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Amid Healing Labor Market, Long-Term Unemployment Still Dire

U.S. News & World Report (12/16/13) Danielle Kurtzleben

The recent budget deal agreed upon by Congress does not extend long-term unemployment benefits. The unemployment rate stands at 7.0%, and the share of those unemployed who have been without a job for more than 27 weeks is 37%, a higher rate than seen before the recession. This has declined from 46%, but is still far above the nearly 26% seen in the post-recession 1980s.

The loss of long-term unemployment benefits will affect 1.3 million people immediately, and another 3.6 million by the end of 2014. Economists are torn over the effect of long-term unemployment insurance. Some suggest that it benefits workers by allowing them to find jobs that match their skills; others note that it removes incentives for workers to find employment. In a study published earlier this year, employers said they preferred workers with little or no experience over experienced workers with a long period of unemployment.