Last month, the average length of time people remain unemployed fell to a record low. That sounds like great news, but it’s probably not.
Duration of time unemployed steadily declines
According to the Bureau of Labor Statistics jobs report last week, the average length of time that people remained without work dropped to 35.3 weeks in the first month of 2013. That was a decline from December’s 38.1 weeks, which itself was a drop from the 40.2 weeks seen in January 2012.
The number of people who have been unemployed for half a year or more also fell, according the jobs report. That rate was 38.1 percent in January. It has not been below 40 percent in three years.
But hold on…
The reason for the declines, however, as CNN pointed out, may just be in the way the duration of unemployment is measured, and may not indicate that more people are returning to work.
The federal government measures unemployment by the number of claims filed for unemployment insurance. To keep those benefits coming, an applicant must be actively seeking employment. The reason the duration of unemployment has fallen may have more to do with people giving up the search than that they actually found employment.
Adam Hersh, an economist with the Center for American Progress, said, “People are getting frustrated and are giving up.”
Unemployment benefits usually last for 73 weeks, but that number varies by state, depending on its unemployment rate. Last month, several states had upticks in their employment rates, reducing the length of benefits for many.
However, there has been no corresponding increase in employment on the federal level, as was indicated by the increased rate of unemployment seen in January’s report. Therefore, analysts believe the decreased duration of unemployment likely doesn’t indicate a healthier job market.
An argument to continue extended benefits
Some believe that unemployment benefits keep people from accepting work and, therefore, feeds unemployment. However, since, according to CNN, the declining stats described above indicate that those unemployed for six months or longer are still unable to find work or have giving up the search out of frustration, they do not support the idea that the entitlement breeds freeloaders. CNN maintains this is an argument to keep or even lengthen extended unemployment benefits.
“The benefits are not holding them back from taking jobs,” Dean Baker, co-director of the Center for Economic and Policy Research, told CNN.