Friday, March 28, 2014

Forgotten People

That's just the way our policymakers like it, for it makes their phony unemployment statistics look far better than they really are.

They can go around and claim the UI rate is "only" 6 or 7 percent or whatever instead of the 24 or 25 percent it really is, especially if you include people like me who aren't really gainfully employed at all but work hit-and-miss.

A new report suggests that the long-term unemployed – those who have been out of a job for six months or more – are having no effect on the labor market, either good or bad. Their unfortunate unemployment situation “exert[s] little pressure on wage growth or inflation”, reports the Brookings Institute.

That's an enormous number of people without any kind of financial footprint. The number of those who have been out of work at least six months is currently 3.8 million, according to the US Department of Labor. That’s about one million less than last year, but still higher than is historically normal.

There's no easy way out, either. When Brookings checked in with those who had been unemployed for more than six months, now 15 months after their initial bout of unemployment, a third weren’t working and had given up their search. Another 30% were still looking.

Those people who aren't working are either married with working spouses or they have decided to retire. A few might even be getting disability.

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