What are the implications of the long-term unemployment rate for the U.S. Economy?
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The major implication of long term unemployment is that it means the US economy has or will have a large number of workers whose skills are poorly matched with the jobs that exist in the country at this time.
Chances are that people who are unemployed for a long time are structurally unemployed. This means that their skills are no longer demanded by employers in the US. Structural unemployment is particularly challenging for an economy because it implies a need for workers to learn new skills. Learning new skills is especially difficult for people who have been in the work force a long time and may have difficulty in getting training for new jobs.
Thus, the presence of long term unemployment implies that there are many workers whose skills are no longer needed in our economy. This is problematic because it means that either A) we need to bring back the sorts of jobs these people can do or B) we need to get these people trained for existing jobs. Neither of these is particularly easy to do. Therefore, a high rate of long term unemployment implies that there is a fundamental weakness in the US economy.
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