Nearly a Quarter of All Unemployed Americans Jobless For a Year or More – A Post-War High

Twenty-three percent of America's unemployed have been jobless for a year or longer, the highest rate since World War II, according to a study released today by the Pew Economic Policy Group. The report, A Year or More: The High Cost of Long-Term Unemployment, finds that this trend cuts across nearly every industry and occupation, and affects people of all ages and educational backgrounds. The existence of such a large pool of people – 3.4 million – who have been out of work for so long has had a significant impact on the federal budget.

“The number of Americans who have been out of work for a year or longer is roughly equal to the population of Connecticut,” said Ingrid Schroeder, project director of the Pew Fiscal Analysis Initiative, which produced the report. “Their unemployment has a significant impact on their families, their communities, and our government's bottom line.”

Over the past five years, federal spending on unemployment insurance has increased five-fold from $33 billion in FY 2005 to an estimated $168 billion in FY 2010, half of which goes towards unemployment benefits beyond the traditional 26 weeks.

According to the report, people who are 55 or older account for a relatively small number of the overall unemployed population. But, once these workers become unemployed, nearly 30 percent remain jobless for a year or longer, the highest rate of any age group.

Similarly, workers who have a post-secondary education are less likely to be unemployed, but once they lose their jobs, they may remain out of work for an extended period. Twenty-one percent of unemployed workers with at least a bachelor's degree have been out of work for a year or longer, as compared to 27 percent of unemployed workers with high school diplomas and 23 percent of unemployed workers who have less than a high school degree.

“A Year or More launches our new Pew Fiscal Analysis Initiative with its mission to provide fresh insight to inform the public debate on pressing economic and policy issues,” said John E. Morton, managing director of the Pew Economic Policy Group. “With unemployment of a year or more at its highest level in nearly seven decades, this should be of great interest to policy makers grappling with legislative solutions and their potential effects on the federal budget.”

The Pew Fiscal Analysis Initiative, a program of Pew Economic Policy Group, seeks to increase fiscal accountability, responsibility, and transparency by providing independent and unbiased information to policy makers and the public as they consider the major policy issues facing our nation today and the alternative choices to addressing them.