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The Hockey Stick Recovery
by Paul Grasso, April 21, 2010
A report recently released by the Pew Research Center shows that more than 1 in 5 unemployed people have been jobless for a year or more. Of course, this statistic could also be interpreted as 4 out 5 unemployed people have been unemployed for a year or less. Nonetheless, the Pew study showed that about 3.4 million people, or 23 percent of the unemployed in December, were jobless for at least 12 months. It also documented a shorter average workweek, at just 33.1 hours, and an increase in the number of positions that have been permanently eliminated. These indicators have significant effects on extended unemployment and are an indication that long-term unemployment may persist even as the economy recovers.
A clear indicator of the magnitude of the problem is that the federal government may spend five times as much on jobless benefits in 2010 than in the years leading up to the recession. Legislators, especially sensitive to the potentially high rate of turnout from unemployed voters in this election year, are under pressure to extend unemployment benefits at least until the recovery gathers more steam.
Statistically, educational attainment does not seem to significantly affect the length of time a person is unemployed. Twenty-three percent of individuals with less than a high school diploma have been out of work a year or longer, compared to 21% of college graduates and 27% of high school graduates.
However, age does affect the stubbornness of unemployment. A full 30% of unemployed workers over the age of 55 have been unemployed for a year or longer. While this group is, overall, less likely to lose their jobs, older workers have a more difficult time finding new employment and usually cannot find employment with wages and benefits comparable to those they enjoyed before being laid off. The most staggering statistic is that young people between the ages of 16 and 24 have unemployment rates hovering around 30%, or more than triple the national unemployment rate. The hardest-hit demographics are African-American and Hispanic males.
According to the Pew report, the problem of long-term unemployment is not likely to diminish soon, in spite of an economy that is beginning to rebound. In addition, the table below demonstrates that the U6 long-term unemployment and underemployment rate remain stubbornly fixed at above one in six Americans. While the economy no longer seems to be in freefall, the jobs recovery appears to be one of the most gradual of rebounds.
In New York State and the larger counties in the North Country, some of the unemployment news this month is a bit more positive. According to the New York State Department of Labor, New York State's economy gained 9,200 private sector jobs in March 2010. This was the state's third straight monthly increase. The number of unemployed New Yorkers dropped slightly, from 844,500 in February to 831,800 in March 2010.
The Director of the Division of Research and Statistics, Peter A. Neenan, Ph.D., noted "We continue to see improvement in the New York State economy. In March 2010, the state added private sector jobs for the third month in a row, while the state's unemployment rate dropped to its lowest level since June 2009."
Unemployment Statistics (NYSDOL Data)(Not Seasonally Adjusted):
| March 2010 | February 2010 | March 2010 | |
| North Country | 10.6 | 10.7 | 10.3 |
| New York State | 10.0 | 10.2 | 8.5 |
| United States | 9.7 | 9.7 | 8.6 |
| Clinton | 10.4 | 10.5 | 10.1 |
| Essex | 10.6 | 10.9 | 10.8 |
| Franklin | 9.9 | 10.1 | 9.8 |
| Hamilton | 11.6 | 11.2 | 10.3 |
| U-6 Unemployment Rate | 16.9 | 16.8 | 16.2 |