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Sometime around 2010, employers developed a reluctance to hire workers who were not already employed. Employment postings began to note that those not currently employed would not be considered, and recruiters stipulated the same. At that point in time, the national unemployment rate was distressingly close to 10%.
Now, there seems to be a population made up of the chronically unemployed, unable to secure work simply because they have been jobless for too long.
Six to nine months out of work? Forget it
The Great Recession has left its mark in many ways, one of which is stubbornly high unemployment. Part of the problem appears to be that, sometime between six and nine months of joblessness, a worker becomes unemployable.
The Wall Street Journal describes an interesting study in which researchers found that applicants who had been out of work for fewer than six months were more able to secure employment than those unemployed for six months or longer. This situation was the most intense for low-skilled workers; after applicants had been out of work for a full nine months, finding a job became nearly impossible. College graduates did not suffer from this stigma, however.
Another study found similar results. A researcher with the Federal Reserve Bank of Boston found that prospective employers exhibited four times the interest in applicants that had not yet hit the six-month unemployment mark -- even if these job seekers had fewer of the relevant qualifications than applicants who had been jobless for over six months.
A dearth of qualified applicants?
And, yet, employers complain that there just aren't enough workers around to fill their open positions. This phenomenon is most glaring in the housing sector, where home builders have groused time and again that all the qualified construction workers seem to have vaporized since the housing crash.
The employment squeeze is so serious, according to the National Association of Home Builders, that nearly half of its members reported being unable to finish projects on time earlier this year. Just this past May, 48% of builders couldn't sign on enough framers to keep up with the workload.
In retail, a similar situation has evolved over the last few years, whereby available positions have doubled, but hiring hasn't risen to the challenge, staying essentially flat.
What can be done?
The problem is serious, and likely at least part of the reason the economy hasn't bounced back more quickly. An unemployment rate above 7% seems to be the new normal -- but I don't see a true recovery occurring while so many are unable to find work.
In early 2011, the U.S. Equal Employment Opportunity Commission took a look at this issue, and testimony from the Executive Director of the National Employment Law Project encouraged the EEOC to use anti-discrimination laws to try to halt the practice. Still, it persists and is likely hard to pin down. After all, being out of work for six months or longer isn't a protected category under federal or state laws.
Government can't really tell employers who to hire, but honey would likely work better than vinegar. For instance, state employment departments could funnel long-term, qualified workers to employers, and sweeten the deal with some sort of incentive program if companies agree to give these applicants a trial run.
Likewise, finding out from private-sector employers why this conundrum exists -- and using that knowledge to counsel the long-term unemployed -- might help increase the likelihood that those applicants will meet with success.
As for the home builders, their argument that the most qualified construction workers were immigrants that left the country after the crash sounds suspect. Surely, U. S. citizens could be enticed to enter the industry, despite lingering concerns about the health of the housing sector. Home builders have an excellent resource at their disposal, namely the NAHB -- which could retrain workers with rusty skills and attract new workers through new skill-development programs.
Two issues that are crucial to a long-lasting economic recovery are housing and the experience that qualified workers bring to companies gearing up for growth. Right now, these elements are not living up to their potential. Until they do, a full rebound from the financial crisis will remain out of reach for us all.
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