FOR IMMEDIATE RELEASE:
Tuesday, July 16, 2002

CONTACT:
NELP: Jason Dring, (202) 518-8047
EPI: Karen Conner or Stephaan Harris
(202) 775-8810

PRESS RELEASE

WASHINGTON, DC-Long-term unemployment in the US is worse now than it has been during the past four recessions, according to a report released today by the National Employment Law Project (NELP) and the Economic Policy Institute (EPI).

The report, Time to Fix the Federal Extended Benefits Program, shows that the number of people unemployed for half a year or longer has grown faster and to higher levels than during the four most recent recessions. As hundreds of thousands of workers exhaust the 13 weeks of extra federal unemployment insurance (UI) benefits authorized by Congress in March, the report calls for policy makers to reform gaps in federal extended benefit programs.

“Long-term unemployment levels now exceed any recent recession, and the rates are spiking upward faster than we’ve seen anytime in the past two decades,” said Jeffrey Wenger, co-author of the report and labor economist at EPI. “This recession has masqueraded as brief and mild, but it has been a real monster for hundreds of thousands of workers.”

In the current weak labor market, finding a job has become increasingly difficult. As a result, more people have stayed unemployed for longer periods than in past recessions. In June 2002 over 1.67 million workers had been unemployed for more than 26 weeks-the highest level in over eight years. The report compares trends in long-term unemployment during the current recession to previous downturns.

Among its key findings:

• Long-term unemployment has risen faster during the current recession than in any of the five previous recessions. The number of workers unemployed for 26 weeks or more has risen from just under 700,000 in March 2001 to 1.67 million in June 2002 – an increase of more than 140 percent. In June 2002, there were more long-term unemployed workers than at any time in the past eight years.
• For unemployed workers, the recession has been much worse than previous recessions. At this point in the recession, long-term unemployment comprises a larger percentage of the unemployed than in the previous four recessions. In June, one in five unemployed workers had been out of work for more than 26 weeks.

• The numbers of long-term unemployed has yet to peak. During the last recession, long-term unemployment didn’t peak for 19 months. If the same pattern holds true for the current recession, long-term unemployment is likely to continue to rise into next year, well after the current extension to UI benefits expires.

• Given the severity of the long-term unemployment crisis, extended benefit policies are inadequate. As of June 1, over 1.4 million workers were collecting up to 13 weeks of federal extended benefits. Nearly 900,000 of those workers have now run out of benefits even though the labor market shows no signs of lasting recovery.

While hundreds of thousands have already exhausted federal temporary extended benefits, the report also predicts that without changes in federal policy thousands more will be left without benefits in coming months. And despite provisions for workers in states with high unemployment to qualify for an additional 13 weeks, only two states-Washington and Oregon-currently qualify for the program.

“Hopefully, the Administration and Congress will take this data to heart,” said Maurice Emsellem, co-author of the report and Policy Director for NELP. “The report confirms the urgent need for another extension of unemployment benefits.”

“While the Administration maintains that calls for extended benefits are still ‘premature,’ this is no longer a problem we can ignore as we congratulate ourselves for ‘surviving’ the recession,” said Emsellem. “Long-term unemployment has reached record levels and the federal program of extended benefits has failed to respond to the needs of the long-term unemployed. Now is the time to address the gaps in federal policy.”

The report offers a series of recommendations for policy makers, including extending benefits and overhauling the measure used to determine if states qualify for extensions. Last week Senator Clinton and Congressman Rangel introduced legislation that would extend benefits for an additional 13 weeks for all states.

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To receive a copy of the report or to speak with one of the authors of the report please contact Jason Dring at 202-518-8047 or jason@publicinterestpr.com.

National Employment Law Project (NELP) is a policy and legal advocacy organization concentrating on issues affecting low-wage and unemployed workers. NELP is based in New York City. For more information about NELP, visit its web site at www.nelp.org.

Economic Policy Institute (EPI) is a nonprofit, nonpartisan research organization that seeks to broaden the public debate about strategies to achieve a prosperous and fair economy. The Institute stresses real world analysis and a concern for living standards of working people, and it makes its findings accessible to the general public, the media, and policy makers. For more information about EPI, visit its web site at http://www.epinet.org.