We faced severe unemployment rates during the Depression, The Great Recession, and amid the 2020 Pandemic. These all led to long-term unemployment for many.
This is the result of a failure or redundant skills no longer being needed in the workplace. Learn how to deal with chronic unemployment and what to do if you are made unemployed. But first, we should explain what long term unemployment is.
What is long term unemployment?
The Bureau of Labor Statistics (BLS) defines long-term unemployment as people who have been jobless for more than six months.
They found the effects of this on men’s careers and concluded that approximately 22% of men experienced at least one period of long-term unemployment during the course of their lives.
Meanwhile, the Urban Institute found that while women comprise 47.1% of the overall workforce, they account for 45.2% of the long-term unemployed.
In addition, studies by the Economic Policy Institute have also shown that while college graduates have decreasing long-term unemployment rates, they are not entirely unaffected.
Being unemployed can take a toll on your finances. There are steps you can take and programs you can participate in to mitigate the consequences.
This text will provide more information about what you need to be doing if you have been affected by chronic unemployment.
Types of long term unemployment
In addition to the long-term unemployment rate and those who are affected by it, there are also important details to know. For example, the types of long-term unemployment that exist. Here are a number of common ones.
Cyclical unemployment
Cyclical unemployment is closely tied to the economy. If a job is lost due to the state of the economy, it is known as cyclical unemployment.
For example, many people lost their job as a result of the COVID pandemic due to cyclical unemployment.
Structural unemployment
Structural unemployment happens when workers’ skill sets become obsolete due to technological developments or changes in industry that make their role obsolete.
This is particularly problematic for experienced professionals.
Institutional unemployment
This occurs when individuals lose their jobs because of government and societal changes. For example, new laws and social benefits programs may increase institutional unemployment.
Short-term unemployment
There are different degrees of unemployment, resulting in short or long term unemployed individuals. Short term unemployment is difficult to determine, but it is usually people who have been unemployed for less than half a year. Following this time period, long-term programs will begin.
What to do if you are unemployed long term
Depending on the cause of unemployment, there may be several options open to you during this time that you are unemployed long term.
File for unemployment insurance benefits
State unemployment benefit programs are state-run programs. Eligibility and duration of the unemployment benefit program vary by state for residents.
For example, in Alabama, the maximum weekly benefit is $275 and covers up to 26 weeks while North Carolina benefits may only be claimed for 12 weeks for $350 a week.
New Jersey offers one of the broadest programs of up to $713 per week for 26 weeks.
Only about half of the states currently have fully funded unemployment insurance benefit programs and roughly 50% are underfunded.
Unfortunately, there isn`t a cure for those who have been laid off for a longer period of time than their state`s unemployment benefits cover. Such states often provide additional or extended benefits when there is high unemployment.
It can be extremely difficult to apply for and qualify for unemployment insurance in some states. An online-only application has led to a greatly increased number of individuals being able to receive unemployment benefits.
With that in mind, if you are eligible to apply, make sure that you have all of the necessary materials.
Common documents needed are:
Check your state’s Department of Labor website for a list of required documents.
*Be sure to respond to any questions asked of you regarding why you may be unemployed for the long term. Under no circumstances use the word “fired”; it is inappropriate if you were fired due to something you did incorrectly. General suggestions are **Use, **lay off, and **dismiss.
Determine what healthcare coverage you qualify for
While your unemployment continues, you will need health insurance. Consolidated Omnibus Budget Reconciliation Act benefits (COBRA) can be an option but can be expensive. COBRA allows you to maintain your employer-sponsored health insurance plan for a temporary time.
Check if your local Marketplace has healthcare coverage. You can access this through Healthcare.gov or by consulting your local Marketplace. If you qualify, you might obtain lower Marketplace insurance.
Medicaid may be an alternative. It provides health insurance to lower-income families. It is important to keep in mind that eligibility for the preppers program is contingent upon your household income and the size of your household.
Medicare is available for people with disabilities or those aged 65 or older.
Find out your disability insurance eligibility
If you are unable to work because of illness or injury, you might be able to qualify for long-term disability insurance.
Remember that you can only apply for long-term disability benefits or unemployment benefits, but not for both. This depends on the kind of disability insurance you have. If you have any, you will not be eligible.
Look into worker’s compensation
If you were hurt or injured while at work you might qualify for workers’ compensation, a type of insurance benefit that employers typically pay.
You can initiate legal action against a workplace for work-related injuries or diseases without filing a lawsuit.
Research other government benefits
Federal aid programs help low-income individuals cover living expenses such as healthcare, housing, and food.
For instance, if you haven’t been able to find employment to cover your expenses you might consider applying for TANF (Temporary Assistance for Needy Families.)
These programs are designed to help you regain your independence. Although government-funded, they vary by state.
An excellent place to start your research is on usa.gov/benefits.
Key steps to take if you become unemployed
Your first reaction after losing a job might be to see what the long-term unemployment rate is or begin looking for a new one. But there are other steps to take that might ease your worries as well.
Apply for unemployment as soon as possible after you become unemployed. This is an excellent first step. However, there are other ways you can help during this difficult time.
1. Review your expenses and cut back where possible
If you are unemployed indefinitely, inspect your expenses and try to minimize them as much as possible. Pay particular attention to subscription services and any miscellaneous expenses. Find out what items you can temporarily do without until you are no longer a job seeker but employed.
Budget any savings you have in an account and see how much you can afford to cover and for how long. Make extreme cuts to housing, food, and transportation expenses.
As an example, you can reduce your grocery bill by planning your meals. Now is the time to trim spending to the bone.
2. Communicate with lenders and creditors
It is important that you get into contact with your lenders if you are unable to pay your bills. Call loan companies and ask for repayment plans or deferments. They may have financial aid programs that you can join.
However, it is important that you are mindful of the fine print. In particular, fees must be carefully calculated.
3. Tap into your personal and professional network
Long-term unemployment is a good time to reach out to your contacts and network. If it’s been a while since I last searched for a job, this is also a good time to update my resume and increase my odds of getting a job.
Obtain recommendations from former managers. Ask former supervisors or coworkers if they can refer you to positions. Put time on your calendar each day for work hunt and networking.
You can also earn extra income in this day and age by finding side work. You can consider freelancing or taking on a gig.
Living with a roommate
Remember that you are not alone. Long-term unemployment is not a concern anyone anticipates, and it can happen to anyone.
Long term unemployment is a setback but there are opportunities out there
A lack of job opportunities can be very frustrating for your long-term career. Long-term unemployment statistics can cause you to feel hopeless and lead to a loss of confidence.
Relationships and friendships can be affected. And the emotional and psychological impact of being unable to achieve your career goals can leave you feeling discouraged.
However, you can still find opportunities during long-term unemployment. You can gain experience developing your skills or learning new ones that could help you get a job. Use your time and energy to maintain your mental state fit.
It’s also important not to isolate yourself from others and to reach out to supportive friends and family during this time. Journaling, meditation, or prayer can help one attain inner peace and gratitude, even during the most serious of circumstances.
