A worker’s chances of finding a new job after being out of work for about a year fall to just 10%. About 30% of unemployed workers will find a new job in a few weeks, but these are workers who have not been employed in industries that are downsizing or who may require new skills in order to find a new job.
The data comes from a study by the San Francisco Federal Reserve Bank and is cited in a story at CNNMoney. The Fed study also debunks the notion that “the long-term unemployed will never find new positions,” according to the article.
The story highlights an ongoing debate between economists who believe that the US faces a new menace from long-term “structural unemployment” that signifies a shift in demand for skills — often referred to as a ‘mismatch’ problem — and “cyclical unemployment” that signifies a lapse in demand.
Most recent research into the type of unemployment problem facing the US concludes that the problem is primarily cyclical, not structural. There are some structural elements, of course, or those 10% of workers still looking for a job after a year’s unemployment would have long since been re-employed. But the largest impact on employment comes from lack of demand.
Chances of finding a job even after 18 months of joblessness don’t fall appreciably from the 10% mark, further indicating a cyclical rather than a structural problem. CNNMoney quotes the study:
[There's] a low risk that the U.S. labor market will suffer from a bout of persistently elevated long-term unemployment, even after the most severe recession in postwar U.S. history.
That is probably cold comfort to workers who have been seeking a job for a year or more. That’s a long time by anybody’s calendar.