Long-term unemployment plagues many job hunters

http://www.kansascity.com/2014/04/07/4943974/long-term-unemployment-plagues.html

April 7
BY DIANE STAFFORD
The Kansas City Star

If Cheryl Rider has to start her work life over in a $9-an-hour job, she’s going to do it where she doesn’t have to scrape ice off her windshield in the morning.

Rider can find wry humor in her intent to move to Florida, but there’s little sunny about her circumstances. Unemployed and job hunting since November 2012, the 59-year-old woman is an unwilling epitome of the nation’s long-term unemployed.

She’s one of about 3.7 million long-term job hunters — slightly more than one-third of the total unemployed — who have been searching for 27 weeks or more, the government’s official definition of long-term joblessness.

Studies also show that, like Rider, a larger share of the long-term unemployed is over age 50 and unmarried compared to job hunters with shorter unemployment periods.

The long-termers are members of what a Brookings Paper on Economic Activity this spring termed an “unlucky subset” of the unemployed, a group whose joblessness has gone on far longer and in a greater percentages than recorded in past economic recoveries.

A survey of more than 300 workers who had been unemployed for at least a year, released in January by CareerBuilder, painted a depressing picture. Three in 10 hadn’t been on a job interview in that whole time; four in 10 said they didn’t have enough money for food; one in 10 had lost their homes, and one in 10, regardless of age, were relying on their parents for income.

Congress is debating, but unlikely to grant, a five-month extension of federal unemployment benefits, retroactive to the end of December, when previous extended federal benefits programs ended. Between 1 million and 2 million long-termers lost that unemployment safety net.

In addition, some states, including Kansas and Missouri, have either passed laws or are working on bills that cut the eligible weeks of state unemployment benefits down from the previous limit of 26 weeks to as few as 15.

***

Workers who have exhausted jobless benefits and drained their lifetime savings and other assets expect a renewed work life far different from the one they lost.

Rider’s employment ended in a broad corporate downsizing, a legacy of the Great Recession. She’d never had re-employment trouble before, so wasn’t initially worried. Now she is. Her unemployment benefits ran out in July 2013.

“My retirement savings will run out in about three months,” she said last week. “The only thing left to do is sell my house.”

After a career with telephone companies in the Kansas City area, Dallas and Atlanta, Rider has set “a drop-dead April 15 deadline” to land a good job in the Kansas City metro. If she doesn’t get the kind of sales or account management position she wants, she’ll put her house on the market and relocate to the Tampa-St. Petersburg area.

In Florida, she hopes to move into a senior living complex with low rent compatible with the low income she expects to earn in whatever service or entry-level job she takes.

“Even in good times, the long-term unemployed are on the margins of the labor market, with diminished job prospects and high labor force withdrawal rates,” according to the Brookings paper. And, “even after finding another job, reemployment does not fully reset the clock for the long-term unemployed, who are frequently jobless again soon after they gain reemployment.”

Those are grim words that appear to be peculiar to the U.S. recovery from the Great Recession. Similar long-term unemployment woes aren’t as persistent in Europe, not in duration of unemployment nor share of the unemployed.

Research for Brookings by Alan Krueger, Judd Cramer and David Cho showed that the overall U.S. unemployment rate of 6.7 percent in February remained elevated “because of the large number of people who have been unemployed long term.” (The unemployment number for March, published Friday by the U.S. Bureau of Labor Statistics, stayed at 6.7 percent.)

Their analysis showed that the long-term unemployed are spread throughout the country, throughout occupations, and across education, income, race and gender categories. And, even in a low unemployment state like Kansas, the long-term unemployed continue to have trouble returning to work.

U.S. House Speaker John Boehner and many other Republicans are against reinstating any unemployment benefits extension, partly on the grounds that further benefits would delay people’s job searches. Many motivated searchers disagree.

But, even if a $9 billion bipartisan deal crafted in the U.S. Senate were to make it through the House, the proposed extension would be a small salve to long-termer’s financial wounds. The deal called for just five months of benefits retroactive to January.

With scant expectation for continued jobless benefits, the Obama administration turned in January to encourage hiring of long-termers. The Society for Human Resource Management joined in the effort, a notable recognition given that human resource departments have been widely fingered as the gatekeepers weeding out job candidates who have employment gaps.

“It’s time for us to begin thinking differently,” said Henry Jackson, president and chief executive of the human resource organization. “Employers must be able to recognize the human capital potential in the ranks of the long-term unemployed.”

