The Economy Is Adding Jobs, But Long-Term Unemployment Remains A Threat

The U.S. saw the highest level of job growth since last summer in March, but the number of Americans stuck in long-term unemployment continues to rise.

The country added 916,000 jobs in March, and the overall unemployment rate edged down to 6%, a strong sign that the economy is improving as more Americans get vaccinated, according to the latest jobs report from the Department of Labor. Many of those jobs are coming as leisure and entertainment service industries begin to open up again.

But the prospects for finding a job remain grim for millions. More than 4 million Americans — more than 43% of all unemployed Americans — have been unemployed for 27 weeks or more, a number that’s rising. The economy is still down 8.4 million jobs from its pre-pandemic peak in February 2020.

The evidence of long-term unemployment has been apparent; last month there were more Americans on the federal long-term unemployment benefit program and on extended benefits than there were receiving regular unemployment aid from their states.

“Even at this pace, it could take more than a year to dig out of the total jobs shortfall,” Elise Gould, with the liberal-leaning Economic Policy Institute, wrote Friday. “However, today’s number is certainly a promising sign for the recovery, especially as vaccinations increase and vital provisions in the American Rescue Plan have continued to ramp up since the March reference period to today’s data.”

Despite significant gains, employment in the leisure and hospitality sector is still down 3.1 million jobs since February 2020.

In general, long-term unemployment has historically risen after periods of recession, Zach Moller from the centrist think tank Third Way pointed out.

“As [long-term unemployment numbers] rise and remain elevated we need a strong economy to help,” Moller said. “That’s why a more sustained economic plan like the American Jobs package is important.”

This week, the Biden administration rolled out the first part of his American Jobs Plan, a $2 trillion legislative proposal that would invest in roads, highways, bridges and waterways and make the nation’s infrastructure more green. Next month, President Joe Biden is expected to also unveil a proposal to invest in “human infrastructure,” like expanding child care services, health care and worker benefits.

White House press secretary Jen Psaki said the administration hopes the infrastructure package will pass Congress as soon as the summer in order to inject more jobs into the economy.

The president’s first legislative accomplishment, a $1.9 trillion COVID-19 relief package called the American Rescue Plan, is currently being rolled out. As of Thursday, the Internal Revenue Service announced it had already sent out 130 million stimulus checks of up to $1,400 per person and worth approximately $335 billion in total. The American Rescue Plan also secured jobless Americans additional weekly $300 federal unemployment insurance payments through the first week of September. Benefits for those who have exhausted state unemployment aid were also extended through Sept. 6.

Beyond that, the law, which Biden signed in mid-March, funded additional rental and nutrition assistance, expanded tax credits for parents, and this week began paying for jobless Americans’ health insurance premiums through COBRA, a benefit that will also last through September.

At this rate, Harvard economists Wilson Powell and Jason Furman, who was chief economic adviser to President Barack Obama, said this pace of job growth “still would not be sufficient to return the US labor market to normalcy for 14 months, until May 2022,” in a blog post Friday.

Be the first to comment

Leave a Reply

Your email address will not be published.


*