A Nation at Waste: The long-term unemployed and job discrimination

A Nation at Waste: The long-term unemployed and job discrimination

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By Hina Shah

President Obama in his State of the Union speech was upbeat as he pronounced that we had the lowest unemployment rate in over five years.  But this optimistic forecast glosses over the epidemic of the long-term unemployed.  There are 3.9 million Americans who have been unemployed 27 weeks or longer and 2.6 million who have been unemployed for 52 weeks or longer, according to the National Employment Law Project’s report.

Stigmatization and discrimination against the long-term unemployed creates a major barrier to ending this epidemic.  Rand Ghayad, a doctoral student of economics, conducted an experiment where 4800 computer-generated resumes of fictitious workers were sent out with identical credentials with varying unemployment lengths and industry experience.  Workers who reported being unemployed for six months or more were almost never contacted.  “It isn’t that firms aren’t finding the right workers,” Ghayad said, “but that employers are screening out the long-term unemployed.”  This discrimination disproportionately impacts workers who are non-white, unmarried, disabled, impoverished and less educated – the groups who are over-represented among the long-term unemployed.

The President is on the right track when he asked business CEOs to take the pledge to not discriminate against the long-term unemployed and issued a directive to federal agencies not to screen out long-term unemployed workers from consideration for openings.  But even with these measures, we face a real crisis of creating a permanent class of jobless Americans, as Congress gridlocks over extending benefits to the long-term unemployed.  In a recent survey, 25 percent of the long-term unemployed reported that they did not have money for food and 10 percent have lost their home or apartment because they could not pay their rent or mortgage.  Economists all agree that long-term unemployment slows overall economic growth and hurts the nation as a whole.  Harder to quantify, but still real, is the toll that chronic unemployment takes on a person’s confidence and sense of dignity as well as their skill level.

We must do more to insure that the long-term unemployed are not abandoned on the road to economic recovery.  The National Employment Law Project recently issued nine recommendations to address long-term unemployment.  These are bold recommendations that call on the President, Congress and the business community to act to create new jobs and end the practice of discriminating against long-term unemployed individuals.

It is time to look again at the Roosevelt New Deal programs, like the Works Progress Administration that put 8.5 million Americans back to work building bridges, roads, public parks and strengthening America’s infrastructure. If we want to avoid a permanent subclass of citizens living in the shadow of our economy, the President must embrace a bolder path.

Hina Shah

About Hina Shah

Hina B. Shah is an Associate Professor of Law and Co-Director at the Women’s Employment Rights Clinic (WERC) of Golden Gate University School of Law, addressing employment and labor issues faced by low wage and immigrant workers.

Avoiding the impending catastrophe for 1.3 million long-term jobless Americans

Avoiding the impending catastrophe for 1.3 million long-term jobless Americans

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By Afshin Mozaffari

As we celebrate this holiday season, let’s remember our fellow citizens who are struggling with the unprecedented chronic unemployment caused by the Great Recession of 2008. While the most recent reports indicate the rate of unemployment is down to 7 percent, the lowest unemployment rate since November 2008—the number of long-term unemployed (those without a job for 27 weeks or more) continues to be stubbornly high. Indeed, while the unemployment rate declined overall by .3 in November, the actual number of long-term unemployed people remained essentially the same at 4.1 million. Compare this to 2007, when only around 1.2 million people were long-term unemployed.

In the face of this reality, Congress excluded extension of unemployment benefits from the bipartisan budget compromise it reached last week. Without congressional action, this means some 1.3 million workers will lose their extended unemployment benefits on December 28th of this year. And the number of chronically unemployed people losing benefits will grow every month thereafter. Needless to say, long-term unemployment and cessation of unemployment benefits is a tragedy for the unemployed workers and their families. However, persistent long-term unemployment also presents troubling long-term repercussions for the economy as a whole, including declining labor force participation, less consumption and a smaller tax base.

Long-term unemployment “is not exclusive to any one industry [or] occupation.” The demographic composition of the long-term unemployed is also diverse, but it is evident that workers ages 55 and older suffer a higher percentage of long-term unemployment of all age groups. Men are also more likely than women to be long-term unemployed.

The economic affect of long-term unemployment hinges, in part, on the issue of whether the workers who are unemployed for a long period of time would at some point become unemployable.  This was the subject of a 2012 study by William Dickens and Rand Ghayad of Northeastern University who studied the relationship between job openings and unemployment. Generally, the more job openings there are, the fewer workers there are out of work.  But when it comes to the long-term unemployed, a rising number of job openings does not seem to substantially reduce the number of long-term unemployed workers.  According to the Nobel Prize winning economist, Paul Krugman, this dangerous trend is creating “a permanent class of jobless Americans.”  He predicts that this reality and the loss of unemployment benefits, will in turn, depress the economy as a whole.

The extension is essential to the long-term unemployed, like Sheri Minkoff of Pittsburg, Pennsylvania, who is about to lose her only source of income. Sheri lost her job for the second time in the past 5 years.  The first time, she lost her job as a director of a nonprofit that lost its invested funds to the massive Ponzi scheme by Bernie Madoff that defrauded Sheri’s employer and thousands of other investors of billions of dollars.  Sheri was able to find employment two years later as a coordinator at a domestic violence shelter, only to lose that position due to the lack of funding.  During this period, Sheri has lost all of her retirement benefits and savings.  At the age of 50, she spends six days per week trying to find employment.  Sheri, and more than a million long-term unemployed Americans will continue to struggle to find employment even with the extension of unemployment benefits. The benefits will not only help cover their basic necessities like food and housing, but will enable them to continue their active search for work.

The White House and Democrats in Congress have called for extending the unemployment benefits, and vowed to try to retroactively extend unemployment benefits in early 2014.  There are also a number of outside groups that are organizing a campaign to pressure Congress to extend the Emergency Unemployment Compensation Program. The National Employment Law Project (“NELP”), a non-partisan organization that conducts research and advocates on issues affecting low-wage and unemployed workers, is collecting and distributing true stories of the long-term unemployed and urging everyone to contact their congressional representatives.  Without congressional action, more than a million Americans and their families will be left in desperate financial straits and the economy will suffer as a result.

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