We Don't Have An Unemployment Problem -- We Have A Long-Term Unemployment Problem

Today’s jobs report was not good, despite the unemployment rate falling to 6.7%.

What this report masks is that we don’t have an unemployment problem. We have a long-term unemployment problem.

In a response to today’s jobs report, Jason Furman, the Chairman of the White House’s Council of Economic Advisors, included this graph that shows the share of unemployment benefits going to long-term unemployed workers (those out of work more than 27 weeks) and short-term unemployed workers. Check it out:

The regular programs offer benefits to those Americans who have been out of work up to 26 weeks. The red are emergency programs that Congress passes during recessions, which allow workers to collect benefits for a longer time. As you can see, the share of short-term unemployed workers receiving jobless benefits is lower than any point in the past 25 years. That’s because we have so many people who have been out of work for more than six months.

He also sent out this graph that shows the long-term and short-term unemployment rate over the past few years and how they compare to their 2001-2007 averages:

Dylan Matthews also made this point last September when he noted that short-term unemployment is lower than it was in 2007.

Congress needs to pass targeted programs to help these workers. In National Affairs, Michael Strain proposed a couple of good ideas including relocation assistance and wage subsidies while allowing firms to pay the long-term unemployed less than the minimum wage.

Proposals such as approving the Keystone XL pipeline may create jobs, but they are not targeted towards the long-term unemployed. The same is true of infrastructure projects. If we want to help the long-term unemployed find jobs and stop them from becoming permanently unemployable, Congress needs to pass programs targeted at them.

Neither party is doing that right now.

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