Wall Street Journal: Even Brief Unemployment Can Have Long Consequences
The gloomy March jobs report from the Department of Labor includes this ominous figure: almost 500,000 Americans dropped out of the labor force, a phenomenon that picks up as people go months and even years without finding work.
But even short-term unemployment upends a family’s life. Without a paycheck to count on or benefits to cover healthcare, a visit to the doctor becomes prohibitively expensive, kitchen-table conversations about money replace meals out at restaurants, and the daily cycle of working and earning is put on hold.
Those disruptions are felt long after a person goes back to work, according to new research. Families where one member went through even a brief bout of unemployment between 1999 and 2009 frequently spent down assets saved for retirement or their children’s education, or took on debt, compromising their long-term economic security and mobility. These families were about 30% more likely to suffer a loss of wealth during the decade than other families, according to an analysis of data from roughly 3,000 families by the Economic Mobility Project of the Pew Charitable Trusts.
- Economic Mobility Project