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Sunday, August 25, 2013

Long-Term Unemployed Unprecedented

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When a hearing to explore how to get the long-term unemployed back to work kicked off on Wednesday morning, only one lawmaker was in attendance.
- The Poorly Attended Hearing on One of the Economy’s Toughest Problems - April 24, 2013

If unemployment insurance is making people not want to work, then the labor market should look worse for those with benefits than for those without. It doesn’t. As Ghayad shows, there’s no reason to think reducing unemployment insurance now will reduce unemployment: the labor market is just as broken for people who aren’t collecting benefits as it for people who are. It’s time to stop blaming—and punishing—the victims of our bad economy. The unemployed aren’t lazy. But the policymakers who have given up trying to help them are.
- Don’t Blame Unemployment Insurance for Our Jobs Crisis

for the last forty years the short-term unemployed have been a declining, and the long-term unemployed an increasing, percentage of all unemployed. Most importantly for the purposes of this article, the persistence of unemployment is closely related to the disappearance of middle-pay jobs. The result has been that low paying jobs comprise an increasingly large percentage of all jobs....In both the natural and the social sciences new insights are often the fruit of perspicuous categorization. Its a certain type of job that is disappearing but the categories low skill, high skill, manual , cognitive, high paying, low paying fail to uncover the systemic mechanisms generating increasing labor market polarization. What is important is that it is routine jobs that are vanishing. These are jobs involving tasks consisting of a specific set of activities accomplished by workers following well defined instructions and procedures. These are not merely manual or “blue collar” jobs in production and maintenance like mechanics, machinery diagnostics, machine operators and tenders, meat processors, cement masons, dress makers, fabricators and assemblers. Routine occupations also involve “cognitive” activities in sales and “office and administrative support” such as secretaries, retail salespersons, some workers in law offices, bank tellers, travel agents, mail clerks and data entry keyers.
- Recession, Depression or Jobless Recovery? Long-Term Unemployment under “Neoliberal Capitalism”

Number of Long-Term Unemployed ‘Unprecedented’ Under Obama
Almost 5 million workers now classified as long-term unemployed

By Bill McMorris
Free Beacon
August 21, 2013

The economy has seen an “unprecedented” number of LONG-TERM UNEMPLOYED under the Obama administration, according to a liberal think tank, and economists say plans pursued by Democrats in Washington are unlikely to curb the problem.

Nearly 5 million workers are classified as long-term unemployed, while 900,000 more have stopped looking for work altogether, according to a new series of REPORTS [local copy] by the URBAN INSTITUTE.

Three percent of the labor force has been out of work for more than six months, an improvement of only one percentage point since unemployment spiked in October 2009, according to the STUDY [local copy].

“That long-term unemployment would rise during a recession is not at all surprising, but the extent of the increase and its persistently high level since the start of the recovery are both troubling and unprecedented,” the report states. The U.S. economy is now well into its fourth year of recovery, the unemployment rate is below 8 percent, yet the long-term share of unemployment is still near 40 percent.”

The center-left think tank said that those startling figures are UNLIKELY TO CHANGE unless the United States can achieve dramatic job growth, rather than the middling TWO PERCENT OVERLL ECONOMIC GROWTH figures the Obama administration has averaged.

While the think tank stresses that many of the causes of long-term unemployment are outside of the control of the government, it outlined a number of policies that could help alleviate long-term unemployment, including reforming unemployment insurance to subsidize wage decreases and hour reductions and increasing workforce training subsidies at the local level, rather than a ONE SIZE FITS ALL FEDERAL APPROACH.

Michael R. Strain, a labor economist with the American Enterprise Institute, said the OBAMA ADMINISTRATION has FAILED to lead in the effort to solve the crisis of long-term unemployment.

“There are plenty of solutions that could be supported by Republicans and Democrats, but we’ve FAILED TO FIND SOMEONE to champion them - most of the blame lies with President Obama because he sets the agenda in Washington,” Strain said.

He agreed with the Urban Institute that unemployment benefits could be better utilized by using them to subsidize workers who take lower-paying jobs following layoffs. Getting back in the job market quickly, even at a lower salary, can prevent workers from suffering long-term damage to their earning potential as well as ensure that they do not FALL FURTHER BEHIND in the skills gap.

However, the debate over Americas record-high spending on unemployment has FOCUSED ON HOW LONG WORKERS RECEIVE BENEFITS, rather than how to spend that money effectively.

