Wall Street Journal (01/09/12) Casselman, Ben

While the U.S. job market is showing signs of a sustained recovery, the nation’s prolonged struggle with unemployment will leave scars that are likely to remain for years. The crisis has exposed problems in the U.S. labor market that will not quickly recover when the economy eventually rebounds, and the longer that unemployment remains high, the greater the danger that it will create structural problems that will endure.

With approximately 5.6 million Americans having been out of work at least six months, and 3.9 million of them for a year or more, long-term unemployment may be the biggest problem. Research shows that the longer people are unemployed, the less likely they are to find jobs. Economists say the risk is that the U.S. will develop an underclass of semipermanently unemployed workers, with severe consequences for productivity, public finances, and social stability.

The U.S. labor market has over the past two decades lost much of the edge it enjoyed over other developed countries. Americans are moving less frequently and changing jobs less often, making the job market less flexible. Also, a smaller share of Americans are working, as the labor force participation rate has been falling for more than a decade.