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It hurts more to be unemployed now than the
last time the jobless rate hit 10 percent.


      Americans have more than triple the debt they had in 1982, and
less than half the savings. They spend 10 weeks longer off the job.
And a bigger share of them have no health insurance, leaving them
one medical emergency away from financial ruin.

      For these reasons, the unemployed are more vulnerable today to
foreclosure and bankruptcy than they were a generation ago.


      Donald Schenk knows. He's been without work both times. It's
worse now, he says.


      Back in the early 1980s, when Schenk lost his job at a phone
company, he was able to find several temporary jobs - including one
testing pinball machines - to make ends meet until he landed
full-time work nearly two years later.


      But now Schenk, 55, of the Chicago suburb of Schaumburg, Ill.,
has been seeking work for a year and a half after losing his
information technology job. Potential employers aren't interested
"if you are not a perfect fit," he says.


      The unemployment rate hit 10.2 percent in October. All told,
15.7 million Americans are out of work. Add in workers forced to
settle for part-time work or those who have simply given up
looking, and the rate is 17.5 percent.


      Only twice since World War II has unemployment topped 10 percent
- now and from September 1982 to June 1983. In a few respects, life
is better today for the unemployed than it was then.


      Unemployment benefits are more generous, adjusted for inflation,
and the Internet allows jobseekers to network, scan for openings
and apply without leaving home.


      And thanks in part to higher home values, Americans are worth
more now. Measured in 2009 dollars, net worth comes to about
$173,000 per person, compared with $94,000 in 1982, according to
Lynn Reaser, president of the National Association for Business
Economics.


      Even if the average American has a larger cushion to fall back
on, times are tough.


      A much larger share of jobs these days - more than four out of
five - are in the service sector, such as tax preparers, hair
stylists and retail clerks. Those jobs generally pay less and offer
fewer benefits than blue-collar manufacturing work.


      Manufacturing, which typically offers more generous benefits,
accounts for less than 9 percent of payrolls today - down from 19
percent in 1982.


      Back then, the United Auto Workers persuaded the Big Three auto
companies to pay up to 95 percent of the gap between a laid-off
worker's unemployment benefits and what he or she made on the job.


      But since the decline of the size and influence of unions,
"that would be inconceivable today," says University of Illinois
professor Michael LeRoy, who studies unions.


      Unemployment also squeezes families tighter these days because
they are less conservative about how they spend and save.


      People carry an average of about $46,000 in debt - mortgages,
credit cards, auto loans and other consumer debt. That's a far
bigger load than in 1982, when per capita debt totaled about
$14,000 in today's dollars.


      And savings, as a percentage of after-tax income, was only 2.7
percent last year, down from 10.9 percent in 1982. Americans
stashed an average of just $940 last year, compared with $2,537 in
1982. That helps explain why the foreclosure rate runs about seven
times higher today.


      Not surprisingly, that means more Americans - about three times
as many - are going bankrupt.


      Lawrence Mishel, president of the left-leaning Economic Policy
Institute, says the ripple effects of the rising unemployment rate
will be felt for years. He predicts the poverty rate for children
will rise to 27 percent in 2011, from 18 percent in 2007.


      "It will scar a generation of kids," he says.


      If you're unemployed today, the odds are better that you'll stay
unemployed longer than a generation ago.


      And government surveys suggest that if you get laid off, it's
more likely to be for good. Today's unemployed have been out of
work about half a year on average. In the early 1980s, they spent
about four months without jobs.


      One reason is that industries such as construction and finance
may never bulk back up to pre-recession levels. Even before the
economy went south, demand for their products was inflated by the
housing bubble.


      Another reason layoffs are more permanent: Manufacturers these
days are more aggressive about using technology to boost
productivity - or they hire cheaper workers overseas as the economy
improves.

      Schenk, who is drawing unemployment aid, has managed to stay
up-to-date on his mortgage and credit card payments, but at a
significant cost to his financial future. "I'm burning through my
savings," he says. "And the next thing I'll dip into is my
retirement account."


      Because he does not have health insurance, Schenk's financial
pressures would grow dramatically if he became injured or sick. The
Census Bureau says about one in four unemployed people have no
insurance, compared with about one in five in 1987.


      Schenk also lacked insurance when he lost the phone company job
in the '80s. But he was younger then, and less concerned about his
health. This time around, he paid for health coverage through the
government's COBRA program. But that has run out.


      The government program lets today's workers keep their insurance
for 18 months after a layoff. But the premiums can be steep - up to
$1,137 a month for families and $410 for individuals.


      The federal stimulus program provides subsidized coverage for up
to nine months for those who meet certain income thresholds. After
that, they must pay the full cost.


      For those who lose jobs today, the safety net is much flimsier.


      Layoffs have forced some older workers into retirement, yet
fewer of them can fall back on traditional pensions that pay a
steady monthly sum. Only 11 percent of active workers have a
traditional pension, according to the Employee Benefit Research
Institute. That's down from 50 percent in 1982.


      Instead, more workers today have 401(k)-type retirement plans.
But those have suffered huge hits in this downturn. The Standard &
Poor's 500 index fell as much as 57 percent earlier this year from
its October 2007 peak and is still down about 32 percent.


      Schenk, who has had dozens of jobs interviews, says it's a
struggle to remain upbeat and to keep searching. He knows for sure
that one bad economic indicator is higher nowadays than a
generation ago: He worries more.


      "Back then it seemed like certain jobs were hit and you could
still find those short little gigs," Schenk says. "This time it
hit everything."

Gallery

Business and Economic News

When these union workers were protesting the disappearance of their jobs in 1982, the unemployment rate was months away from hitting 10 percent, as it did late last week. The difference between then and now? Americans have more than triple the debt they had then, and less than half the savings.

Being unemployed is tougher than it used to be

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