In another clear sign that unemployment is devastating the economic landscape, half of America's unemployed have been unemployed for at least about three months (15 weeks or more), while a third of the unemployed have been unemployed for (at least) a staggering six months (26 weeks or more).
Back in February 2008, I stated that the then young recession would probably, based on the trend of previous recessions, lead to a greater proportion of the unemployed being unemployed for months at a time. This did come to fruition, unfortunately.
I'm not expecting this to be particularly shocking to most of you who have been well informed, no doubt, and may be one of these unemployed (my mother is approaching the 15+ weeks category herself). But I feel that this important milestone in our country's history should be put on record and made easily known to people.
The fact that so great a proportion of the unemployed have been in their situations for months, indeed at record highs going back to 1948, demonstrates yet again that this recession's severity cannot only be measured in terms of the face value unemployment figures. Many have stated it is not as severe as in the early 1980s, because unemployment has not reached 10% yet (it reached 10.8% in December 1982.) This is fair game, but it distorts another reality. The severity of the 2007-2009 recession can also be based on the fact that people who lose their jobs are not as quickly hired again. Whether or not the economy is still in a technical recession is up for debate. And to be frank, as long as people continue to lose their homes and their jobs, the word "recession" in the practical, tangible sense is very much ongoing. I will say no more on that.
Look at these four graphs explaining this visually. I apologize about the time axes, which only show 1948, 1978, and 2009. But, that's because I wanted to make the dates precisely to match the unemployment trend, so the graph starts at January 31, 1948 (when the data were first collected) up until August 31, 2009 (to represent the latest report.) I'm not using the best spreadsheet program either. For the first graph, I added the years in which those respective recessions took place or began.
In July 2009, 54.5% of the unemployed were unemployed for 15 weeks or more, a record high. In comparison, in July 1983 when 15+ weeks unemployment peaked during that cycle, 41.0% of the unemployment were 15 weeks or more into their status. Which is more severe? Note Figure 1.
Figure 1
For the 26+ weeks measurement, this is no better (relatively speaking.) In July 2009, it was 34.3% versus 25.7% in June 1983, the peak of that cycle. Note Figure 2.
Figure 2
Of course, another way to measure this is to take the unemployment rate for each of these timelines. Let's do that. Here it is for the 15+ weeks situation (Figure 3):
Figure 3
Wow! So, most recently, 5% of America has been unemployed for 15 weeks or more. That's equivalent to the TOTAL unemployment rate for December 2007 when the recession began. That's mindblowing.
Now let's examine people unemployed for 26 weeks or more (Figure 4):
Figure 4
It, too, is at record highs, more or less, at 3%. That's similar to the total unemployment rate in the late 1960s.
In previous post-World War II recessions, which were largely manufacturing led, employers were cutting workers by way of furloughs, so those workers were expected to be rehired shortly after the recession. It seems to make sense, then, that people were unemployed for much shorter periods of time then than now. Now, especially manufacturing workers, people are laid off through attrition. Their jobs are not predicted to return anytime soon. This leaves us with a massively growing class of people who are seriously, permanently unemployed. Since 1990, we've seen the buzz word "jobless recovery" come into the fray. It was in the early 1990s that the term was first used, because when that recession ended in March 1991, it was not until August 1992 that the number of jobs reached a new high, and that's not even taking population growth into account (which, by many measures, recommends the economy must add 100,000-150,000 jobs each month just for stable employment.) The 2001 recession was the worst one yet. That recession ended in November 2001, but it was not until February 2005 that new highs were reached. It haunts me to think how this one pans out.