For long-term unemployed, outlook’s never been bleaker

DENVILLE, N.J. — The phone begins to ring at 8 a.m. with incessant calls from creditors. Kevin Meyer has stopped picking up because he’s sick of explaining the truth: that there’s no money coming in, so he can’t pay his bills.

Two years ago, Meyer, 51, had a six-figure salary, a sizable 401(k) and the knowledge that he could support his wife and daughter. But he lost his job as a spokesman for a car rental company, and though he soon found another position, he was downsized again four months later.

Unemployment benefits checks helped him pay for health care for his family as he looked for work, but like 1.3 million Americans across the country, his federal unemployment benefits ran out Dec. 28. Congress has considered extending the benefits, but last week, Republicans blocked a Senate proposal to do so.

Meyer, jobless since December 2012, lives in New Jersey, a state second only to Rhode Island for the highest rate of long-term unemployment — people who have been out of work for six months or longer — according to an annual average compiled by the Bureau of Labor Statistics.

He has stopped making payments on his mortgage, home equity loan and credit cards. He has dipped into his 401(k) to pay for food, gas and the Internet. His family lives without health insurance; they’re in the midst of applying for Medicaid.

The Great Recession technically ended in June 2009, but for millions of Americans like Meyer, the hardships continue. At the end of 2013, about 3.9 million Americans had been unemployed six months or longer.

The problem is especially persistent in New Jersey, where nearly half of the jobless have been out of work for six months or more; 80,000 saw their benefits cut off Dec. 28. In New Jersey and Nevada, the long-term unemployment rate is 3.9 percent; in California, the state with the next-highest rate, it’s 3.7 percent.

Work has been hard to find in New Jersey because the state’s job growth is slower than that in much of the nation, said Patrick O’Keefe, director of economic research at the financial firm CohnReznick, who focuses on New Jersey. The state has 2.8 percent more jobs than it had at its low point during the recession; the nation, on the other hand, has 5.8 percent more jobs than it did at its low point.

That’s partly because some of New Jersey’s biggest industries, including pharmaceuticals and manufacturing, have downsized significantly. The state has lost 20 percent of its manufacturing jobs — 68,000 — since December 2007.

About 6.5 percent of the state’s mortgaged homes are in foreclosure — the second-highest rate in the nation. The unemployment rate in the state dropped to 7.3 percent in December, from 7.8 percent the month before, but mostly because people had given up looking for work and left the labor force.

The odds of finding a job decrease the longer people are out of work. A person out of work for eight months will get called for an interview half as often as someone who has been out of work for just one month, even if the resumes are the same, one study has indicated.

In late January, President Barack Obama said he was taking steps to help get the long-term unemployed back to work. At a news conference, he said he had secured commitments from about 300 companies that they would not to discriminate against the long-term unemployed when hiring. He also said he was creating a $150-million grant program for nonprofits that help the long-term jobless get back to work.

Meyer is still hopeful he’ll find employment. Every morning he goes to a friend’s office, where he spends the day applying for work. He’d prefer a job in his field of corporate communications, but he’s open to working as a security guard, a secretary — really, any paying job.

“If someone told me I could get some decent wages and get some benefits doing anything, I’ll do it,” Meyer said.

The extension of jobless aid, which has been debated in Congress throughout the economic recovery, takes on added importance this year as both Democrats and Republicans try to position themselves ahead of the midterm election as both fiscally prudent and sympathetic to the needs of America’s less fortunate.

Republicans say that cutting off benefits forces people to take jobs they otherwise would turn down, and saves the federal government billions of dollars.

Democrats say the economy is still too slow for any sort of cuts.

The issue got trickier for Republicans this year when jobs numbers released by the government showed anemic growth in December, bolstering the Democrats’ stance.

“It’s quite out of the ordinary to cut off these benefits in such a weak labor market,” said Lawrence Katz, a Harvard University economist who has studied unemployment benefits.

But Alex Brill, a research fellow with the American Enterprise Institute, argues that the government has extended unemployment benefits for so long that the program has turned into a short-term welfare program. He says the government needs to try something new, like helping people relocate to places that have more jobs.

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