When a job is a long shot

The Washington PostMarch 25, 2014 

Say it with me: The long-term unemployed are not lazy. Nor are they coddled, hammocked or enjoying a coordinated, taxpayer-funded vacation.

They are, however, extremely unlucky – and getting unluckier by the day.

Take Renardo Gomez of Fitchburg, Mass. In three years, Gomez ricocheted from a hospital job of 20 years that paid $34,000 a year to a sudden layoff to a series of low-paying, short-term gigs interspersed with longer and longer spells of unemployment. He expects an eviction notice soon.

“I keep putting in 110 percent and getting 10 percent back,” he says.

A new Brookings study that tracks the fates of those unlucky workers who don’t manage to find stable new jobs in their first few weeks of unemployment suggests that this post-layoff tailspin is distressingly common.

It was already known that the longer workers have been out of a job, the lower their chances of finding work in the coming month. The Brookings paper – by the former Obama administration economist Alan Krueger and his Princeton colleagues Judd Cramer and David Cho – took this analysis a step further: What about (gulp) these workers’ longer-run prospects?

It turns out that from 2008 to 2012, only 1 in 10 people who were already long-term unemployed in a given month had returned to “steady, full-time employment” by the time government surveyors checked in on them a little more than a year later. “Steady” in this case means that they were working for at least four consecutive months. And the other 9 in 10? They were still out of work, toiling in part-time or transitory jobs or had dropped out of the labor force altogether.

In other words, like Gomez, the vast majority of people caught in long spells of joblessness do not find jobs again, or at the very least have trouble hanging onto whatever replacement jobs they were able to land.

It’s unclear why unemployment becomes increasingly self-perpetuating. Perhaps it is merely selection bias – that is, the most desirable jobless workers get picked off early, leaving the less desirable behind to rack up more and more weeks of unemployment. But the Princeton researchers had difficulty detecting obvious differences between the short-term unemployed and the long-term unemployed. The two groups are about equally spread around the economy by sector, occupation and educational attainment, and for the most part are similar demographically (though the long-term unemployed skew older).

Such demographic similarities suggest that something about the experience of joblessness tarnishes workers’ marketability.

One possibility is stigma. In another study, researchers sent out fake resumes in response to job postings. All other qualifications held equal, but employers were much less likely to respond to resumes from applicants who had been out of work longer. (Some employers are quite open about these prejudices, declaring in job ads that applicants must be currently or recently employed.)

Workers’ skills may deteriorate as they spend more time on their couches instead of in cubicles or at work sites. Professional networks might also fray, which is especially damaging for those in sales. Hard skills in dynamic industries such as technology might become outdated. Even softer skills, like showing up on time or exhibiting self-confidence, might erode.

One car sales manager I spoke with last year said applicants who had been job-hunting longest seemed to have the most trouble making eye contact and expressing any enthusiasm or hopefulness about their future. “Why would I hire someone like that?” he said. “He isn’t even trying to sell himself. There’s no way he could sell a car.”

One implication of the Brookings research is that policymakers should have done more to prevent the short-term jobless from falling into long-term joblessness in the first place. Of course, time machines are rarely an effective policy tool.

Which is why many economists have been hoping that a strengthening recovery would be enough to help Gomez, insecure would-be car salespersons and the nation’s 4 million other long-term jobless workers. As demand picks up, many analysts have declared, businesses would have no choice but to absorb workers with more pockmarked resumes. After all, in a booming economy, supposedly even ex-felons are in demand.

Alas, the Brookings paper makes that deus ex machina appear unlikely. The authors looked at the re-employment chances for long-term unemployed workers around the country and found that these workers do not fare substantially better in states with booming job markets (e.g., North Dakota) than in states with struggling job markets (e.g., Michigan).

Which means that even as the overall U.S. economy improves, those already deeply scarred by the financial crisis are unlikely to share in the bounty.

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