Long-Term Joblessness to Cost $63B in 2011

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NEW YORK (MainStreet) – The problem of long-term employment has grown worse over the past year, a new study says.

According to a report from Pew Charitable Trusts, about 30% of the 14 million people who were unemployed at the end of 2010 had been jobless for a year or longer. This number represents a 25% increase between December 2009 and December 2010 and also amounts to about 4.2 million people, or what Pew says is the equivalent of Kentucky’s population.

Of course this increase comes at a price: Federal spending on unemployment benefits is projected to total $129 billion in 2011. And of this total, regular unemployment benefits (up to 26 weeks) account for $66 billion, while the cost of extended benefits is $63 billion.

These figures, Pew says, are roughly four times more than those from the years preceding the recession. In 2005, 2006 and 2007, federal spending on unemployment benefits totaled between $31 billion and $33 billion.

Pew’s analysis uses data from the U.S. Bureau of Labor Statistics and estimates provided by the Congressional Budget Office.

The report also provides insights into the demographic profile of those who have been or are currently in need of extended benefits. While long-term employment is a problem for people of all ages, Pew found that older workers are the most likely to remain out of work for a longer period of time.

More than 40% of the jobless who are 55 or over have been without a job for at least a year or more. The percentage of those who have been long-term employed, conversely, decreased by age and ranged from about 38% (ages 45 to 54) to slightly more than 10% (under 20).

Pew also found that long-term unemployment was only marginally affected by education. Specifically, 31% of unemployed workers with a bachelor’s degree have been out of work for a year or longer, while 36% of unemployed are high school graduates and 33% are high school drop outs.

Long-term unemployment also affects all industries and occupations equally since more than 20% of unemployed workers in all non-agricultural industries have been out of work for a year or more.

Get a full breakdown of Pew’s findings on its website.

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