Many of the long-term unemployed come from the manufacturing and construction industries. Minorities and those with less education are the most likely to be out of work for long periods of time, according to the Urban Institute.

Job seekers are also stuck in regions that have failed to produce new jobs. Strain said that these workers could be assisted using unemployment benefits to help them relocate to areas that have wider access to jobs, rather than repeating a cycle of poverty in cities like Detroit.

“Let’s allow firms to pay workers whatever they can, supplement those earning with subsidies; let’s open those workers up to new skills and new lines of work and new locations to cope with manufacturings decline,” Strain said.

DEMOCRATS have focused on playing politics with hot-button political issues such as the MINIMUM WAGE and top tier tax rates to paint Republicans as the party of the elite and wealthy.”

The MINIMUM WAGE is an area where Democrats are pursuing good politics using bad policy, according to Strain. It raises the cost of hiring young and inexperienced workers - those hit hardest by the recession.

“Raising the minimum wage is a debate to have during boom times when theres money to spread around,” Strain said. “Raising the minimum wage now is a bad idea; the government should be reducing the rigidity of the labor market rather than making it harder and more expensive to hire workers.”

He sees politics at play.

“Nancy Pelosi and other Democrats have been explicit in saying that the minimum wage is being used as a midterm election issue and President Obama is helping them achieve that,” Strain said.

SOURCE

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27 Weeks And Counting

The Urban Institute
August 2013

Four years after the end of the Great Recession, long-term unemployment remains at record high levels. As of June 2013, 4.2 million peoplea staggering 36.7 percent of the unemployed - have been out of work for longer than six months.

In 2010, the long-term share of the unemployed peaked at 45 percent, far higher than at any point since the Great Depression. Even at the depths of the 1980s recession, the long-time share of the unemployed was only about 25 percent.

That long-term joblessness remains so high and has persisted for so long “suggests that there is something different about this recession and recovery,” said Gregory Acs, director of the Urban Institute’s Income and Benefits Policy Center.

“There’s a lot of aversion to hiring. That in and of itself is creating longer-term problems because more and more of the labor force has been estranged from the world of work....History teaches us that they will carry the scars of that long-term unemployment for a while.”

Sharon McGregor, 43, who puts off doctor visits because she has no health insurance. Shoun Brock, 44, who worries that employers can’t see past the long gap in his work history. Allison Johnson, 26, who is trying to get a foothold in the job market. Pauline Richter, 72, who feels forced into retirement after being out of work for two years. They’ve all been job searching for months, in some cases years, wondering if they’ll get another chance or if they’ve been PERMANENTLY SHUT OUT of the JOB MARKET.

“This is like a nightmare,” McGregor said. “You wonder if you are ever going to work again....As far as retirement goes, I have nothing. And I don’t see, at this point, how I am going to catch up.”

The Bureau of Labor Statistics defines long-term unemployment as being out of work for 27 weeks (more than six months) and actively searching for a job. This category doesn’t include people who are underemployed, such as freelance or part-time workers searching for full-time jobs.

Getting a better handle on who the long-term unemployed are can offer insights into the obstacles they face and how public policy can address those barriers. Urban Institute researcher Josh Mitchell compared the long-term unemployed with newly unemployed workers (those out of work for less than five weeks), employed workers, and discouraged workers (those who have given up searching) in 2012.

Mitchell found that long-term unemployment particularly affects minorities and vulnerable populations. Blacks make up a disproportionate share of long-term unemployed workers (22.6 percent) and discouraged workers (25.9 percent). Long-term unemployed workers are much more likely to be poor than employed workers (34.1 percent versus 6.9 percent). And with poverty comes a host of potential work barriers, including unreliable transportation, out-of-reach child care costs, and poor health.

Disabilities also can hold workers back: 6.5 percent of the long-term unemployed have a disability that limits their ability to work, compared with 1.8 percent of employed workers. Unmarried workers, who are less likely to have a second person’s income to fall back on, are disproportionately likely to be long-term unemployed.

The long-term unemployed tend to be less educated than employed workers (18.1 percent are high school dropouts vs. 9.0 percent of those with jobs) but are somewhat more educated than newly unemployed and discouraged workers. “This suggests that increasing the education and skills of the long-term unemployed could help them find new jobs,” Mitchell writes.

Mitchell also compared characteristics of the long-term unemployed in 2007, 2009, and 2012: before, during, and after the recession. He found that the long-term unemployed in 2012 were somewhat more educated than the long-term unemployed in 2007. Blacks made up a smaller share of the long-term unemployed in 2012 than in 2007, while Hispanics made up a greater share. And a smaller fraction of the long-term unemployed are single and childless now than before the recession.

