What happens to people when their unemployment insurance runs out and
they still can't find a job?
By Annie Lowrey
WHAT HAPPENS AFTER unemployment insurance runs out? If 2008 was the
year of the financial crisis, and 2009 the year of the recession, then
2010 was the year of unemployment. The good news is that things are
starting to look up, if modestly. The number of workers making initial
unemployment claims—a good indicator of where the unemployment rate is
heading—fell to its lowest level since July 2008 this week. Employers
have started filling more available positions. And economists expect
December's unemployment rate, to be released next week, to be lower
than last month's.
But none of this changes the fact that, by most yardsticks, 2010 was
the worst year for jobs since the Great Depression. The year's average
unemployment rate will clock in at about 9.7 percent—higher than last
year's 9.3 percent and tied for the highest annual rate since the
government started keeping official counts in 1948. For all of 2010,
in any given month, about 15 million Americans—the population of New
England—were looking for work. And, really, in any given month,
moreneeded work. Underemployment—that's the "official unemployed,"
plus people in part-time or temporary positions looking for full-time
work, plus people discouraged from the labor market and no longer
looking—totaled as many as 25 million.
And the recession has not meant just more joblessness. It has also
meant longer joblessness. The average length of a spell of
unemployment now sits at 30 weeks, after hitting a high of 35 weeks in
July. About 6.3 million people, 42 percent of all unemployed
Americans, have been out of work for more than six months. And more
than 1 million have exhausted their unemployment benefits. They're
called 99ers. (The term, coined this year, refers to the maximum weeks
of benefits in the states with the highest unemployment rates.) There
are about 1.6 million of them, according to the Department of Labor.
And they raise the question: What happens when unemployment insurance
There is no reliable way to measure what happens to 99ers, whether
they find work, return to school, remain unemployed, or move on to
programs such as disability and welfare. (The Department of Labor does
not follow the same individuals longitudinally.) But economists know
with a reasonable amount of certainty that their unemployment does not
end when their unemployment insurance does.
The Department of Labor has shared data with the New York Timesshowing
that the shorter the duration of unemployment, the more likely a
person is to get a new job. People who have been out of work for five
weeks have a monthly re-employment rate of about 31 percent. People
who have been out of work for a year have a monthly re-employment rate
of 8.7 percent. Presumably, people who have been out of work for more
than 99 weeks have a re-employment rate somewhat lower than that.
In some states, there are special programs to help keep the 99ers
afloat. But for the most part, they are on their own. Government
assistance becomes thinner, more brief, and more patchwork—food
stamps, assistance with heating costs, welfare for parents with
children, temporary aid. For many people receiving unemployment
insurance, it is the only thing keeping them above the poverty line.
The Economic Policy Institute calculates that unemployment insurance
kept 3.3 million people out of poverty in 2009.
Consider the case of 44-year-old Boston native Rochelle Sevier. After
eight years with Fidelity Investments, mostly as a marketing
executive, she was laid off in October 2008. Given her bachelor's and
master's degrees, longtime work experience, and connections in Boston,
she did not anticipate being unemployed for long. But since then, she
has had only a few temporary positions, including an $8-an-hour gig
selling sweaters for the holidays last year. In September, her
unemployment insurance ran out.
"Literally, from October of 2008 until the fall of 2009, I got no
bites at all," Sevier explains. "I started off applying for good jobs,
but then just started applying for anything—part time, temporary. I
applied for jobs in my field, jobs that were reaches, all the way down
to jobs I never in my life thought I would have to work."
At first, Sevier fell victim to her experience: She was overqualified
for the jobs she was applying for. "I started applying for
minimum-wage jobs, but they said they wouldn't hire me, because when
the economy gets better, I'd leave them." Then, she fell victim to her
own joblessness: Employers just don't like to hire people who have
been out of work for long, she says. "I need a job now, and I just
think that these companies have to stop prejudging us [99ers]. If
anything, they should be hiring us because we have experience—I mean,
I've got a master's—and we'll work harder." So Sevier, like millions
of others, has applied for the aid she can get: food stamps ("I'm so
embarrassed. I never thought I'd have to do that") and heating-fuel
assistance ("It's cold").
Unemployment, she and others explain, eventually becomes more than a
financial issue. The spell of joblessness has strained her marriage.
It forced her to declare bankruptcy, to clear credit-card debt she
felt she would never be able to pay back. She managed to keep her
house after a loan modification, but otherwise might have faced moving
back in with her family.
Like so many other 99ers, Sevier's joblessness has taken a toll on her
health. "I'm going through a really deep depression," she admits. She
wakes up often with panic attacks and has lost weight, "but I'm under
the care of a doctor, at least." Sevier's situation is not unusual:
Unemployment tends to be bad for people, because of increased stress
andreduced consumption of vegetables. And economists have found not
only that unemployment tends to increase the rate of suicide, but that
the loss of unemployment insurance actually has a stronger impact on
an individual's likelihood of committing suicide than the loss of a
And the depressing truth is, though 2011 should be a better year for
jobs generally, there seems to be little help on the horizon for the
long-term unemployed. That is not necessarily due to a lack of
possible solutions. The federal government could create broad
retraining programs or even guaranteed work schemes, as a few European
nations have. But congressional will is weak, and such programs are
expensive. Though 2010 was the year joblessness was the highest, 2011
may prove to be the year that joblessness became intractable—with a
large pool of unemployed, and sometimes unemployable, workers
remaining just outside the otherwise sunnier labor market.