Call this the Chart of the Day, courtesy of ABC News’ Dan Arnall. The length of time between jobs for the unemployed has hit an all-time high of almost 40 weeks. For eleven percent of job seekers, that time period goes longer than another year, which is another all-time high as well:
We’ve seen the headline numbers from the monthly jobs report; losing a job means a long stint without employment these days. The median period of unemployment is now at a historic high; 39.7 weeks according to the May Report. That’s the highest it has ever been in the history of the survey.
A new research report from the Bureau of Labor Statistics dug into this trend to offer new details on how long it takes to make the transition from unemployed to employed and found that 11 percent of job seekers took a year or longer to land a new job. Another off-the-chart reading.
Data included in the report shows that between 2000 – 2008 about half of all unemployed people found a job within five weeks. Last year, a little more than a third of jobseekers were able to land a new position in that amount of time.
Given the increases in unemployment in the second quarter of this year, one can expect that the red and orange bars won’t drop much for 2011, either. While the Obama administration has been (until recently) trumpeting the job creation numbers from Q1, the truth is that the rate of job creation during the two-year recovery hasn’t kept up with population growth. We have spent the recovery going backward, not forward, and the slowdown in Q2 will only make that more clear.
Sara Murray notes that trend at the Wall Street Journal’s Real Time Economics blog:
Jobless Americans who dropped out of the work force typically searched for work for five months before ultimately giving up last year. …
Labor-force participation, the share of Americans who are working or looking for jobs, has fallen to its lowest percentage since the mid-1980s. That’s partly because people have grown discouraged about their ability to find jobs and have given up looking. With those workers on the sidelines, the unemployment rate has been lower than it otherwise would be.
The official unemployment rate hit 9.1% in May. Including all of those who had part-time jobs but wanted to work full-time as well as those who want to work but had given up searching, the rate was 15.8%.
As Murray notes, that has harsh implications for the national economy. Not only do we lose the output of these workers, but most of them will transfer to government entitlement programs, which will eat further into productivity and wealth creation. Further, the lack of income keeps the housing markets from finding qualified buyers, which has home values deflating across the country.
It’s time for a new economic approach that encourages capital investment and unburdens businesses from oppressive regulation. Otherwise, we will continue to develop an underclass of discouraged workers, and our population growth with only increase our problems.