WHAT ARE THE CONSEQUENCES?

After being laid off, Pauline Richter searched diligently for work. She combed through job boards, sent out dozens of rsums, and reached out to her network of contacts looking for leads. She lives in Skokie, Illinois, and had worked in Chicago as the director of an older adult mental health program for nearly 24 years, managing a $1 million budget. She has two master’s degrees. But after a year and a half passed without an offer in her field, she began applying for part-time jobs at Costco and the Container Store.

“I used to be a really good contributor to the economy,” Richter said. “I have 40 years of knowledge in my field that nobody is using. ...[Now] I can’t even get a job as a cashier.”

She knows employers see her age as a barrier. She was 70 when she lost her job, but had been hoping to work for another five years to build up her retirement savings. In December, Richter’s unemployment benefits are set to expire.

“I worry about everything. I have no idea how realistic it is,” she said. “I’m not destitute, but some of the things that I had wanted to do after all my years of work, I simply can’t do.”

Richter is financially stable, but many long-term unemployed workers struggle to get by. During the Great Recession, family incomes for most of the long-term unemployed fell 40 percent or more.

And loss of income isn’t the only consequence of unemployment. Being out of work for a long time can lead to permanently lower wages and career setbacks, worse mental and physical health, and higher mortality rates. Workers’ skills may erode while they’re out of a job, and they may begin to lose touch with the business contacts that could help them find work.

Then there’s the stigma of being unemployed, which gets worse the longer someone is out of a job. “When people see that you haven’t been working for a while, they feel as though...you are lazy,” said Shoun Brock. “I see it in their faces when I go on the interview.”

Brock hasn’t had a permanent job in two years, though he worked briefly about seven months ago. Research has shown that employers are less likely to hire applicants who have been out of work for a long time. The chance of being called for a job interview falls by 45 percent as unemployment lengthens from one to eight months.2

“The longer you’re out, the harder it is to get back in,” Acs said. “As the economy recovers, as people are getting jobs, there’s more of a tendency to say “Oh, if you’re not working, there’s something wrong with you.’”

To get by, jobless workers have borrowed money from friends, spent down savings, and missed mortgage or rent payments.3 Many have gone without needed health care: in 2011, 63 percent of long-term unemployed or underemployed workers skipped dental visits, 56 percent put off health care, and 40 percent did not fill their prescriptions.4 In each case, roughly half as many full-time employed workers reported cutting back on health costs.

The consequences of long-term unemployment aren’t contained; they can spill over into families and can harm whole communities. Kids whose parents are unemployed for a long time tend to perform worse in school than their peers with employed parents. It’s not entirely clear why, but family stress, lack of health insurance, and reduced income may all play a role.

High rates of long-term unemployment in one community can strain public services and lower the tax base. And less tax revenue can mean fewer resources for public school, police, and other services. Communities with a high concentration of long-term unemployed workers tend to have higher rates of crime and violence.

Long-term unemployment may get overlooked as the economy recovers, but the long reach of its consequences will be hard to ignore

WHY IS LONG-TERM UNEMPLOYMENT SO HIGH?

Why have so many people been unemployed for so long? What’s different this time? Is the rapid pace of technology leaving behind workers whose skills don’t match employers’ needs? Did the housing collapse keep unemployed workers from moving to areas with more jobs? Or are too-generous unemployment benefits to blame?

According to Acs, who examined several possible explanations, none of these is the primary driving force behind the rise in long-term unemployment. Measurements of industrial and occupational skills mismatch have returned to pre-recession levels, while persistent joblessness remains high. The housing collapse may have affected how much people moved around during the recession, but it had little impact on unemployment.

As for unemployment benefits, research suggests that benefit expansions (from the standard 26 weeks to 99 weeks in some states) likely account for less than a quarter of the increase in the length of unemployment.5 In fact, unemployment benefits may have kept more recipients in the labor force, actively searching for jobs as required, rather than giving up.

And while long-term unemployment can be self-perpetuatingas workers’ skills erode and long stretches of unemployment stigmatize applicantsחthis was already the case before the recession.

So why is long-term unemployment so high? Because the recession was so devastating and the recovery too weak. The changing nature of jobs and other explanations may have made matters worse, but sluggish economic growth is the real culprit. Employers are hiring, but too slowly to make up for the tremendous job losses during the recession.

