Long-term unemployment impacts all education demographicsDate posted: 8/21/14 10:15:00 AM
Advanced degrees aren't helping recently laid off Americans the way they did in past generations, according to The New York Times.
While higher levels of education typically help a person net a higher paycheck, around 37 percent of unemployed Americans with advanced degrees have been out of work six months or longer, which is about the same as all other educational demographics.
In past years, workers with advanced degrees who were laid off typically found employment faster than a person who was laid off if they held a bachelor's degree or were a high school graduate. That number is nearly identical in the current economic environment, according to the Times.
"It is not just the problem of people who don't have any skills and can't find work," Katharine Abraham, a professor at the University of Maryland and a former commissioner of the Bureau of Labor Statistics, told the Times.
Similar to education, age does not make much of an impact - except for a single demographic - when looking at long-term unemployment rates. The only age group to break the trend was the 16 to 24 demographic, which has a high long-term unemployment rate, but a smaller percentage of workers who have been out of the market for an extended length of time.
Long-term unemployment by the numbers
Roughly 3.5 million Americans who have been unemployed for at least six months are still looking for work, according to The Washington Post. But that number seems to be coming down.
Tomaz Cajner and David Ratner, two economists with the Federal Reserve Board, recently stated that the nation's long-term unemployment is falling fast.
In a note published by the Fed, Cajner and Ratner said "the long-term unemployment rate dropped 0.5 percentage point, thereby accounting for almost the entire decline" since the end of 2013.
The long-term unemployment - which includes those who have been unemployed for at least 27 weeks - fell to 1.98 percent. That's a major drop from just four years ago, when that rate was 4.4 percent of the nation's working population.
"The improvement in the labor market is reaching the long-term unemployed," Heidi Shierholz, an economist at the Economic Policy Institute, told The New York Times. "They are benefiting from the modest but measurable improvement in the labor market."
Less than a third of all unemployed workers have been away from work for at least six months, which is the lowest rate in five years. The decline in long-term unemployment seen through the first six months of 2014 came at the fastest rate in more than 50 years, according to The New York Times.
Problems experienced by the long-term unemployed
Rand Ghayad, a labor economist at Northeastern University, told The Washington Post that the initial step is one of the biggest obstacles for those seeking employment who have been away from work for an extended period of time.
He said people who have been out of work for a lengthy amount of time generally have a hard time getting companies to look at their applications compared to those who are still employed or who have been unemployed for a shorter length of time.
To find this, Ghayad sent out thousands of fake resumes that were basically identical except for the field of work and the length of unemployment.
Ghayad found that employers preferred applicants who had been unemployed for less than six months, regardless of any past experience, which means the length of unemployment was the biggest determining factor he noticed.
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