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Saturday, November 12, 2016

Update on Unemployment and Long Term Unemployment

Following the 2015 and 2016 layoff waves at Intel Corp. we have all become aware that layoffs have a long lasting effect on the workforce. Statistics maintained by the Bureau of Labor and Statistics (BLS) demonstrates the long lasting effects of economic upheavals (recession) and the growing trend for longer periods of unemployment, following layoffs. The chart below shows that as of October 2016 about 25% of those laid off during 2016 have been unemployed for 27 or more weeks. The chart also demonstrates that long-term unemployment became significantly higher since the recession that followed the housing bubble burst in 2008. It looks like due to the limited capacity of the economy to expand we may not reach the 15% median in a long time, barring complete restructuring of the economy.

Long Term Unemployed vs. Total Unemployed
Note that one out of four people (25%) who lost their jobs in 2016, will face unemployment for 27 weeks or longer.  According to the chart below, approximately 3,000,000 people experienced a permanent job loss at different times, during 2016.
Job Losers by Layoff Status
With an average of more than 2,000,000 people being laid off for 27 weeks or longer (during 2016), according to the chart below, it is clear that many more people have exhausted or will soon exhaust their unemployment insurance benefits, which are typically granted for only 26 weeks. Unless these people have substantial savings at their disposal, they are likely to default on their rents, mortgages, and debt payments and eventually fall into poverty if they cannot find replacement employment.
Duration of Unemployment
The charts below show the September 2016 unemployment rates for States in which Intel Corp. maintains significant facilities (Arizona, New Mexico, and the three West Coast States). The national average, for the last 36 years is marked on the chart as a grey line. Periods of economic recession  are shaded in grey.

Although the general trend is for unemployment rates to go down from the highest levels of 2009-2012, the 2016 numbers seem to be bucking this trend.

Arizona

California

New Mexico

Oregon

Washington
You can click on any of the above charts to enlarge the detail level.

Comments are welcome.

--Dr. Flywheel

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