Long-term jobless face harsher label: 'downwardly mobile'

HACKENSACK, N.J. -- For months after she lost her job as a customer-service representative at a Wayne paper tube manufacturer, Kathy Canova was convinced she would soon find another.

Lately, says the 61-year-old Totowa, N.J., resident, she's not so sure.

"I have kind of lost hope about ever finding a job," said Canova, who had planned to retire from the $42,000-a-year job at the age of 66.

"I could take early Social Security at 62" and accept a payment smaller than at full retirement, she added. "But I couldn't live on that."

It's the kind of wrenching calculation that the nation's long-term jobless -- especially those in their 50s and early 60s -- increasingly face as it has become clear that high levels of unemployment will likely continue for years to come.

Forced to retire early or accept lower-paying jobs if they can get back into the job market at all, depleting their savings or retirement nest eggs years earlier than planned, they face a decline in earning power that will likely follow them for years, job experts and economists say. Some will end up in poverty; others face declining health and even early death brought on by factors associated with job loss.

"A percentage of them will not ever work again," said Carl Van Horn, director of the John J. Heldrich Center for Workforce Development at Rutgers University. "And they will be downwardly mobile, especially if they don't have a spouse who is earning."

Canova, for instance, gets by on her unemployment check of $490 a week to help pay $600 a month toward the mortgage she shares with her sister, and by dipping into her savings -- which she estimates have fallen by 40 percent.

The grim outlook is a dramatic shift from just a few years ago, when analysts predicted a worker shortage as the nation's 76 million baby boomers retired in comfort.

Instead, boomers worried about the decline in the value of their nest eggs, and spooked by the poor economy, are expected to keep working -- adding to the difficulty that long-term unemployed workers have in finding jobs.

The number of long-term unemployed workers, which the government defines as people out of work for 27 weeks or more, grew sevenfold during the recession. Nearly one in three unemployed people have now been out of work for a year.

A report at an International Monetary Fund conference in September showed that a U.S. worker jobless for four weeks was three times as likely to find a job as one unemployed for six months.

Behind the statistics is a debate about the cause of the nation's unemployment rate, which stands at 9.6 percent 16 months after the recession ended. Some economists argue that the causes are cyclical, related mainly to the recession, and that the economy will eventually bounce back.

Others argue that the job drought is due to structural forces, and so is harder to tackle -- stemming from factors such as the loss of jobs to lower-cost countries, increased U.S. productivity and a mismatch between what employers want to hire and what's available in the work force.