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The Badger Herald

Independent Student Newspaper Since 1969

The Badger Herald

Independent Student Newspaper Since 1969

The Badger Herald

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Long-term joblessness on rise

WASHINGTON (REUTERS) — The ranks of Americans unemployed for six months or more are swelling as the economic recovery crawls ahead, a trend not seen since the early 1990s when the job market stagnated even as the economy grew.

“The pain of the recession is being borne by these workers,” said Wendell Primus, director of income security with the liberal-leaning Center on Budget and Policy Priorities, a Washington think tank.

By many measures the U.S. job market, while stalled, has not suffered as much as in previous economic downturns. Unemployment in October was 5.7 percent, down from a peak of 6 percent seen earlier in the year, and has remained in a fairly tight range this year.

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While that is sharply higher than the 3.9 percent unemployment seen at the peak of the economic boom that ended in 2001, it is still a level economists just five years ago would have considered practically full employment — the point at which they believed inflation would start rising sharply.

But for those unlucky enough to lose their jobs, the prospects of getting new work quickly have dimmed.

According to the Bureau of Labor Statistics, the percentage of the unemployed without work for 27 weeks or more rose to 20.3 percent in October, the largest proportion since October 1994. It stood at 19.5 percent in September.

“Workers become scarred by the experience of unemployment, and the longer you spend unemployed the more difficult it is to become employed,” said Jeffrey Wenger, a labor economist with the Economic Policy Institute, a Washington think tank.

The average length of unemployment was 17.5 weeks — a bit more than four months — in October. This was down slightly from September’s 17.8 weeks, but still the second-highest level since December 1994, when it was also 17.8 weeks.

The median number of weeks of unemployment — the middle of the overall distribution — was 9.6 weeks in October, down from a peak of 11.7 weeks in June. There have been four months in 2002 in which the median time of being out of work has been nine weeks or more, also the first time since 1994.

In October, the number of workers unemployed for six months or more totaled 1.66 million, barely below a peak seen in June and again the second-highest since May 1994.

Wenger said prospective employers are often suspicious of applicants without work for a long period of time, making them less likely to hire the person. Also, in fast-moving fields such as high technology, job skills that were once advanced can quickly become obsolete.

“Your marketability will go down a lot,” Wenger said.

Both the CBPP and the EPI had called on Congress to further extend federal aid for the long-term jobless before it adjourned last week for the rest of the year.

However, Democrats in the House of Representatives tried in vain to bring up a bill, passed unanimously by the Senate, which would have continued a program for three months which gives an extra 13 weeks of benefits to unemployed workers who have exhausted the normal 26 weeks.

The program will expire Dec. 28, and hundreds of thousands of workers’ extended benefits will be cut off.

White House spokesman Ari Fleischer said Monday that President Bush was “disappointed” by the lack of action but pinned the blame on Congress.

“I think there was just not a sufficient agreement between the House and Senate to get the job done,” he said.

Speaking in Manchester, England Monday, Treasury Secretary Paul O’Neill said Bush would propose “new action” to spur economic growth and job creation in early 2003, but did not offer specifics.

While there is academic debate about whether extending unemployment benefits creates a disincentive for the jobless to look for work, both Primus and Wenger said the recession has tended to blunt that concern.

“I think it doesn’t apply to what you ought to do in a recession,” said Primus.

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