OLIVIER DOULIERY | AFP | Getty Images
More than a third of unemployed Americans were long-term unemployed in August as benefits for these workers will expire.
About 3.2 million people – or 37.4% of the total unemployed – have been unemployed for at least six months, the official long-term unemployment barometer, the US Bureau of Labor Statistics reported Friday.
The stock has fallen for two months in a row, below its March 2021 high of 43.4%. But the level in August remains high by historical standards. The Great Recession is the only other time since World War II that more than 30% of unemployed Americans have been long-term unemployed; At that time, in April 2010 it peaked at 45.5%.
Long-term unemployed people tend to face greater financial difficulties.
Household income can drop significantly and finding a new job becomes more difficult, according to labor economists. The momentum can negatively affect long-term income potential and increase the likelihood of losing a future job.
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The federal expansion of unemployment benefits supported household incomes during the pandemic and mitigated that financial impact.
Unemployed people can usually get state unemployment insurance for up to 26 weeks, although some states offer fewer. The extensions offered the long-term unemployed additional benefits financed by the federal government for several weeks.
However, these benefits expire on Labor Day. (However, administrative regulations mean they expire on Saturday or Sunday, depending on the state.)
About 3.8 million long-term unemployed received this federal aid in mid-August, the US Department of Labor reported on Thursday. Most Republican state governors withdrew federal aid in June or July before it officially expired nationwide.
Other federal aid ends around the same time. The Supreme Court on Aug. 26 lifted a national eviction ban imposed by the Biden government, which may affect millions of people who are behind on their rent. (Some states still have an eviction moratorium in place.)
Job prospects can also be adversely affected by an increase in new Covid cases due to the highly contagious Delta variant.
The US added 235,000 jobs in August, much fewer than the 720,000 economists expected and a significant slowdown from the roughly 1 million new jobs in June and July. The economy still has 5.3 million jobs below pre-pandemic levels.
Despite this slowdown, Biden government officials pointed to average employment growth of 750,000 over the past three months and a drop in the unemployment rate to 5.2%, the lowest level since the pandemic began.
“But we still have a lot to do to push back the Delta variant and build an inclusive economy,” said US Secretary of Labor Marty Walsh. “Rising infection rates in some states are hitting the food and retail sectors hard, where black workers and women are disproportionately represented.”