US / The unique importance of UI for today’s unemployed workers

Today’s labor market provides the strongest case for extending UI benefits. It has always been harder to find work the longer you are unemployed, but the situation facing today’s workers is exceptional. No matter how long a worker has been unemployed, the odds that they find a job are far lower than before the Great Recession. Furthermore, the odds of experiencing long-term unemployment are highly related to losing a job in a particularly hard-hit industry, like construction or manufacturing, and are disproportionately concentrated in certain distressed states.

Figure 1 below shows the likelihood of finding a job as measured in the monthly Current Population Survey data. The chart shows the probability of leaving unemployment for employment in each month. These rates are at exceptionally low levels. The odds that an unemployed worker found a job each month fell from 28 percent in 2007 to an average of 16 percent during the last three months of 2009. In 2013, the average job finding rate was still 30 percent lower than the average from 1990-2007.

Why is the job-finding rate so low? The basic reason is that job openings remain depressed and there are a lot of unemployed workers competing for those jobs. The number of job openings fell by more than 40 percent between 2007 and 2009 and is almost 15 percent lower between 2007 and 2013. As a result, the number of unemployed workers per job vacancy surged, as Figure 2 illustrates.

In 2007, there were 1.6 unemployed workers for each job vacancy; that ratio increased to nearly 6.7 unemployed persons per job opening at the peak of the crisis. At the end of 2013, there are still nearly three unemployed workers per job, roughly twice the pre-recession level.

Chosen excerpts by Job Market Monitor. Read the whole story at 

via The Importance of Unemployment Insurance for American Families & the Economy: Take 2 | Brookings Institution.