NCPA - National Center for Policy Analysis

The Human Disaster of Unemployment

May 18, 2012

In 2007, before the Great Recession, people who were looking for work for more than six months accounted for just 0.8 percent of the labor force.  In 2010, however, the long-term unemployed accounted for 4.2 percent of the workforce, and this figure would be 50 percent higher if we added the people who gave up looking for work, say Dean Baker, co-director of the Center for Economic and Policy Research, and Kevin Hassett, director of economic policy studies at the American Enterprise Institute.

Long-term unemployment of this magnitude is without precedent.  In each recession of the last 50 years, the economy has contracted only to bounce back in a short time.  However, the social and economic ills of the recent downturn are substantial and without real precedent.  This is especially true of the impacts on the nation's oldest workers.

  • Older workers have seen the largest proportionate increase in unemployment in this downturn: the number of unemployed people between ages 50 and 65 has more than doubled.
  • A worker between ages 50 and 61 who has been unemployed for 17 months has only about a 9 percent chance of finding a new job in the next three months.
  • A worker who is age 62 or older and in the same situation has only about a 6 percent chance.

These employment figures can have severe effects on the wellbeing of the population as a whole.

  • Economists Daniel Sullivan and Till von Wachter estimate a 50 to 100 percent increase in death rates for older male workers in the years immediately following a job loss.
  • This higher mortality rate implies that a male worker displaced in midcareer can expect to live about one and a half years less than a worker who keeps his job.
  • This is partially explained by a recent study that found that a 10 percent increase in the unemployment rate would increase the suicide rate for males by 1.47 percent.
  • Joblessness is also associated with some serious illnesses, including cancer, heart disease and psychiatric problems.

A possible solution for job losses in future recessions can be borrowed from the German playbook.  Work sharing encourages employers to reduce their workers' weekly hours and pay instead of implementing layoffs.  States make up some of the lost wages from their unemployment funds.  Work sharing allows workers to stay employed while potentially saving public dollars.

Source: Dean Baker and Kevin Hassett, "The Human Disaster of Unemployment," New York Times, May 12, 2012.

For text:


Browse more articles on Economic Issues