Unprecedented rates of long-term unemployment could threaten the economy's recent gains. Some 5.6 million Americans have been out of work at least six months, 3.9 million of them for a year or more. Research delineates that the longer a person is out of a job, the less likely they are to find a job. This concept correlates with the idea of discouraged workers, who eventually stop searching for work after a long period of unemployment.
By a wide range of measures, the U.S. labor market has over the past two decades lost much of the edge it enjoyed over other developed countries. Gains in education over the past few decades have rapidly deteriorated due to improved learning institutions in other countries. Moreover, the labor participation rate is much lower than it has been fir a long time. These factors point to a labor market that is slowly deviating from the successful template it once was.
The challenge facing the country now is helping to convalesce the long-term unemployment and configuring new processes of employment enhancement.
Source:
"Unemployment Scars Likely to Last for Years"
The Wall Street Journal 2012
