Job Prospects Remain Dim for Millions of Workers

The unemployment rate for adult men hit 10.3 percent in September, higher than at any point since the end of World War II, writes Heather Boushey.

The economy shed 263,000 jobs in September, for a total of 7.2 million jobs lost since the recession began in December 2007. The Bureau of Labor Statistics also revised its employment estimates downward for July by 28,000 jobs and for August by 13,000 jobs. The pace of job losses has slowed since last winter, but it remains high: the economy has shed 4.2 percent of its jobs over the past year, a higher pace of jobs losses than in any recession since the late 1950s. And the unemployment rate inched up to 9.8 percent in September, from 9.7 percent in August.

The American Recovery and Reinvestment Act has pumped nearly $90 billion into the economy already and more is coming down the pipeline. These dollars are critical to helping get unemployed workers get back to work. A key piece of this legislation was extending benefits to the long-term unemployed and without these dollars, the situation for the unemployed would have been much worse.

Share of unemployed workers who are long-term unemployed by year

BLS reports that job losses are even worse than initially estimated. Their preliminary estimate for the March 2009 benchmark revisions, which they will finalize with the publication of the January 2010 release, shows a downward revision of 824,000 additional jobs lost as of March 2009—a 0.6 percent increase in reported jobs lost. Most of the additional job losses occurred during the winter of 2009, and the largest additional job losses were in trade, transportation, and utilities (an addition 282,000 jobs lost); construction (152,000 more jobs lost); and professional and business services (111,000 more jobs lost). Benchmark revisions typically only change job loss numbers by around 0.2 percent, so if this preliminary estimate holds, this is an exceptionally large downward revision. The larger preliminary estimated revisions are due to a higher rate of business failures than the BLS model had predicted.

Construction and manufacturing continued to lead other industries in shedding jobs in September, but government and retail trade also saw significant job losses last month. Construction shed 64,000 jobs and manufacturing shed 51,000 jobs, both less than the pace of job losses last winter. Retail trade also shed 39,000 jobs last month. This is more than the average jobs lost since April of 29,000 per month. Government shed 53,000 jobs in September, 37,000 of which were in local government. This is the fifth straight month of job losses in the government sector.

The pace of job losses has slowed considerably from the winter, but job prospects for the unemployed are increasingly more dismal. There are now 15.1 million unemployed workers—twice as many as at the beginning of the recession and more than at any time since BLS began keeping tabs on the number of unemployed in 1946. There are six workers seeking a job for every job opening.

A record share of those out of work are “long-term unemployed”—more than one-third (35.6 percent)—which means they have been out of work and searching for a job for at least six months. Prior to this spring, the share of the unemployed who were long-term unemployed had never risen above 26.0 percent.

Share of unemployed workers who are long-term unemployed by year

The typical unemployed worker has been out of work and searching for a job for 17.3 weeks, which means that one half of workers are finding a job in less time, but one half are taking longer—often much longer—to find a new job. The median number of weeks searching for a job remains at record high levels, going back to 1964. The peak prior to this recession was in December 1982: The median worker was unemployed for 12.3 weeks at that time, and unemployment stood at 10.8 percent—a full percentage point higher than today.

A record 10.4 million of those who are unemployed are out of work because they lost their job. The remaining one third of the unemployed are either new labor market entrants, such as high school and college graduates just starting to look for work for the first time, or those re-entering the labor force, such as a former stay-at-home mother trying to get back into the workforce.


Millions of Americans have simply given up on finding a jobs. There are 1.5 million discouraged workers, with more men than women giving up their job search. There were 478,000 men and 228,000 women who reported having given up their job search in September 2009 because they were so discouraged—more than a two to one ratio and a higher gender disparity than at any time since BLS began monitoring discouragement in 1994.

The job losses in this recession have had an uneven impact on men and women, but women’s job losses are beginning to mount. Since the recession began through August 2009, men have accounted for 72.3 percent of the total payroll jobs lost. This is largely due the fact that half of the job losses have occurred in construction (20.6 percent) and manufacturing (28.6 percent), which both disproportionately employ men. But government and education, which disproportionately employ women, have in recent months begun shedding jobs, and women’s job losses are accounting for an increasing share of the total.

The share of the U.S. population with a job was 58.8 percent in September, lower than at any time since 1983. The share of adult men with a job fell fourth-tenths of a percent last month to 67.0 percent. Prior to this recession, the share of adult men with a job had never fallen below 70 percent. The share of adult women with a job fell three-tenths of a percent to 55.8 percent, a low not seen since 1994. And women’s unemployment rate moved up two-tenths of a percent to 7.8 percent, a 26-year high.

Falling prices mean that those workers who are employed are seeing real wage growth. Hourly wages grew by one cent in September and the average quarterly rate of annual wage growth was 2.5 percent. From August 2008 to August 2009, the nation’s consumer price index—urban wage earners and clerical workers—declined by 1.9 percent.

Focusing on the long-term unemployed is urgent because challenges remain significant for those out of work—more so than in any prior recession. More than 400,000 workers will exhaust their unemployment benefits this month. And an additional million will exhaust their long-term benefits by the end of the year. The House of Representatives passed last week HR 3548, which extends benefits to the long-term unemployed, but the Senate has yet to move on its companion bill, S. 1647. Both bills would extend key provisions for the unemployed from the recovery package, which will expire at the end of December, as well as add an additional 13 weeks of benefits on top of the additional weeks that were in the recovery package for some states.

Providing benefits to the long-term unemployed helps workers avoid hardships and provides the “biggest bang for the buck” in terms of economic stimulus. Extending benefits to the long-term unemployed will help the economy recover by pumping dollars into communities hard-hit by the recession.

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Heather Boushey

Former Senior Fellow