Does Longer Unemployment Mean Longer Unemployment?

These words were the lead in the December 3^rd Washington Post: “Employers added only 39,000 jobs last month, a sharp decline from the 172,000 created in October, the Labor Department reports.” Result? The direct unemployment rate went up from 9.6% in October to 9.8% in November, the worst unemployment numbers in the past seven months. But for those who’ve been out of work for an interminable period of time, those were just reminders of how bad things are likely to be for them for a very long time.

Here are some of the explanations why this recession seems to be producing such a massive aggregation of people who have been unemployed for more than six months (6.2 million strong according to the Department of Labor):

· The less productive employees were the first to go.

· The industries and businesses that failed first were those that were destined to fail sooner or later, and the folks working there had the kind of skills that were phasing out.

· Sales representatives have lost their contacts on viable leads (and the old clients have long since been co-opted by remaining sales staff).

· In industries where technology is changing rapidly all the time, idle experts aren’t able to hone their older skills to the accelerating changes as continuing workers can.

· Longer unemployment suggests someone who has lost an edge.

Indeed, time out of work is a predictor of future employability: “New data from the Labor Department, provided to The New York Times, shows that people out of work fewer than five weeks are more than three times as likely to find a job in the coming month than people who have been out of work for over a year, with a re-employment rate of 30.7 percent versus 8.7 percent, respectively.” New York Times, December 2^nd.

We’ve already seen how we need 250,000 new jobs a month for almost a decade to recreate the employment rates we once enjoyed in 2007 (see my “Nine/Twelve Long Years” blog on November 14^th), and at that rate, age will have taken a toll on a number of the currently unemployed, and like many European nations, we could begin to see a new underclass of reasonably educated people permanently unable to find work. And there is a negative vibe that seems to attach to folks who have tried repeatedly to find a job… without success: “Constant rejection not only discourages workers from job-hunting as intensively, but also makes people less confident when they do land interviews. A Pew Social Trends report found that the long-term unemployed were significantly more likely to say they had lost some of their self-respect than their counterparts with shorter spells of joblessness.” NY Times.

What happens if we get used to high unemployment and give up caring? “The real threat, economists say, is that America, like some of its Old World peers, might simply become accustomed to having a large class of permanently displaced workers. ‘After a while, a lot of European countries just got used to having 8 or 9 percent unemployment, where they just said, ‘Hey, that’s about good enough,’ ’ said Gary Burtless, a senior fellow at the Brookings Institution. ‘If the unemployment rates here stay high but remain relatively stable, people may not worry so much that that’ll be their fate this month or next year. And all these unemployed people will fall from the front of their mind, and that’s it for them.’” The Times. If we ever do get complacent, perhaps we won’t be holding our heads so high anymore.

I’m Peter Dekom, and we really can never give up trying or caring.