Jobless Report To Underscore Longterm Unemployed

Tomorrow, the government issues its latest unemployment report. David Wessel, economics editor for the Wall Street Journal, will be paying special attention to the number of long-term unemployed - people who've been out of work for months - or even years, at this point.

David, good morning.

Mr. DAVID WESSEL (Economic editor, Wall Street Journal): Good morning, Steve.

INSKEEP: Welcome back to the program. So how's hiring been going in the economy broadly?

Mr. WESSEL: Well, basically it's been going really lousy. We lost eight million jobs during the recession. And in the last six months we've created less than 100,000 jobs a month in the private sector, while state and local governments have been cutting back.

So people are going to be watching this report very closely to tell whether the economic recovery is running out of steam before we really recover.

INSKEEP: And this is significant as it goes on, I suppose. We've talked about this before. I mean, there are lots of people who can survive two months out of work, three months out of work, even six months out of work. But you've been looking at people who've been out of work even longer than that.

Mr. WESSEL: That's right. I mean, nearly half the people who are unemployed have been out of work for six months or more. That's kind of the working definition of being long-term unemployed.

4.3 million Americans - that's equal to the - or more than the entire population of the city of Los Angeles - have been out of work for a full year. And that just counts the people who tell the government information getters that they're still looking for jobs.

And we know now that there are, at last report, 1.4 million people who've been out of work so long that they've run out of unemployment benefits, even though the government is paying unemployment benefits for up to 99 weeks because the recession was so severe.

INSKEEP: And if we do the math on 4.3 million people, plus the other people who aren't talking to the statisticians anymore, basically, I mean, we're talking -and you multiple that by their families - this is tens of millions of people who are affected for years.

Mr. WESSEL: That's right. That's right. I mean, basically what happened is, we dodged another Great Depression, but we're left with what looks like a very long period of stagnant employment and lots and lots and lots of people who are out of work, out of the workforce. And some may never come back.

INSKEEP: Now, you mentioned 99 weeks of unemployment - up to 99 weeks in some cases. Are those unemployment benefits, in any way, discouraging people from looking for work?

Mr. WESSEL: Well, yes. Probably some people are picky about jobs because they can get unemployment compensation. That's just natural. But there's every reason to believe that that's a relatively small number of people.

And that the big problem in the economy is that there are more job seekers and not enough jobs. The government data suggests that there's five unemployed people for every job opening at the moment. So it's a small factor, but we know what direction it goes.

INSKEEP: And we should stress, I mean, unemployment benefits, this is not a huge check for a lot of people. This is less than they would be making if they were working in a decent job.

Mr. WESSEL: Absolutely. It often averages about $300 a week. It's keeping a lot of people alive. And for most of the people collecting benefits, I believe that they would rather be working if they could find a job.

INSKEEP: Does this become a permanent problem, David Wessel, for people, even after the job situation improves? By which I'm asking, are there people who are going to have trouble readjusting to the workplace once the opportunities come back?

Mr. WESSEL: Yes. History suggests that's exactly what's going to happen. After you've been out of the job market for a year or two, you tend to be unattractive to employers. Your skills atrophy. You have medical problems. You get depressed.

We may be creating a cadre of unemployed workers - something that we really haven't seen in the United States for a long time, but which was common in Europe, earlier. And that's really the biggest worry, right now, about just how severe this problem is.

INSKEEP: You mean creating a permanent problem here?

Mr. WESSEL: A permanent problem - people who are in their 40s and 50s who never, ever go back to work.

INSKEEP: David, thanks very much.

Mr. WESSEL: You're welcome.

INSKEEP: David Wessel is the Wall Street Journal's economics editor. And we will continue to give you more as we learn tomorrow's government unemployment report.

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