The Terrifying Reality of Long-Term Unemployment

[xchrom]

http://www.theatlantic.com/business/archive/2013/04/the-terrifying-reality-of-long-term-unemployment/274957/



Close your eyes and picture the scariest thing you can think of. Maybe it's a giant spider or a giant Stay Puft marshmellow man or something that's not even giant at all. Well, whatever it is, I guarantee it's not nearly as scary as the real scariest thing in the world. That's long-term unemployment.

There are two labor markets nowadays. There's the market for people who have been out of work for less than six months, and the market for people who have been out of work longer. The former is working pretty normally, and the latter is horribly dysfunctional. That was the conclusion of recent research I highlighted a few months ago by Rand Ghayad, a visiting scholar at the Boston Fed, and William Dickens, a professor of economics at Northeastern University, that looked at Beveridge curves for different ages, industries, and education levels to see who the recovery is leaving behind.

Okay, so what is a Beveridge curve? Well, it just shows the relationship between job openings and unemployment. There should be a pretty stable relationship between the two, assuming the labor market isn't broken. The more openings there are, the less unemployment there should be. If that isn't true, if the Beveridge curve "shifts up" as more openings don't translate into less unemployment, then it might be a sign of "structural" unemployment. That is, the unemployed just might not have the right skills. Now, what Ghayad and Dickens found is that the Beveridge curves look normal across all ages, industries, and education levels, as long as you haven't been out of work for more than six months. But the curves shift up for everybody if you've been unemployed longer than six months. In other words, it doesn't matter whether you're young or old, a blue-collar or white-collar worker, or a high school or college grad; all that matters is how long you've been out of work.

Help Wanted -- If You've Been Out of Work for Less than Six Months

But just how bad is it for the long-term unemployed? Ghayad ran a follow-up field experiment to find out. In a new working paper, he sent out 4800 fictitious resumes to 600 job openings, with 3600 of them for fake unemployed people. Among those 3600, he varied how long they'd been out of work, how often they'd switched jobs, and whether they had any industry experience. Everything else was kept constant. The mocked-up resumes were all male, all had randomly-selected (and racially ambiguous) names, and all had similar education backgrounds. The question was which of them would get callbacks.

[Laelth]

1. Very interesting. k&r for exposure. n/t

-Laelth

[dickthegrouch]

2. It is absolutely essential to make it look as though you were employed

I started my own company in my field and described myself on my resume as a contractor in the field - even though I wasn't getting any work. I was keeping up to date on the developments and trying to find work, but I'm a much better engineer than I am a salesman. I eventually broke back into mainstream employment after 3.5 years in my field. But those 3.5 years w/o income seriously damaged my equity in my home (luckily I had refinanced (and taken a significant cashout) just before being laid off).

I'm 12 years older now and even more afraid of what might happen if I ever get laid off again. I haven't recovered yet from the damage done in 2001.

[DCBob]

27. exactly.

it doesnt matter if you made money or not, its the appearance of doing something.

[WillyT]

3. K & R !!!

[nightscanner59]

4. Government has to take the lead on this but they won't unless we all act-- Christmas day 2015

Because just as during the great depression, someone had to unstack the damn deck. Business, commerce, Wall Street create a monster that feeds off itself, workers eat cake and unemployed get the crumbs.
I've rechecked in with my occupy group lately, I still believe it's going to take a protest of unprecedented dimensions to quell this, get our politicians to bend left and help. Millions with "Mr Obama save us from Mr boehner" signs and the likes of above to march on Washington, Occupy and just stay there till something is done.
When would be a good date to march? Give it time and let it boil up from under... say.. Christmas 2015?
Theres a good likleyhood I'll be unemployed by then.

[progressoid]

5. But the DOW is up!

So that's good right?

[AnotherMcIntosh]

17. With all the rigged sources of information, how can we be sure that the DOW reports are accurate?

[Purplehazed]

28. The DOW

is a calculated average of certain stock prices. With the number of people that pay attention to it, it's reasonable to assume that it's not made up.