Ken Heitland couldn’t agree more. The long-termer, a Kansas City area resident who observed his one-year job hunt “anniversary” on March 31, said he’s repeatedly disappointed to not make it to the interview stage.

“I have wonderful experience and energy, and I can contribute for a long time,” said Heitland, who holds a Ph.D. in instructional systems technology, “but I don’t get a chance to make my case.”

The human resource society has published guidelines for members to review their hiring practices to make sure they’re not making unwarranted assumptions about long-termers and whether their skills are up to date.

“Many of the long-term unemployed are out of work for reasons beyond their control,” the guidelines state. “Consequently, an employment gap has less bearing on an applicant’s qualifications or probability for success.”

***

Job market analysts note that the nation’s long-term unemployment problem is worse than the “official” 6.7 percent unemployment rate indicates. An alternate measure of unemployment, which includes workers who have stopped their job searches temporarily, set the rate at 12.7 percent in March.

That heftier percentage includes members of the labor force who say they’d like to work but aren’t currently looking, or they’re too discouraged to search because they don’t think anything is available for them, or they’re working in a part-time job they don’t really want because they haven’t found a fulltime job.

A report on long-termers, written last year by Josh Mitchell at the Urban Institute, pinpointed the nexus of long-term and discouraged workers and job hunters who have decades of experience.

For example, he wrote, 14.8 percent of long-term unemployed workers, 15.7 percent of employed workers, and 17.8 percent of discouraged workers are age 56 to 65. In contrast, only 8.1 percent of the newly unemployed are age 56 to 65.

Mitchell also found that single parents are “disproportionately likely to be long-term unemployed. They represent 13.3 percent of the long-term unemployed but only 7.6 percent of the employed.” Singles’ long-term status is “particularly worrisome because there is no spouse to ensure against the lack of labor market earnings.”

Another worrisome characteristic: “Those with some college but no degree are making up an increasing share of the long-term unemployed,” Mitchell said.

***

Although long-term unemployment has stayed unprecedently high, some job market experts think long-termers finally might have improved re-employment odds.

John Challenger, chief executive at the outplacement firm of Challenger, Gray & Christmas, said the jobs recovery “is approaching a tipping point that could see a rapid acceleration of hiring among those who have been out of work the longest,” partly because of retraining and hiring incentive programs established by city, state and federal governments and partly because more jobs are becoming available.

More companies also have eliminated “unemployed need not apply” barriers and are following the best-practice guidelines for screening applicants.

But Challenger also noted that many long-termers have lost professional confidence and have significant financial worries that make it difficult to present themselves well, even if they make it to interviews. As for all job hunters, the best advice is to work through personal contacts to get a foot in the door, possibly before an opening is advertised.

Still, “you may need to consider working for less money than you imagined, working in a different industry, or accepting a job title that differs from your aspirations,” he said. “Your primary objective at this point needs to be getting back on the payroll so you can start filling in the experience gap.”

Advice for long-term job hunters

 

• Stay connected or get connected with former business colleagues, classmates, association members and other acquaintances. Use social media like LinkedIn, email and phone calls to let them know what you can offer.

 

• Your resume needs to be readable and emphasize your skills and experience, but don’t count on it to land you an interview. Work through your personal contacts.

 

• Do your best to be positive. Don’t talk about your length of unemployment or show anger or frustration. Talk about your energy, capabilities and adaptability.

 

• Cast a wide net. Don’t expect to replace what you lost. Look for and accept jobs that pay less or have less prestige and use them as ways to re-enter the workplace and move up.

 

Advice for employers

 

• Don’t set applicant screening policies or tools to automatically eliminate candidates with employment gaps.

 

• Acknowledge that unemployment occurs for many reasons, often not by the worker’s choice, and don’t assume the unemployed person has outdated skills or other problems.

 

• Stop requiring dates of birth, last employment or college graduation on application forms. Ask for that information only if pursuing a candidate based on skills and experience indicated.

 

• Train human resource employees to understand instances in which transferability of skills apply so that they don’t screen out viable candidates with closely related experience.

 

Effects of long-term unemployment

 

Among more than 300 workers with extended jobless histories, these percentages were reported in January in CareerBuilder survey:

 

• Not having enough money for food – 25 percent

 

• Strained relationships with family and friends – 25 percent

 

• Maxed out credit cards to pay bills – 12 percent

 

• Lost house or apartment because of inability to pay mortgage or rent – 10 percent

 

• Moved back in with parents – 9 percent (Among 35- to 54-year-olds, 13 percent moved back with their parents.)

 

• Moved to a less expensive location – 4 percent

 

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