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How to Tackle Long Term Unemployment- A Collective Approach to Bounce Back

Long term unemployment is a perennial policy concern for several reasons. First, it tends to have detrimental effects on the individuals involved. Workers’ human capital (whether actual or perceived by employers) may deteriorate during a spell of unemployment, and the time devoted to job search typically declines. Both factors imply that the chances of getting employed may increase thereby reducing the time period used up for job search.

More generally, long-term unemployment adversely affects people’s mental and physical well being and it is one of the most significant causes of poverty for their households. Second, insofar as the long-term unemployed become gradually detached from the labor market, they play a reduced role in the competition for jobs. This means that unemployment is less effective in curbing wage pressure, potentially leading to even further increases in unemployment and its persistence (Machin and Manning, 1999). These and related considerations have motivated a wide variety of policies to address the problem of long-term unemployment.

How to Tackle Long Term Unemployment A Collective Approach to Bounce Back

Policy interventions combine elements of ‘stick’ and ‘carrot’. They involve job search requirements and sanctions to promote sufficient search effort; or direct assistance to the unemployed, including help with their job search process and training provision. In addition, governments may provide wage subsidies to firms that hire the long-term unemployed. A number of social experiments in the United States provide evidence on the effects of job search assistance and stricter search requirements. The combination of these two policies often leads to a reduction in the time spent on unemployment benefits. At the same time, this does not necessarily mean that everyone coming off benefits is being employed in a new job (Card et al, 2010).

The US evidence on the effects of training programmes for welfare recipients and employment subsidies is, at best, mixed. The overarching conclusion is that these programmes – at least in the short term – are often ineffective at improving the re-employment chances of the unemployed and in several cases would not pass a cost-benefit test.

Statistical Reflection of the Long Term Unemployment Issue in the US

In January 2017, the Bureau of Labor Statistics released the December 2016 jobs report. The new numbers demonstrated a positive sign towards a reduction of unemployment, with employers reporting net job growth of 2, 30, 000 for the month.

However, one disturbing aspect of the report should be the relatively high rate of long-term unemployment. While the percentage of jobless workers unemployed 27 weeks and longer has been trending downward in recent years, it is still exceptionally high by historical standards and has shown no signs of improvement in the last 6 months.
Even more disturbing is the relatively high rate of “extreme” long-term unemployment, the condition of being unemployed one year or longer. The figure below shows extreme long-term unemployment as a percentage of total unemployment from May 1977 to present. Currently, as per the Bureau of Labor Statistics reports, there are over 2.1 million Americans who have been out of work over the past 18 months.

It is noteworthy that in both 2015 and 2016, the average duration of unemployment was 16.3 weeks; as of last month, i.e. December 2016 the average unemployment spell was around 40 percent longer at 27.6 weeks. And because most of the long-term unemployed are no longer eligible for unemployment insurance, they have to get by without any public support.

Collective Approach to Seeking a Solution for Long Term Unemployment

In May 2013, a Joint Economic Committee was constituted by the US Congress to come up with solutions to tackle the menace of long term unemployment and also suggest remedies through collective participation of employers and employees. The Committee came up with a list of guidelines which are still in the process of being implemented right from the grass-root level to the national level.

The guidelines were meant to provide employment to long-term unemployed people aged between 25-60 (which includes people seeking temporary positions even after retirement from the full time job) including returning war veterans who are not allowed to take up any positions in government offices as well as the armed forces, after retirement. Some of the major points in the guidelines were:

  1. Providing incentives for private-sector employers to hire veterans and the young, including extending or expanding tax credits.
  2. Streamlining the process of obtaining certifications and occupational licenses.
  3. Furthering higher education opportunities for young early-career and mid-career professionals.
  4. Building upon existing programs to ensure that both young persons and returning veterans can obtain the training required for jobs in growing industries.
  5. Ensuring that returning veterans have the assistance they need in transitioning from active duty to the civilian workplace.

It remains to be seen now whether the above guidelines are implemented effectively over the next 5-6 years to do away with the issue of long term unemployment.

Finding Solutions to Long Term Unemployment at an Individual Level

Some of the major steps that have been taken across the world to tackle long term unemployment effectively may also be used in the USA by the Department of Labor as well as the central think-tank to tackle this issue. Some of those remedial measures are:

Counselling the long term unemployed aged between 25-45 by orienting them to change the professional avenue they may have been involved in, earlier. For example, orientation to switch over from a job that involves physical labor to one that involves more of skilled mental labor.

The Department of Labor and the Departments of Training and Skill Development need to organize long term training programmes at economical rates to help the unemployed population develop hard and soft skills for different types of jobs. This will increase options at the time of job search at an individual level.

Education at all levels including the undergraduate and postgraduate levels should ensure inclusion of practical training programmes best suited for a particular profession through long term engagements such as research projects, internships etc.

Individual psychiatric counseling should be provided through both the public and private health care system to keep the unemployed population motivated for long periods and to guard against the cons of long term job search and its effects on a person’s mental and physical health.

