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Long-Term Unemployment: What is it, Who is it Affecting Most, Resources to Help
Hcareers / JANUARY 19 2021
Summary

We’re coming up slowly on the one-year mark of the COVID pandemic and the start of the economic downturn and hospitality unemployment is still at 16.7%. 

Many people, especially hospitality workers have found themselves furloughed or unemployed for months, and although we’re seeing some progress in employment numbers, it will take some time to return to pre-COVID levels. Many people are currently experiencing long-term unemployment. 

What Is Long-Term Unemployment?

Long-term unemployment is categorized by the Bureau of Labor Statistics as unemployed workers who have been unemployed for 27 continuous weeks or more. If you have been unemployed since July, then you have been facing long-term unemployment. 

According to the latest BLS unemployment report, there were 4 million long-term unemployed filers, which is 2.8 million higher than it was in February 2020. They accounted for 37.1% of the total people unemployed in December 2020. 

The highest we’ve seen long-term unemployment was during the 2008 recession, were long-term unemployed workers made up 46% of the unemployment rate, which occurred during the second quarter of 2010. 

What Causes Long-Term Unemployment?

The main causes normally of long-term unemployment are cyclical unemployment and structural unemployment. 

Cyclical unemployment is a downturn in the business cycle, which typically means a recession. Normally, a recession lasts around 18 months, and when the business cycle re-enters the expansionary phase, rehiring happens.  

Structural unemployment is when there is a mismatch between the jobs available and the skills of those unemployed. It occurs when an underlying shift in the economy makes it difficult for people to find jobs. For example, if a robot is able to replace manufacturing workers, then those workers will then need to have or learn computer operating skills in order to keep their jobs. 

Unemployment by the Demographics 

Those who are currently most affected by long-term unemployment according to the latest BLS unemployment report are: 

Overall unemployment has also greatly impacted those who are 20-24 years old, with currently 11.2% unemployment. Mature workers, 55 and older, are also facing a high unemployment rate, 6%. The duration of unemployment for mature workers also exceeds the length of unemployment for mid-career employees since 1973, according to Schwartz Center for Economic Policy Analysis. Many are finding themselves unemployed for 6 months or longer. 

Long-Term Unemployment Challenges 

The current job market is anything but typical. Normally when you are unemployed it’s already difficult to get employed, but currently those unemployed are also dealing with less open job opportunities and more competition with such a large candidate pool. 

The New York Fed’s Liberty Street Economics 2017 Survey of Consumer Expectations found that even though unemployed workers search about 7 times as hard as employed workers for new job opportunities, they only get about twice the number of offers as employed workers. 

Resources for Long-Term Unemployed Workers 

As we wait for COVID-19 to be controlled for traveling and bookings to return to pre-COVID levels for the hospitality industry to being rehiring in larger waves, there are resources available to help those who are unemployed.

  • Extended unemployment benefits: there have been a few extensions to the additional unemployment benefits throughout 2020. Currently, the extended benefits are giving an additional $300 for up to 50 weeks which expires on March 14th. The Biden administration also has additional unemployment benefits in their stimulus proposal.

(Make sure to check your specific states unemployment benefits programs)

Most importantly, although right now everything seems extremely uncertain and difficult, the hospitality industry will come back strong and they will need to rehire a lot of talent when traveling and bookings resume. Don’t give up on the industry and your job search!