We are all aware that money is tight for a lot of people these days, but somehow when the actual statistics come out it can still be quite shocking. A recent article by the Associated Press reports that over 20 million people in the US received unemployment benefits over the year 2009. The unemployment rate for the year reached a whopping 10 percent. It is easy to see why sales of many products are way down when one in every 10 people is out of a job.

It has been a Drawn out Struggle for Some

While there are not as many workers being laid off or let go as there were in recent months, many employers are still reluctant to re-hire until they see a dramatic upturn in the economy. Some who have lost jobs have been fortunate and found work again, even though some of them find themselves in new jobs that aren’t optimal. Lifestyle adjustments are often required, and people who have taken on casual jobs just to stay employed should feel lucky to find work at all. Among those that are jobless, 5.8 million were unemployed for over six months. This circumstance can take a toll not only on the pocketbook, but also on a person’s pride.

The Vicious Cycle

With so many people out of work or working low paying jobs, there is little money being spent. Businesses relying on sales of some sort are struggling to get customers. They can’t hire any more people, because they can’t make enough money to pay them, and they are forced to keep an eye on longevity instead of hiring a few more people in the here and now. Also, the government stimuli are beginning to run out, so there is less money for businesses to work with. Consumers are unable to spend, and companies are unable to hire, which makes the economic crisis geared for a longer period of time.

Just how Long will the Crisis Last?

The unemployment rate is showing signs of declining, but not at a speed that most of us would like to see. Experts are estimating that within a year’s time the rate will be above 9 percent, slightly down from the current 10 percent. With such a scarce job market the government has been forced to extend the term of unemployment benefits beyond the usual 26 weeks several times in 2009 and will likely have to continue to do so, otherwise millions of people will be left with even less to spend.

Job Competition is Fierce

If you are one of the many Americans who is unemployed and looking for work the odds are definitely not great. It is estimated that for every open job there are six unemployed candidates. There obviously are other people to consider. This doesn’t include people that are employed but looking for full time or better paying opportunities.

Try to Remain Positive

It can be tough to stay optimistic is such trying times. Taking a casual job can be humbling, but take comfort in that you are at least working. Try to think outside the box. If you have skills for freelance work, this is a good time to put them to use. Companies are far more likely to offer freelancers work than regular employees in tougher times. The internet has a lot of opportunities open online.

Today, the unemployed sector cuts through a very broad cross-section of the country. Since late 2007, some 8 million jobs have vanished, and the end is not yet in sight. The ranks of the unemployed have now swelled to nearly 16 million people.

In the past, recessions have mostly hit blue collar and low level retail jobs, and white collar layoffs accounted for about 30 percent of job losses. By contrast, the current recession has seen 50% of the lost jobs be from managerial, professional, and skilled white collar positions. Workers in the upper echelons that are scrambling for cash now, the current recession has changed the world overnight.

Who has been hardest hit?

Past recessions hit minorities the hardest, and this hasn’t changed. According to current Labor Department statistics, the nationwide unemployment rate in November was 10%, but joblessness among African-Americans, for example, was 15.5%. Interestingly enough, the unemployment rate for men is 11.9%, compared to 8.1% for women, the widest unemployment gender gap in more than half a century. Older workers are being laid off at a faster rate than younger workers.

Are unemployed people finding new jobs?

The unemployed are staying that way for unusually long stretches of time. Almost 25% of jobless people have been unemployed for over 6 months, the highest long term unemployment level since the Great Depression. That 25% long term unemployment figure doesn’t include “discouraged workers” – people who have given up, and those who have settled for part time work. In hard-hit regions of the country, long stretches of joblessness coincide with elevated suicide rates, mounting depression, and family conflicts.

But aren’t layoffs cyclical in a recession?

In most recessions, job losses are from temporary contractions from industries and bussines producing more goods and services than can be absorbed. Losses, therefore are cyclical in nature. Typically, businesses lay off employees until demand picks back up, and then start hiring again. The current economic downturn, however, is more foundational; that is, some industrial segments appear to have undergone permanent shrinkage – home construction, vehicle manufacturing, and newsprint publishing, for example.

New-home construction busts amid the housing crisis across the country have shifted many construction-worker families from affluence to poverty, or at best, survival mode. It’s difficult to believe that home construction industry will ever see boom years again. For that matter, there’s no reason to suspect that vehicle manufacturing will ever return to a glorious era of unthinking tunnel vision, or that two-inch-thick newspapers will ever again grace the breakfast table of every American home.

How do long term unemployment sufferers get by?

They sell off cars, get rid of extra phones, cancel health club memberships, and bid vacations farewell. They scrounge for any income they can find. Most workers who qualify for unemployment pay receive about 60% of their former wages, but unless Congress extends their benefits, they expire after 26 weeks. But even unemployment benefit extensions eventually expire, at which point people may become eligible for welfare benefits and food stamps. A family of four might get $ 900 monthly, which can’t cover even basic costs like food, housing, and health care. From there, without family or friends to help, it’s a short jump to soup kitchens and private charities. Those experiencing long term unemployment face prospects that are grim.

Will new jobs be created?

It’s an unanswered question. Some politicians are anxious to spend more to salvage shrinking industries, but that’s more of a stop-gap than anything. And there is talk of replacing shrinking industries like vehicle manufacturing with “green” industries that will create a new economic boom, but turning such talk into reality would require billions in private or government investments as well as more years than today’s unemployed population can even hope to live. Not all displaced workers can learn new skills quickly. And even for those who can, chances are good that they won’t be returning to any semblance of their former pay. This is especially true for older workers or those who have extensive experience in specialized fields.

Will current job losses become permanent?

It is a sad thing to admit that many people who have lost jobs in the past year or two may never return to their former occupations or ever again reach their former income levels, but there seems to be no immediate way to avoid such a conclusion. Barring the unforeseeable, like a whole new economy arising, we are likely to have an unprecedented recessionary shift to permanent job losses.