What Washington Studiously Ignores The percentage of the working age population that is currently unemployed is about 43 percent. The highest since the Great Recession. But it seems Washington doesnt care and wants to ignore the plight of those not fortunate enough to have a job. Many, if not most, in Washington dont even want to continue their unemployment compensation. Washington sticks it head in the sand, in most cowardly fashion. But the truth is, for the long-term unemployed, finding a job is hard — but keeping one may be even harder. New research tracking people who have been out of work for six months or longer found that 23 percent of them landed a job within a few months of the study. But a year later, more than a third of that group was unemployed again or out of the labor force altogether. The findings are the latest in a bleak but growing body of literature suggesting long-term unemployment has become a trap that is difficult to escape. Economists say that means the long-term unemployed could become a permanent underclass, left behind by the nation’s broader economic recovery. “It’s not like when you get back to work you’re safe,” said John Fugazzie, who founded Neighbors-Helping-Neighbors, a mentoring group for the jobless, and is in the midst of his second bout of unemployment since the recession. “The economy is a lot worse than people want to admit.” Several factors are blamed. Some economists argue that workers’ skills deteriorate during long spells of joblessness, making them less employable. Others counter that desperate workers are accepting jobs that are unstable or a poor match for their abilities, often for less money than they were making before. In a paper for the Brookings Institution, former White House chief economist Alan Krueger looked at data on the long-term unemployed from 2008 to 2013 and documented the incidence of repeat joblessness. About 36 percent of those workers were in a job 15 months later, according to his analysis. A closer look at the data revealed something even more disheartening: Only 11 percent were in steady, full-time jobs. Prescient research conducted nearly two decades ago by economist Ann Stevens, now at the University of California at Davis, found that 41 percent who lost their job once were unemployed at least once more during that period. Almost all of the subsequent job losses occurred within five years of the first one. Stevens’s study did not explore the fate of the long-term unemployed. Still, she found that multiple spells of unemployment depressed workers’ wages by 9 percent even after several years. Other economists have demonstrated just how difficult it can be for the long-term unemployed to land a job in the first place. In research for the Federal Reserve Bank of Boston, Northeastern University economist Rand Ghayad sent nearly 5,000 mock applications in response to job postings. He found that résumés showing unemployment lasting more than six months were uniformly rejected — even when those applications listed significant work experience. In other words, Ghayad said, companies were more willing to hire people with little experience who were recently unemployed than they were to hire long-jobless candidates with relevant experience. Ghayad said this dynamic creates what he called “the jobless trap,” in which those who are unemployed are increasingly likely to remain that way. He places the blame solely on the businesses doing (or not doing) the hiring. “There’s no occupation where you lose your skills” so quickly, he said. “I would not blame the unemployed people for 1 percent of what’s happening.” Others worry that the longer workers are unemployed, the less employable they become. The concept is known as hysteresis in economic circles and historically has referred to countries such as Japan that got mired in years of slow growth. A study of Swedish workers in the 1990s found that a full year of unemployment translated into a five-percentile move downward in a distribution curve of skills. Some economists are worried the United States could be entering a similar period. “Good evidence shows that both skill depreciation and stigma effects matter,” said James Sherk, an analyst. “Workers do become less productive ... and employers view long-term unemployment as a negative signal of employee quality.”
Posted on: Sun, 20 Apr 2014 04:56:00 +0000
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