Every state should prepare a list of their unemployed population and make special efforts to place the right people in the right jobs by dividing the existing population and creating a talent pool for various kinds of organizations. This will ensure people with the right kind of educational background (in case of freshers) and the right kind of work experience (in case of those with work experience) walking into the right organizations best suited to the needs of both the employers and the potential employees.

The Department of Labor should reach out and tie up with recruitment consultant agencies to notify the unemployed about vacancies in government jobs more often. Currently, the agencies only notify about vacancies mostly in the private sector which limits the options for the unemployed.

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  1. I applied for unemployment on 8-1 and was approved. I received my letter of eligibility and debit card about a week ago. I did not file my intitial bi weekly claim because I missed the deadline by 1 day (didn’t realize they would be closed on Saturday). When I logged on it said I would have to reopen a claim because mine had been closed. I filled out the online form to deactivate the claim. My question is this: will I have another waiting week? And will unemployment have to contact my employer all over again to verify my wages and go through the entire process all over again or will they just reopen the claim with a new date window to file?

  2. Lost my job in 10/2018 due to plant closure, collected vacation and severance pay. Opened a claim in 1/2019. Got an on the job training job through career link in 5/2019 worked one week and became very sick and was off for two weeks VA could not find anything wrong but gave me medication for the symptoms and an excuse to return to work, prior to returning got a call from my recruiter at career link telling me the position was filled so i did not return. Reopened my claim, a few weeks later got a letter informing me the employer had appealed and said i did not return, had a hearing and the employer did not show but i lost and got a 2500.00 over payment. Got a temp job through an agency but have only worked 4 days in two weeks. Reopened my claim and was told i need to earn 2604.00 from current employer before it can be opened, did i do something wrong? Still applying for work but am days away from losing everything, need income to pay bills. PLEASE HELP

    1. Rodney,

      Your eligibility to claim UI benefits depends on multiple factors including monetary eligibility. If you’ve been officially told about the shortage of earnings, there’s nothing much one can do. If you’re still confident of winning the appeal, please make a strong case.

      1. I live in KY but my base wages were from earnings in GA when I lived there. I’ve exhausted my benefits in KY. Am I able to now file through GA since my earnings through 10/18 came from there?

        1. Dee,

          As much as I am aware, Unemployment Insurance is a one time cycle. Please call the Unemployment Office in GA for more.

  3. The hours at work have been cut due to lack of business for every department.
    So all full-time positions are now part-time.
    How do I file for partial unemployment?
    The only options I see (in Texas) are for full unemployment.

    1. Eric,

      You should be able to claim partial UI benefits. Please consider applying online until full hours are restored.

    1. William,

      If everything goes well, it should not take more than 7-10 business days (waiting week). Please call the Claims Center for more.

  4. I was employed by a VA company for 5 years, my contract ended yesterday (07/31/19), however, I worked remotely for those 5 years and live in FL, which state do I apply to for my unemployment benefits?

    1. Oscar,

      Please check with your employer if they remitted UI taxes into the system. Contract workers are generally not eligible.

        1. Oscar,

          In that case, please go ahead and apply if your employer remitted UI taxes into the system.

    2. You apply in Virginia…however, I worked seasonally and they used a ‘quarter’ that was empty, so even though my employer paid in, I only got a 1/3 of what I should have received. Figured that out later :/ They will also question WHY you aren’t able and available to work IN Virginia. They froze my account for about a month.

  5. I worked 37 years with the same company in Texas. On July 2nd of 2018, I was let go due to workforce reduction. I signed up for benefits several months later and now have drawn my 26 weeks of benefit. Is there any program currently open in Texas or federally that will extend additional money while job seeking?

    1. Lonnie,

      The E.U.C(Emergency Unemployment Compensation) remains expired. There is no extension available. Please inquire further with the labor authorities in your state by calling them.

  6. I have been an employee of my company for 34 yrs. My position is being eliminated but I have been offered another position for less money. It is a much more physical job that I am not sure I can perform well. I am 75. If I try to fulfill the position and cannot do it, will I still be able to get benefits if I quit? They want me to try it for a couple of weeks to see if I am strong enough and if I can afford the cut in pay.

    1. Lynda,

      I suggest you call the Unemployment Office to find out about eligibility before making a decision on continuation.

      1. I recently lost my job..i was late for work and they took me off the schedule..never told me i was fired..didnt ask for uniforms back. Another cook was andd has been late for work and he didnt get taken off the schedule.can i still get unemployment?

        1. Kandie,

          Please note UI benefits are only offered to claimants who lose employment due to no fault of their own. You can call the Unemployment Office for clarification.

  7. Are there any training benefits or programs that will pay for an advanced degree, such as a PhD which is needed to become more employable?

    1. There are multiple training programs administered by the Labor Department in each state. For more info, please call visit the official website of the Unemployment Office.

  8. I’m about to exhaust my Unemployment benefits. I was laid off from my first job and
    found employment then I lost my job and became unemployed again. I applied for benefits and have have almost exhausted my benefits but have not found employment. Can I file for an extension?

