A job seeker fills out an application form during a restaurant and hospitality career fair in Torrance, California on June 23, 2021.
Eric Thayer / Bloomberg via Getty Images
The number of Americans who have been unemployed for at least a year rose 248,000 in June, suggesting persistent challenges for some households, even as the labor market improves overall.
According to the Bureau of Labor Statistics, nearly 2.9 million people have been unemployed for 52 weeks or more. (The agency only reports these numbers without seasonal adjustment.)
That was about 29% of all unemployed last month.
These workers are long-term unemployed or those who have been unemployed for at least six months. For affected households, this is a financially risky time in which there may be a loss of income, difficult job searches and a reduction in future earning opportunities.
“There are many people who lost their jobs early in the recession and have been unemployed since then,” says Heidi Shierholz, political director at the Economic Policy Institute and former chief economist in the Department of Labor during the Obama administration.
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The rise in annual unemployment is due to the fact that the US created 850,000 jobs in June, most since August 2020.
But the jump makes sense given the contours of the Covid job market, said Shierholz.
The layoffs, which began en masse in March and April 2020, were still about 20% above pre-pandemic levels for the next two months, she said.
(Layoffs are a different key figure than the net jobs gained or lost and are reported separately from the monthly number of jobs.)
A rise in 52-week unemployment therefore reflects the increased layoffs a year ago. The numbers are likely to decline soon as layoffs normalized by July, she said.
“If the overall unemployment rate falls, I assume that the long-term unemployment rate will fall,” said Shierholz.
People who have been unemployed for long periods of time are likely to be among the hardest hit industries like leisure and hospitality, Shierholz said.
The category that includes bars and restaurants accounted for 40% of the job increases in June. However, the industry has still lost 2.2 million jobs (13%) from pre-pandemic levels.
Black workers were most likely to have been unemployed for at least six months – around 45% were unemployed for 27 weeks or more in June. For Asian, Latinx and white workers, the proportions were slightly lower at 43%, 39% and 38%, respectively.
(The Bureau of Labor Statistics does not report year-round unemployment data for these groups.)
Households may have largely escaped the immediate financial challenges of long-term unemployment during the Covid pandemic due to increased unemployment benefits.
States usually pay benefits for up to six months, but the federal government extended the duration three times during the pandemic in separate relief measures.
About two dozen states have chosen to end government support for the long-term unemployed in the past few weeks – meaning affected residents could face financial hurdles if they cannot find a new job.
According to the latest federal statistics, there was one vacancy for every unemployed person in May.