Long after President Barack Obama's first term ends in 2013, millions of U.S. families will still be paying the price for the recession.


A woman talks to recruiters at a Verizon booth during a career fair in Brooklyn, New York April 3, 2009. (REUTERS / Brendan McDermid)

From auto workers in Detroit too old for retraining, to Hispanic migrants in Arizona with no homes to build, to new college graduates competing with experienced workers for scarce jobs, more and more people are facing long-lasting unemployment.

Since the recession began in December 2007, the jobless rate has climbed 4.6 percentage points to 9.5 percent, the biggest jump since the Great Depression. Worse, the mean duration of unemployment is now almost 6 months, the highest on record.

Although Obama frequently points out he inherited the recession from his predecessor, George W. Bush, the fallout will frame his legacy, presenting a quandary for a president elected on a slogan of Yes We Can.

Unless Obama figures out how to repair the job market, the can-do attitude sparked by his election may be replaced by despair, leaving deep economic and social scars that undermine his political goals.


Joblessness typically rises during recessions as weak demand prompts companies to cut production and jobs. Normally those workers are rehired once the economy recovers.

For example, in the back-to-back recessions of the early 1980s, the jobless rate peaked at 10.8 percent. Thanks to a strong recovery, that receded to 8.3 percent one year after the downturn ended.

This pattern has changed in recent years and jobs lost in recessions are much slower to return, if they come back at all. In the 2001 slump, unemployment peaked 19 months after the recession ended, and it was another three years before the jobless rate came close to pre-recession levels.

In the current recession, economists say high unemployment is likely to persist at least another four years. In Michigan, home to the battered U.S. auto industry, nearly 13 percent of jobs may be wiped out, according to research firm IHS Global Insight, and the state's labor market probably won't return to its pre-recession strength until after 2015.

Alvin Gains, 56, a former worker at a Chrysler plant in the Detroit suburb of Sterling Heights, has given up on finding work in his home state and is leaving for Texas.

He left Michigan once before, when he was laid off by Chrysler in 1979. This time he doesn't expect to come back. This downturn is so much worse, there's no work for people here, he said.

The rise in long-term unemployment is a puzzle for economists. The Congressional Budget Office studied it in 2007 and concluded merely that the shift was hard to explain.

But what is clear is the longer people like Gains remain out of work, the worse their chances get. Skills become outdated, big resume gaps put employers off, and younger people step in.


Retraining is the usual prescription, but pay and benefits in new careers are often far worse. Ex-auto workers who once made $28 an hour can now expect more like $9.

The hardest thing for many auto workers who've been doing the same job for 25 years or so to accept is that instantly, permanently, their standard of living has been ratcheted down 80 percent, said Douglas Stites, chief executive of Capital Area Michigan Works, a career center in Lansing, Michigan.

The housing crisis has worsened the situation for job seekers because areas with high unemployment also have high foreclosure rates, making it hard to sell up and move on.

Still, when local prospects are grim, sometimes the only choice is to leave. Outplacement consultancy Challenger, Gray & Christmas said that 18 percent of those finding employment in the second quarter relocated, up 14 percent from the previous quarter and the highest rate since 2006.

The pain of joblessness extends well beyond the workers themselves, hitting their families and entire communities as home foreclosures mount, neighborhoods decay and crime rises.