    1. Deanna,

      The E.U.C(Emergency Unemployment Compensation) remains expired. There is no extension available. Please inquire further with the labor authorities in your state by calling them.

  9. After reading your article it’s still not clear to me about requirements surrounding moving to another state and completing/continuing to collect. I have 8 weeks eligibility left, I am moving from MA to FL. The end of your article says: “Since it’s all virtual (online), you may still consider the option of continuing your claims from the base state even if you move to a different one until completion. As a responsible claimant, it’s your duty to inform the base state about your movement to ensure there are no hassles in the near future.”

    So it sounds like even once I am in new state I am eligible to continue to collect from my base state. I can just continue to do my required weekly job search and reporting to and filing in my base state (I do it via phone call-in). No need to complicate things by doing some crazy state transfer of benefits. Benefits also done via direct bank deposit and no need to change anything. Do I even need to tell my base state I am now living in a new state? Why? Thank you.

    1. Paul,

      For the ease of understanding, each state has its specific rules and laws with regard to administering Unemployment Benefits. It might be an obligation for a claimant to inform about the movement. For clarification, please call the Unemployment Office and speak to a representative.

  10. I was recently fired from my work 25-June-2019/due to me not meeting their “standards/ expectations” i submitted my UE claim on 28-June and have not received any pay as of today, 19-July. The status is currently “adjudication in progress,” my question is, should i be worried this will be denied? I read the FAQ on the UE webpage and it said only a couple applications require the adjudication process. How long does this process usually take to get the final answer of whether I’m denied or approved? The website stated it susuallt takes ~25 days for the adjudication process, does this mean once that’s done then i still have to wait another 2-6 weeks for final processing after? THANK YOU SOO MUCH to whomever is able to provide me with some answers/ input.

    Sincerely,
    Talia
    ** this is my first time ever being fired or having to file for unemployment so i really have nooooo idea what is standard or normal or whatever. I feel like an idiot with my simple questions but it would bring me so much relief having them answered, truly

    1. Talia,

      I can understand your reason for the anxiety. Adjudication is a fact-finding process where both the claimant and the employer will get an opportunity to present their case. During this process, make sure to produce supporting documents that amplify your stance. For all you know, the adjudication can be a lengthy process.

      Best Wishes!

  11. I was permanently severanced from my job due to a Co. Reorg & received my last severance pay last week. I called UE & was told that I should now do my application online since I will no longer be getting funds & still without a job & that this coming Sunday regardless of knowing if I will or will not get benefits yet that I should still file a weekly claim in case of UE back pay.
    So my question is, do I still have to report 4 jobs applied to within this week, even if I do not know if I will be approved/denied for benefits until possibly next week anyway?

    1. Lynda,

      You should continue to report the job applications as long as you’ve been asked to do so. There will be a “Waiting Period” and the first payment will take about 7-10 days after which they’ll flow much quicker. Please call the Claims Center for clarification.

  12. I tried to transfer from one state to another. When I left Montana I was told there would be no problem transferring. When I arrived in North Carolina I had trouble reaching the area manager by phone. When he finally called me back he said to meet him for lunch to discuss when and where I would be working. He did not show up for lunch. Then he never returned any of my calls. I went PA to visit a friend a few weeks later and tried there. I met with the hiring manager and was told there should not be a problem doing the transfer since I was still in the system. I called the store a few times and they said it was still pending. Then I was terminated without even a phone call. Am I eligible for unemployment and if so do I file in Montana or North Carolina. I still have a Montana drivers license but I am living in NC.

    1. Stacey,

      As long as you were unemployed involuntarily, you should be able to claim UI benefits. Please consider applying.

  13. I have worked for 32+ years and recently have become unable to work due to health reasons, so I have had to resign from my job. I have contacted SS and will be able to apply for disability but it will take awhile to process. Can I apply for unemployment benefits? I live in WV.

    1. Sandra,

      UI benefits are only extended to claimants who lose their employment due to involuntary reasons. Please reach out to the Unemployment Office for more.

  14. I had to quit my job at Walmart in Fairmont West Virginia and moved back to my home state ky, I’ve got a son with drug problems and 3 older sisters that are not doing so well in health cause of their age. I didn’t understand about the transfer part they had at Walmart that I could put a date when I could start back because of my car problems I thought when I left I had to go in like in s few days, I’ve applied here at Walmart in Winchester ky 40391 two times already plus dollar store, speedway, truck stop, bp, a few other places it’s been going on 7 months without a job I live with my son and its getting harder on him paying rent and utilities and food, not to mention our personal hygiene stuff I really need help I have no income coming in to help him and his wife out I get foodstamps and Medicaid I was praying I could qualify for unemployment PLEASE HELP!!!

    1. Vicky,

      I can understand your situation. Unfortunately, UI benefits are only extended to claimants who lose employment due to involuntary reasons. Please call the Unemployment Office for further clarification.

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