Poverty looms for the long-term unemployed

December 16, 2010: Fifteen million Americans are now unemployed, according to the most recent jobs report. The unemployment rate for November inched up to 9.8%. The grimmest numbers, however, are for the long-term unemployed (see chart 1): 6.3m people, 42% of those unemployed, have been jobless for more than 26 weeks. That number does not include 2.5m people who want a job but who have not looked for a month or more, or the 9m who want full-time work but can only find part-time openings. For the full story see the Economist.

America, unlike some European countries, is not used to such high numbers. No recent recession has seen so many Americans out of a job for so long. Now, with millions fallen from the ranks of the employed, the federal government has deployed its imperfect safety net to catch them.

The first and most generous form of help is unemployment insurance. It is usually paid from a state trust fund and lasts only 26 weeks, as long as recipients meet criteria such as continuing to look for work. But Ohio is one of many states whose unemployment fund is empty. Since 2008 the federal government has paid for an extension of benefits, now to 99 weeks in battered states. Last year this helped keep 3.3m Americans out of poverty, according to the Centre on Budget and Policy Priorities, a think-tank. If Congress passes Barack Obama’s recent deal with Republicans, workers will go on being eligible for the 99-week maximum payment until the end of next year. But even so, 99 weeks is all anyone can get, and many workers have already reached that limit.

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