The Truth about Long-Term Unemployment

Statistics are devious, difficult things, which is why they are bandied about so freely in politics, making it hard to know what the truth is sometimes. For example, is long-term unemployment getting better? A recent story by CNBC, “Long-Term Unemployment Now a Thing of the Past?” suggests that it is.

The first part of the article is optimistic. But then the painful truth emerges:

  • We have 12.3 million people officially unemployed, and of these, 4.7 million are considered “long term unemployed,” but…1
  • Many of those listed as employed have taken whatever menial job they could find, not the level of work they are capable of and have done for decades.
  • About 7 million unemployed people have given up looking.2
  • 7 plus 4.7 = almost 12 million long-term unemployed people, people increasingly unlikely to ever find important work again.3 Ponder that one for a moment. It isn’t getting any better, it’s getting worse. They are dropping out of sight.
  • Meanwhile younger people are being hired, the older long-term unemployed left behind. So the low level of “stable growth in employment” we see is just enough, give or take, to hire the new people coming into the workforce.
  • Speaking of new grads…there’s concern that they also are underemployed. According to a recent study, in 2010, 20 million of them worked in jobs requiring less than a bachelor’s degree. Furthermore, 15 million college grads held jobs that required only a high-school diploma.4

I am not sure what this means for the country, the economy and the markets in the long run. But we need to be thinking about it; it will not go away.

Hewins Financial Advisors, LLC d/b/a Wipfli Hewins Investment Advisors, LLC (“Hewins”) is an investment advisor registered with the U.S. Securities and Exchange Commission (SEC) under the Investment Advisers Act of 1940. Hewins is a proud affiliate of Wipfli LLP. Information pertaining to Hewins’ advisory operations, services and fees is set forth in Hewins’ current Form ADV Part 2A brochure, copies of which are available upon request at no cost or at www.adviserinfo.sec.gov. The views expressed by the author are the author’s alone and do not necessarily represent the views of Hewins or its affiliates. The information contained in any third-party resource cited herein is not owned or controlled by Hewins, and Hewins does not guarantee the accuracy or reliability of any information that may be found in such resources. Links to any third-party resource are provided as a courtesy for reference only and are not intended to be, and do not act as, an endorsement by Hewins of the third party or any of its content or use of its content. The standard information provided in this blog is for general purposes only and should not be construed as, or used as a substitute for, financial, investment or other professional advice. If you have questions regarding your financial situation, you should consult your financial planner, investment advisor, attorney or other professional. Hewins does not provide tax, accounting or legal services.
Roger Hewins
Roger Hewins

President

Roger Hewins is the President of Hewins Financial Advisors, based in North Palm Beach, FL. Roger has more than 30 years of experience in investment management, helping bring the sophisticated financial advice typically reserved for large institutional clients to everyday investors, from high-net-worth individuals and families to small businesses and retirement plans.

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The Truth about Long-Term Unemployment

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