Losing a job is tough no matter what. Add a pandemic into the mix, and now millions of Americans are out of work for months at a time, creating a surge in long-term unemployment.
For most out-of-work folks, it’s taking about 21 weeks to find a new job, according to the latest data from the Bureau of Labor Statistics. But for a record-breaking number of Americans, good replacement jobs are scarce, and it’s taking them much longer than that.
Even as the overall unemployment rate drops each month, large sectors of the economy such as hospitality, events, performing arts, and many others haven’t rebounded.
Some time between jobs is to be expected since you’ll want to find a good match. But once you’re unemployed for such a long period of time, it can have a cascading effect.
“In general, the longer somebody is unemployed, the harder it is for them to find new work,” said Michele Evermore, a senior policy analyst at the National Employment Law Project.
Harder, but not impossible. Experts say no reasonable hiring manager is going to hold coronavirus-related unemployment against you. However, the economic situation might put you into some fierce competition on the job hunt.
We’ll cover exactly what long-term unemployment means and what you can do to recover if you find yourself in that situation.
What Is Long-Term Unemployment, Exactly?
The phrase “long-term unemployment” is often used colloquially to describe any extended period of time that you’re out of a job. But the term has an important technical meaning, too. The Bureau of Labor Statistics defines long-term unemployed people as those who have been jobless for 27 weeks or longer — while actively searching for work within the last four weeks.
The BLS uses this definition to track trends in long-term unemployment, and lately the metric is surging due to the pandemic.
“The number of long-term unemployed workers grew from 1.6 million in August to 2.4 million in September — the largest month-over-month increase ever recorded,” Evermore wrote in an recent report.
October didn’t look much better. The latest employment report shows that number increased by another 1.2 million, bringing the total of long-term unemployed Americans to 3.6 million.
In other words, one third (32.5%) of all unemployed Americans have been out of work for six months or longer.
Effects of Long-Term Unemployment
The consequences of losing a job for any amount of time can be wide-ranging and devastating.
But in some cases, being unemployed for an extended period of time could be to your advantage. According to a recent white paper from the National Bureau of Economic Research, longer and more generous unemployment benefits programs help people find better replacement jobs during a recession.
“We find that UI [unemployment insurance] generosity allows workers to search longer and eventually find jobs better suited to their skills,” the report states.
That’s because looking for and finding the right match takes time.
“You don’t necessarily want people taking the first temporary, low-paying, low-hour job that comes along,” Evermore said. “You want them, if they’re unable to find work, to be in training or to be really actively searching for a good replacement.”
It’s all about striking a balance. Take the first job you see, and it probably won’t be a good replacement. Stay out of work too long, and you might exhaust your unemployment benefits and wind up with a big gap in your resume. That, in turn, could lead to discrimination from hiring managers.
It’s common for employers to disregard your job application if you’ve been unemployed for a long time, according to the employee-rights nonprofit Workplace Fairness. However, because pandemic-driven job losses have affected so many workers, that strand of employment discrimination may be diminished in the current climate, says Executive Director Edgar Ndjatou.
“You’ll see some of that leniency,” he said, noting that employers are likely to have a lot of options for candidates — those with resume gaps and those without them.
So it’s up to you to keep your skills fresh while continuing to search for work, no matter how long it’s been.
In the eyes of government economists, if you stop searching for work for four or more weeks, you’ll be considered a “discouraged worker” and thus no longer part of the labor force. Being excluded from the labor force has little personal consequence, but it can artificially lower the unemployment rate.
In October, for example, when the unemployment rate dropped to 6.9%, that figure did not include discouraged workers. The BLS tracks a different unemployment rate through a lesser known method that includes discouraged and underemployed workers. In October, that number was almost double the official unemployment rate, 12.1%.
In addition, when the official unemployment rate drops, states receive less funding for unemployment benefits programs.
What to Do If You’re Out of Work for a Long Time
After months of applying to jobs with no luck, you may be tempted to internalize your unemployment situation. Remember that there are a lot of economic factors involved here — especially during a recession — that are out of your control.
Here are 5 strategies you can adopt while you’re hunting for jobs.
- Extend your unemployment benefits. If you meet the BLS definition of long-term unemployed, then chances are your state-level unemployment benefits —if you’re collecting them — have expired or are expiring very soon. Emergency pandemic legislation created a federal 13-week unemployment insurance extension that you likely qualify for. Your state may have an additional extended benefits program available after you exhaust the federal extension.
- Seek (free) career services. You don’t have to go through it alone. Several organizations provide career coaching or advice for free. Many Goodwill branches provide pro bono career development and coaching services. And if you’re a college alum, your alma mater may have a career-services department available to you. The Department of Labor runs extensive career advice and training programs as well.
- Experiment a little. While you’re searching for a new job, it’s important to also fill this time with something that will benefit you professionally. Get creative. You could enroll in a course at a local college or online provider; volunteer at a local nonprofit; consider gig work; or take a bridge job or seasonal job.
- Update your resume. You’ll want to show a potential employer what you were doing while you were unemployed. And if you were laid off due to coronavirus-related reasons, make that clear on your resume so the recruiter knows you weren’t at fault for your job loss. Be sure to include any new certifications, courses or temp gigs too. Even if you Ubered a little bit, career experts recommend putting gig work on your resume. If you’re switching industries, you may want to reorganize your resume entirely to highlight your transferable skills.
- Prepare to talk about your employment gap during interviews. Unemployment discrimination can be pretty overt. You will likely be asked about your time out of work directly and possibly even in an accusatory manner. Have an honest, straightforward response ready and highlight any professional developments or skills you picked up during your employment gap.
This was originally published on The Penny Hoarder, a personal finance website that empowers millions of readers nationwide to make smart decisions with their money through actionable and inspirational advice, and resources about how to make, save and manage money.