Few would dispute the notion that high unemployment is dampening the Real Estate Market Recovery, here in Chicago and elsewhere. As we like to tell our clients, if today is Friday, and you are fearful whether or not you will have a job on Monday, you're not going out and buy a more expensive house over the weekend.
But today, IL Unemployment Benefits have ballooned from 26 weeks less than two years ago, to a full 99 weeks today - nearly two years! Have some of the long-term unemployed become so comfortable with the extended government dole to delay their plans to return to the work force?
To be sure, the job outlook may be looking up a bit in Chicago. As reported by Chicago Tribune Reporter Mike Oneal. a survey by Temporary Employment Company, Manpower, Inc., projects local companies plan to step up their hiring during the Second Quarter.
According to the Manpower Employment Outlook, 18% of those companies surveyed plan to hire more employees beginning next month. Only 3% plan to make payroll cutbacks this coming quarter - 75% plan to keep staff levels unchanged.
But for those out of work for a long time, the extension of guaranteed government checks, no matter how paltry, may actually disincentive some to look for jobs.
In his Chicago Tribune story from March 4th, Reporter Greg Burns points out that some economists feel the long benefit period might explain why roughly 40% of the U.S. Unemployed have been out of work for 27 weeks or more - the largest such figure since the Fed started keeping such records in the 1940's.
Robert Shinmer, a Professor of Economics at the University of Chicago, estimates that the long-term unemployed - those playing out their benefits period - could make up as much as 15% of the total unemployment rate.
Across IL, the Average Unemployment Check totals $315 per week, with a Maximum of $535 for a head of household with dependent children. That's not a lot of money today, but it might have caused some out of work to spend more time finding a new job, rather than settling for a lower-level, and lower paying, position.
To say that the nation's high level of unemployment is only due to the ever-extending period for Unemployment Insurance Benefits is a gross over-simplification. Many experts say the U.S. stands mired in the deepest recession in over 70 years.
Changes in workplace technology, as well as the overseas outsourcing of jobs once held domestically, is a big part of the picture. The availability of credit for many small businesses and individuals has dried up, directly impacting the ability of these companies to grow and hire.
Further, the crash in Real Estate Prices, felt especially strong in many neighborhoods across Chicago and Chicago Suburbs, has kept many from selling their homes, realizing a small profit from the equity, and moving on.
But, even as extended, Unemployment Benefits will indeed expire, eventually. Will this spur more people back to the work force, and drive us past the recession?
Please see our post today via BlogChicagoHomes.com.
DEAN MOSS & DEAN'S TEAM CHICAGO