The number of long-term unemployed Americans has increased

The number of long-term unemployed in the US has exceeded 1.8 million. Experts indicate that this points to a slowdown in the labor market and persistent pressure on households...

The number of long-term unemployed in the US exceeded 1.8 million on a monthly basis this year. According to the government's definition, this group, which has been unable to find a job for at least 27 weeks, has increased by about 45% compared to 2019 and 55% compared to 2023.

Parker Taylor, 29, living in St. Petersburg, Florida, said he recently lost his job and has not been able to find a new one. Despite his young age, Taylor, who has worked continuously since his teenage years, explained that the period of unemployment made him think about his future and his family's financial security.

Hundreds of applications, fruitless interviews

Taylor said he stopped his retirement plans and long-term investment goals because he no longer had a regular income. He stated that he cut back on many expenses from food to social activities, made about 100 applications, attended several interviews but did not get results.

The increase in the number of long-term unemployed also raises questions about the strength of the labor market and the overall economy. Cory Stahle, an economist at the job listing platform Indeed, said this is an important indicator of how quickly the job market can cool people off.

According to official data, the long-term unemployed make up about a quarter of the unemployed. While job listings and private sector employment data released this week were stronger than economists expected, the non-farm payroll report to be published on Friday will provide a new picture of the labor market.

Income loss and mental health pressure

A study by the Boston Fed revealed that the wages of the long-term unemployed are about 32% lower after ten years compared to those who have not been unemployed. For those unemployed for shorter periods, income loss remained around 9% during the same period.

Research also shows a possible link between long-term unemployment and depression. According to Pew Research data, long-term unemployed individuals are more than twice as likely to seek professional mental health support compared to those unemployed for less than three months.

Experts consider long-term unemployment not only as an economic problem but also as a difficult period affecting family life and mental health.

Carl Van Horn, a labor economist from Rutgers University, said this is one of the most devastating experiences people can face besides losing someone close. According to Van Horn, long-term unemployment simultaneously poses a serious health and economic problem.

Families, debts, and social life

Lindsay Acker from Asbury Park, New Jersey, explained that after losing her job in the health sector in September, she fell behind on student loan and credit card payments. She said she could no longer maintain health insurance through the market and switched to Medicaid coverage.

Acker stated that she withdrew money from her retirement account to meet basic needs and postponed talks about starting a family due to financial reasons. She said she is not the same person after long-term unemployment and has lost her joy and zest for life.

Ana Febres-Cordero, 29, living in Chicago and unable to return to her social media job for over a year, said the unemployment period affected her mood. She said she reduced meetings with friends to save money and turned to walking her dog and activities like painting to maintain her routine outside the house.

Febres-Cordero estimated she made more than 300 applications and said the unemployment process eroded her self-confidence. She emphasized that not finding a job for a long time is not only a financial but also a psychological burden.

The pace of finding jobs is slowing down

Long-term unemployed individuals can no longer benefit from most unemployment benefits. Since these benefits are generally limited to 26 weeks, income support often ends even if they continue to look for work.

William Congdon from the Urban Institute said employers may be hesitant about gaps in resumes, making it harder to return to work. Stahle noted that the market's low hiring and low firing tendencies indicate a period where job opportunities are narrowing.

Federal labor data show that job listings and hiring rates have declined from pandemic-era peaks. It is noted that recent graduates are also included in this group; the unemployment rate for recent university graduates is 5.6%, above the general average.

Experts say the effects are not limited to individuals. The tendency of the unemployed to cut back on spending can also pressure consumer spending, which makes up about two-thirds of the US economy. In a period when long-term unemployment is increasing, both household budgets and the overall economic outlook are being tested simultaneously.