[AnotherMcIntosh]

31. That's meaningless. Are you unaware of the LIBOR was rigged by some banksters?

It's been in the news and otherwise explained on the web. E.g.,

The London Interbank Offered Rate (LIBOR) and its Brussels and Japanese equivalents (the European Interbank Offered Rate (EURIBOR) and the Tokyo Interbank Offered Rate (TIBOR), respectively) are set through a process whereby each day about 40 banks submit their interest rates at which they are willing to lend, to the respective trade organizations in their regions. Once the high and low bids are discarded, the rates of the two middle quartiles are arithmetically averaged. This process is repeated about 150 times to determine the final rates each day and extends to 10 currencies and across 15 time zones. The interbank offered rates serve as a reference for the pricing of financial products worth $350 trillion that include floating rate mortgages, savings accounts, interest rate swaps, other OTC derivatives, student loans, corporate loans and credit cards.

http://www.investopedia.com/financial-edge/0712/the-libor-scandal.aspx

Saying that the DOW is a calculated average of certain stock prices doesn't mean that the DOW is not and cannot be rigged. If someone were to explain how the LIBOR is set, that would not mean that the LIBOR has not been rigged.

[L0oniX]

22. The homeless are happy too.

[Milliesmom]

6. Time to get really pissed

It's time the American people marched on Washington and told congress to get off it's ass and make it right or we will vote every damn one of them out of office. People need jobs, older people need their SS,children need food and education and women have the right to health care, and stay the hell out of people's private lives. People do not need government telling them who they can or cannot marry, who they sleep with or how many kids they need. March on Washington, lets get this done, let's start a movment...................

[smirkymonkey]

30. +1000

I am all for it! Great post!

[ProSense]

7. "We can do better..."

From the link:

We can do better, and we need to start doing so now. We can't afford long-term thinking in either the short or the long-term.

Someone needs to remind Republicans.

The Jobs Program That Wasn’t

Macroeconomic Advisers on the American Jobs Act, proposed a year ago:

We estimate that the American Jobs Act (AJA), if enacted, would give a significant boost to GDP and employment over the near-term.

-The various tax cuts aimed at raising workers’ after-tax income and encouraging hiring and investing, combined with the spending increases aimed at maintaining state & local employment and funding infrastructure modernization, would:
-Boost the level of GDP by 1.3% by the end of 2012, and by 0.2% by the end of 2013.
-Raise nonfarm establishment employment by 1.3 million by the end of 2012 and 0.8 million by the end of 2013, relative to the baseline

Of course, it that had happened, Obama would be more or less a lock for reelection. Instead, having blocked the president’s economic plans, Republicans can point to weak job growth and claim that the president’s policies have failed.

http://krugman.blogs.nytimes.com/2012/09/08/the-jobs-program-that-wasnt/

[ErikJ]

8. That's why you should try to be SELF-employed.

You might not make as much as your corporate suit or union blue collar peers. You might suffer for years in poverty to get established. But in the end. Its worth it.

[snot]

9. Except when your business dries up, there's NO unemployment.

[truedelphi]

12. No you can pay into unemployment same as you would under

a regular work-for-someone-else system. EXCEPT YOU ARE THE ONE MAKING THE QUARTERLY FILINGS.

[nessa]

33. In PA if you are self - employed you must pay in but you cannot collect.

"Self-Employment During the Base Year

Services performed in self-employment do not qualify as base-year employment and will not be used to establish financial eligibility for benefits. Independent contractors are self-employed. The following two factors must exist for a claimant to be considered self-employed.

The individual has been and will continue to be free from control or direction over the performance of his/her services, both under his/her contract of hire and in fact.


As to such services, the individual is customarily engaged in an independently established trade, occupation, profession or business.

If the claimant alleges an employer-employee relationship, but the employer states that the claimant is self-employed, the employer must prove that the claimant is free from control over the performance of the service and customarily engaged in an independently established trade, occupation, profession or business."

If you create a corporation or an LLC, corporate officers are not eligible to collect.

[truedelphi]

38. Well, that totally sucks.

Sorry you and other citizens are affected in such a harsh manner there in PA.

[supernova]

10. My solution

was to hire myself.

I was laid off multiple times in the 2000s. For the last time in 2008. I thought, what's the fucking point. It can and does kills your drive, initiative, creativity and passion for your field. The last time I just felt numb. Oh, and I have a health condition that while minimally does affect my daily living, does make me compare unfavorably in the labor market according to employers.

I did find a job for a short time last year at a call center, but I realized there probably wasn't a future in it. Granted, it is social science research, not selling or ugh debt collection. It was interesting. Still, the business relies on NIH grants. What happens when that funding dries up? And the same "right to work" conditions still apply. One false move, one mistake, and you are out on your ear.

My partner is luckily working. I took the opportunity to go back to school and get "retrained" but in a completely different field. I am now building my own business. Very little left over as I plow about 1/2 profits back into my business each week. But I finally feel like a grownup with a grownup job.

I can see a real future, something that I never had working for a Fortune 10 company.