A real concern here, Acs said, is that what could have been a temporary problemwhere people laid off during a recession are rehired when the economy improvesחis becoming a permanent problem. People can be out of work for so long that employers perceive them as “un-hireable,” leaving them shut out of the workforce even as jobs return.

RELATED RESEARCH

A full assessment of the health of the labor market should consider several indicators, including the unemployment rate, the job creation rate, the labor force participation rate and others.

A real concern here, Acs said, is that what could have been a temporary problemwhere people laid off during a recession are rehired when the economy improvesחis becoming a permanent problem. People can be out of work for so long that employers perceive them as “un-hireable,” leaving them shut out of the workforce even as jobs return.

HOW CAN WE HELP?

In June, 15 students graduated from STRIVE DC’s four-week customer service training course. The Washington, DC, nonprofit offers training, job placement assistance, and supportive services for the unemployed. Staff and many of the graduates said that the recession has made competition in the job market worse, so that even low-wage jobs require more and more qualifications.

“It’s hard, but at the same time, I’m trying,” said Michael Jackson, 19, one of STRIVE DC’s graduates. “I pray that I make it, but I understand it’s not easy....I’m not the only one that’s filling out applications for that job.”

While strong economic growth is the most effective way to put people back to work, there’s no guarantee that employers will fill new jobs with long-term unemployed workers. Beyond economic growth, there are policies that can help workers find jobs, keep workers from becoming unemployed for long spells, and help families dealing with the consequences of long-term unemployment. Acs examined several approaches.

Workforce development programs generally benefit workers with little education and experience. To really help the long-term unemployed, training should reflect the needs of local employers. Another key to success is offering credentialssuch as STRIVE DC’s customer training certifications. “We need to seriously take on the idea of lifetime learning,” Acs said.

Meanwhile, large-scale public works programs can temporarily stop long-term spells of unemployment, helping workers retain their skills and develop new ones.

“A lot of the problems associated with unemployment come at the start of unemployment,” Acs said. “So keeping people in their jobs and helping them make job-to-job transitions would help us out in the future.”

To keep long-term unemployment from growing, policies can help vulnerable workers stay in jobs and help the recently unemployed find new ones quickly. Potential strategies include expanding short-time compensation programs, which provide partial unemployment benefits to workers who’ve had their hours cut. This could encourage employers to cut workers’ hours rather than have layoffs - and part-time work still allows people to stay connected to their professional networks and avoid the stigma of unemployment. Also, job search assistance targeted to newly unemployed workers may speed their return to work.

Changes to unemployment insurance requirements could help more low-income workers make ends meet after a job loss. Low-wage workers often don’t have a long enough work history to qualify for unemployment benefits, but they are among the most in need of a safety net. Acs also recommends disability insurance reforms that would allow people to move on and off the program more easily, rather than discouraging them from returning to work when they can.

While policymakers debate which levers to pull, Pauline Richter and other long-term unemployed workers continue to look for jobs. After two years of searching, Richter says she’s disheartend but hasn’t given up just yet. “I just found another networking link,” she said, “and some more job possibilities are coming in, so we’ll see.”

SOURCE

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Long-Term Unemployment Crisis Is Historically Terrible (CHART)

Huffington Post
August 20, 2013

The Great Recession ended in 2009, but Americans across the country are still grappling with its fallout.

NEARLY 40 PERCENT of Americas unemployed have been jobless for 27 weeks or more, according to a new report from the non-partisan Brookings Institution. The share of jobless who are long-term unemployed hit its peak at the end of the Great Recession, but still remains historically high, as the Brookings chart below indicates:

2013-08-20-long-term-unemployment.jpg

As the chart shows, the number of long-term unemployed as a share of the unemployed—and labor force overall—was higher during the Great Recession and the period immediately following it than at any point since the end of World War II.

The 4.7 million Americans still struggling with long-term joblessness could face the threat of a lifetime drop in wages and poorer health for their children, according to Brookings. Being out of work for 9 months or more also can decrease interview requests by up to 20 percent for those applying to low- or medium-skilled jobs, according to a recent study.

And by causing a large-scale decay of skills in the workforce, the high levels of long-term unemployment could be bad news for the economy as well, according to economists cited by the International Business Times.

SOURCE

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Its Not The Fault Of The Long-Term Unemployed That They Can’t Find Jobs

By Bryce Covert
Think Progress
August 26, 2013

More than four million people have been unemployed for 27 weeks or longer, putting them in the category of the long-term unemployed, and they make up nearly 40 percent of all people who are out of work but seeking a new job. Why cant they seem to get hired? New data shows that they look a lot like other unemployed workers except that they tend to be older, a bit more racially diverse, and actually have more education, which implies that they probably just need a better job market.

