The Wall Street Journal reports today on another distressing effect of this recession — unemployed Americans who took severance packages are running out of funds and can’t find replacement jobs.
Many lost their jobs in 2007 and 2008, and thought they’d soon find work, the WSJ reports.
Now, they’re getting desperate. Last week, lawmakers passed a bill extending unemployment benefits up to 20 weeks. Unemployment benefits, which typically last about 26 weeks, were expected to run out for 1.3 million people by the end of the year, according to the National Employment Law Project.
All of this is happening as the long-term jobless rate hits its highest point on record. More than a third of those who are out of work have been looking for more than six months, making this category of unemployed the biggest since the Bureau of Labor Statistics began tracking it in 1948, the WSJ reports.
Overall, companies have been eliminating or trimming severance packages. For those who do receive severance, the median pay allotted is 12.5 weeks’ salary, down from 21.8 weeks a decade ago, according to outplacement firm Challenger, Gray & Christmas.
But this downtown has brought heavy layoffs to the financial and auto industries, two places where generous exit packages remain more common, the WSJ writes. The dramatic changes in such sectors mean that many of the eliminated jobs will never come back. Some workers may suffer a permanent hit to their standard of living.
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