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article imageLong-term unemployed gets longer, double-dip heats up

By Lynn Herrmann     Jan 4, 2011 in Politics
Washington - The US government’s Bureau of Labor Statistics (BLS) has begun changing its point of view on the true meaning of long-term unemployment and as a result, those faced without work now get a new box to check off.
Beginning January 1, the BLS increased the upper limit on its long-term unemployment form from two years to five years. The move comes as the government agency finally acknowledges “an unprecedented rise” in the numbers of Americans struggling with the bitter reality of an anemic US economy, USA Today reports.
Linda Barrington, director of the Institute for Compensation Studies at Cornell University’s School of Industrial and Labor Relations, and an economist, said the change comes as a result of government officials realizing the severity of the situation. They “are afraid that a cap of two years may be ‘understating the true average duration’ -- but they won’t know by how much until they raise the upper limit,” Barrington said in USA Today.
The lingering recession has dealt a double blow to many Americans. Some have been unemployed for so long that they faced another reality, the loss of their homes. As such, conditions dictated they move in with friends or family members.
This doubling up, or multifamily households, jumped almost 12 percent from 2008 to 2010, according to Census Bureau data (pdf) released in September.
Meanwhile, the New York Times reports that average income in multifamily households in the official records dropped by at least 5 percent from 2009 to 2010. This number is twice the amount as for households overall and indicates many in these multifamily arrangements are in a desperate financial situation.
The average length of time for unemployed Americans has increased drastically over the last few years. In November 2009, that average was 29.4 weeks and a year later had increased to 34.5 weeks. For many Americans accustomed to living pay check to pay check, the reality of a sudden job loss can be too much to overcome.
According to government figures, the US currently has 15.1 million Americans unemployed. Of that number, almost 10 percent have been out of work for two years or longer, USA Today noted.
As a result, with the start of the new year the BLS raised the upper limit to five years on its form connected with the Current Population Survey and is based on interviews conducted with thousands of unemployed Americans. Before the change, the form only allowed one to check off “99 weeks or over.” Now, the jobless can select “260 weeks and over” on the new form.
The old two-year limit had been used for the last 33 years. “The BLS doesn’t make such changes lightly,” Barrington added in the USA Today report.
Compounding these dire numbers, Forbes recently reported a double-dip in the housing market is well on its way, with the closely watched Case-Shiller Index showing a decline greater than analysts had predicted for October.
Single home values in 20 metropolitan areas decreased 1 percent from September to October, the S&P/Case-Shiller Index composite reported last week.
Additionally, those homes currently stalled in the foreclosure process will soon reach the market, forcing even more pressure on plummeting prices. Daniel Alpert, Westwood Capital’s managing partner, said: “The most striking thing about [Tuesday’s] report is that we are seeing a repeat of the price decline patterns that appeared during the 2006-2009 downturn,” according to Forbes.
All is not lost, however. Of the top 500 American corporations, 496 of them realized profits in 2010, thanks to a huge and ongoing shift of their manufacturing bases to Asian-Pacific countries.
The transfer offshore of these American corporations’ manufacturing base has driven, in many cases, their profits to staggering heights while helping fuel the downward spiral the country is currently in.
More about Long-term unemployment, Bureau labor statistics, Double-dip
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