2020.

But the jump makes sense given the contours of the Covid labor market, Shierholz said.

Layoffs, which began en masse in March and April 2020, were still about 20% higher than pre-pandemic levels over the following two months, she said.

(Layoffs are a different metric than net jobs gained or lost, and are reported separately from the monthly jobs figures.)  

A jump in 52-week unemployment therefore reflects the elevated layoffs a year ago. The numbers will likely soon decline, since layoffs had normalized by July, she said.

“As the overall unemployment rate comes down, I expect the long-term unemployment rate will come down,” according to Shierholz.

Those out of work for an extended duration are likely among the hardest-hit industries, like leisure and hospitality, Shierholz said.

The category, which includes bars and restaurants, accounted for 40% of the job gains in June. However, the industry is still down 2.2 million jobs (13%) versus pre-pandemic levels.

Black workers were most likely to be unemployed at least six months — about 45% were jobless for 27 or more weeks in June. The shares were a bit lower for Asian, Latinx and white workers, at 43%, 39% and 38%, respectively.

(The Bureau of Labor Statistics doesn’t report data on yearlong unemployment for these groups.)

Households may have largely escaped the immediate financial challenges of long-term joblessness during the Covid pandemic due to enhanced unemployment benefits.

States generally pay benefits for up to six months, but the federal government extended the duration three times during the pandemic in separate relief measures.

Roughly two dozen states opted to end federal assistance for the long-term unemployed in recent weeks — meaning affected residents may face financial hurdles if unable to find a new job.

There was one job opening for every unemployed person in May, according to most recent federal statistics.