Long-Term Unemployment Is Rising in Pandemic Recession

by Jessica Nelson

March 11, 2021

The pandemic recession has lasted long enough that 57,000 Oregonians fit the definition of long-term unemployed, as of January 2021. Two out of five unemployed Oregonians have been unemployed longer than six months. The figure hasn’t been this high since 2013. While the overall number of unemployed Oregonians has dropped to half the level in the spring when the onset of COVID-19 caused record unemployment, an increasing number of workers have yet to find their next job.

Back in 2010, in the early stages of the economic recovery from the Great Recession, the number of long-term unemployed Oregonians spiked to nearly 102,000, the highest number on record. Long-term unemployed are those who have been unemployed for at least six months. The longer an unemployed worker remains unemployed, the less likely they are to find a steady full-time job, and the more likely they are to leave the labor force. Researchers have found that long-term unemployment can lead to a decline in the workers’ knowledge, skills, and abilities, making it harder for them to qualify for available jobs. Other studies show that employers discriminate against the long-term unemployed, making it less likely for an unemployed worker to receive an interview. These barriers to employment can exist even in a strong economy. It remains to be seen how the pandemic will affect employers’ perceptions about long-term unemployment.
Prior to the pandemic, overall unemployment dropped to low levels in recent years, dropping below 90,000 in 2017 through 2019, and reaching a record low of less than 70,000 in January 2020. The number of Oregonians unemployed for longer than six months averaged fewer than 15,000 in 2019. Still, even amidst the lowest unemployment rates on record in Oregon, roughly one out of five unemployed Oregonians had been unemployed for six months or longer.

It took about seven years of economic recovery to reduce long-term unemployment to the low levels seen in 2017 through 2019. In addition to how persistent long-term unemployment was post-recession, it’s unclear from the data whether most of the improvement came from the long-term unemployed finding work, or if many left the labor force altogether.

As the number of long-term unemployed rises once again in the pandemic recession, the same questions emerge. But this is a very different recession. Job losses happened in a sharp spike, driving unemployment to steep peaks in April and May 2020, before beginning to fall again within months. While job losses returned late in the year with additional restrictions due to the fall spike in the virus, job gains are expected to resume in short order as those restrictions ease. It’s possible we won’t reach Great Recession levels of long-term unemployment if Oregon experiences rapid recovery from the pandemic recession. Still, long-term unemployment is higher than it’s been in years, and these workers may need additional support in their return to work as the recovery continues.

 


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