The data show that there is little difference when it comes to gender, type of job they previously held, and any health impairments among different groups of unemployed workers and small variations on race. Hispanics are about as likely to be unemployed for more than 27 weeks, less than five weeks, to be employed, or to have given up looking for a job altogether - the four groups that the study looks at. Black workers, on the other hand, make up about a quarter of the long-term unemployed and the discouraged, compared to just 15 percent of the newly unemployed and 10.5 percent of those with a job.

In terms of education, 18 percent of the long-term unemployed don’t have a high school degree, compared to a quarter of those who have been unemployed for five weeks or less or those who are unemployed but have given up looking for a job. The employed, however, are much more likely to have more education, as just 9 percent didn’t graduate from high school.

Perhaps the biggest difference, however, is that those who have been looking for a job for more than six months are typically much older than those who just lost their jobs. About 15 percent of the long-term unemployed are ages 56 to 65, but just 8 percent of those who have been out of work for under five weeks are that age. The newly unemployed, by contrast, are much younger: more than 40 percent are ages 16 to 25. The struggle for older workers to reenter the job market may be a sign of age discrimination.

In general, however, the report notes that given how similar the long-term unemployed look to all other workers, what they really need is an improved job market and policies that would lower the unemployment rate overall.

Indeed, the longer someone stays unemployed the harder it is to reenter the workforce. Being unemployed for longer than nine months is the EQUIVALENT OF LOOSING FOUR YEARS OF EXPERIENCE in the eyes of a potential employer. Those who are out of work for six months or longer will find that they get FEWER CALLS back for an interview than those who are currently employed but don’t have the right experience. Some workers report being told outright that a potential employer ISN’T INTERESTED in those who have been out of a job for a while.

Yet they can’t necessarily expect to get unemployment benefits while they job hunt. Those who exhaust the state-level benefits that tap out around 26 weeks could see federal support shrink thanks to sequestration. Some states COULD DROP the federal program altogether, which has already happened in NORTH CAROLINA. Those who do get checks will see them reduced by at least 15 percent, with deeper cuts in some states.

SOURCE

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Were the face of food stamps
When my husband lost his job, we landed in the 47 percent—and learned how cruel other people’s judgment can be

Abby Henson
Salon
October 12, 2012

Last winter I ran into a friend pushing his two youngest children in a stroller. When I asked how he was doing, he told me he’d recently lost his job. I walked away thinking, Thank God that’s not us. Fast-forward seven months and now we’re the family people walk away from with a sigh of relief.

One day this summer, my husband came home early from work with the news he’d lost his job. Since then, we’ve gone through all the stages of grief, with a few additions of our own. Ive gone into what I’ve dubbed “Mama Bear mode,” wanting to do everything with my husband and our two small children, maybe because I just dont want to face anyone alone. “How are you doing?” is a hard question to answer in the rush of school pickup. So I keep my mate and cubs close, or we hibernate at home, trying to avoid scrutiny.

But even Mama Bears can get caught off-guard. A couple of weeks ago, I was out with my running group, and we got to talking about Romney’s now infamous 47 percent. A heated back and forth ensued about federal assistance and those who abuse it, with a few anecdotes tossed in for good measure. Abby, you know you’ve seen the woman at Safeway using her food stamps and then hopping in her Mercedes, one woman said.

Well, no, I actually had not seen that particular woman before. At least not until last month. But I do know that a man - my husband- was using food assistance at a Wegman’s and then driving away in our 13-year-old Subaru with 170,000 miles on it. Does that change the story? Should we sell our car and get a make and model more befitting of someone receiving federal assistance? Or maybe there is a grocery store designated solely for food assistance users? This is all new to me.

Wounded and embarrassed, I came home rattled from the run. The discussion had hit a nerve, and I brooded over our situation for days.

Collecting unemployment? Well, that I could stomach. After all, I’d worked before I was a stay-at-home mom, and I’d paid into the system. And my husband? He lost his job despite years of positive performance evaluations.

Sign up for medical assistance? Sure. COBRA payments would devour our monthly budget and after my son was hospitalized with a respiratory infection, I could rationalize getting help for the sake of my children.

But food assistance? That unraveled me. Completely. What would my running group say if they knew the truth about our situation now?

SOURCE

Posted by Elvis on 08/25/13 •
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