[xchrom]

11. Hello Fabulous!

[supernova]

13. Hey you!!

Long time no see!

[xchrom]

15. We gotta fix that.

[supernova]

19. I heartily agree

[hfojvt]

32. I was in business for seven years

and never had dime one of profit to plow back into my business.

So I found "working for myself" to not be very rewarding. It also keeps you from having any references.

Past employer: me
can we contact them? : sure

But now I am wondering if I shouldn't have just lied. Said that I worked for seven years in the "family business" and then put my dad or my brother down as the "owner". Then they could give me a reference for Vandelay industries.

[nessa]

34. I use my clients as references. (nt)

.

[hfojvt]

35. in retail

you don't really have clients

or maybe I should have done receipts like Radio Shack.

As Kramer asked "Why does Radio Shack make you give your name and address in order to buy batteries?"

[nessa]

36. That does make it tougher. (nt).

.

[reformist2]

14. Society needs to come to terms with a world where there are never enough jobs to go around.

Instead of demanding jobs, these unemployed people should be demanding a basic income from the government.

[L0oniX]

21. Bizarro! I hope you just forgot the sarcasm tag.

[reformist2]

25. I'm actually serious. Rapidly improving technology is making unemployment a global problem.

But how ironic and sad is it that what should be looked upon as a good thing for humanity ends up being a tragedy, all because we are stuck with an economic system that assumes everyone should be working.

[L0oniX]

26. Well then why work at all "demanding a basic income from the government".

[wyldwolf]

24. at the very least, unemployment compensation should be handled differently

In Georgia, they tie the amount you get and how long you get it to the state's unemployment rate. The lower that goes, the less you get for a shorter amount of time.

[99Forever]

16. K&R

[AnotherMcIntosh]

18. The representatives of the rich and the super-rich will come up with a shiny object

when more outrage is expressed over the destructive long-term unemployment.

What's the shiny object going to be?

Reported threats from North Korea? Gun control? Immigration reform? ... Take you pick.

[L0oniX]

20. Anyone who wants to work should have a job. Politicians should be working on jobs not war.

[wyldwolf]

23. I proved this for myself

I was given a structured layoff back in October and for the first 3.5 months, I couldn't get anyone interested. Dozens of resumes were sent daily and the phone didn't ring. I swear, a job description could have been tailor made for me but I wouldn't get any responses from my resume.

I finally changed my approach. I'd always freelanced. So I gave my freelancing an official company name, gave myself a fancy title, and put it down as a job that began right after my old one ended. Suddenly, with no gap in employment, my phone started ringing and I finally landed a job right past the 5 month mark.

I had mixed emotions about doing that. I wasn't sure how honest it was. But if employers want to play hardball with their discriminatory practices than I'm perfectly willing to do what it takes to win in their arena.

[Occulus]

37. Since businesses are not people, you owe them no expression of honesty, morality, ethics,

compassion, empathy, or in fact any other emotion or emotional attachment you would give actual people. You, as a living human being, are always- always always always- more important and deserving than the business in question. If our laws reflected that, we would have a far more just society than we do.

A business is a legal structure on paper, and nothing more. Oh, it may have a physical location, but it's as alive as a drinking glass.

Businesses are sociopathically amoral entities with one and only one goal, ever, period, end of line: profit. This goes for every business everywhere. Never ever forget that, and never ever let someone running a business try to shame you into doing what's "right" if you don't feel you shouldn't or simply don't want to, because it will always be right for the business, first, last, and period.

You did what's right for you and were successful, and that is really the only thing in the equation you presented that matters at all. I wouldn't lose any sleep or waste any mental energy on questions of morality and honesty related to an entity to whom those things can mean nothing.

[Blanks]

29. I finally got a job.

I was doing like someone else suggested above. I was in business for myself. I'm in my 50's and we updated my résumé so that it didn't show the years (joined the army in '79 - do the math). I didn't actually make any money in my business; I had business cards made and handed them out and contacted folks looking for work.

I'm not making as much as I was before I got laid off, but I enjoy what I'm doing so far. We could probably scrape by on what my wife makes, but we weren't moving in the right direction and I was concerned that if I didn't get back into the game, I wouldn't be able to later.

We still really need some kind of infrastructure spending bill in order to keep busy in the years to come. I'm working for a firm that designs subdivisions again. We could do sewage treatment plants and extend water lines and lift stations and sidewalks and roads and street improvements, but the government needs some skin in the game. If our government spent on these things instead of war, there would be plenty of work to go around.