What truly defines the bleak job market is long-term unemployment, which is near post-World War II records. Beginning in December 2009 — that is, for 35 consecutive months — the share of the unemployed who have been jobless for more than six months has exceeded 40 percent. The previous postwar high occurred in 1983, just as the economy was emerging from the harsh 1980-82 slump, when the share of long-term unemployed exceeded 25 percent for a single month. Typically, the long-term jobless represent from 10 percent to 20 percent of the total.
The social consequences have been devastating, although — because this is so new — studies are few. As unemployment persists, the jobless deplete their savings and lose confidence. Marriages become strained; paying everyday bills and the mortgage grows harder or impossible. Contacts with the labor market weaken; potential employers grow more suspicious of long stretches without work.
Even those who ultimately find new jobs often have to take huge pay cuts.