Unemployment: A Long Term Problem; No End in SightBy: Mike Tuttle - January 3, 2014
CNN Money reported recently about one woman’s struggle to find a job. Lena Rouse was an IT analyst at a regional bank and was laid off from her job. She has 2 Master’s degrees – one in business and one in IT. She has 22 years of work experience. And she spent all of 2013 unemployed in Columbus, Ohio, the largest city in the state, and home to five Fortune 500 companies.
Rouse’s tale is becoming all too common. And people are asking the question, “If someone with 2 Master’s degrees, that much experience, and a good résumé can’t find a job in over a year, what hope is there for the rest of us?”
Rouse’s story gets even more frightening when you factor in the news that federal funding for long-term unemployment benefits was not renewed before legislators headed home for the holidays last year. Rouse received her last benefit check this week.
According to Labor statistics, 37% of unemployed people have been out of work for at least 6 months. These folks are entering a phase of unemployment that renders then virtually unhireable.
“I’ve heard from recruiters at larger companies, and they will absolutely tell you they don’t like to hire long-term unemployed people,” Rouse said. “They think our skills are less sharp.”
Twenty-two years of experience gets trumped by 6 months of unemployment? And some people are working freelance as fast as they can, even taking additional training as they can afford it, to keep up with their professions.
A Fundamental Change
More and more, folks are starting to realize that a fundamental change has taken place over the past few years since the market crash and recession of 2008. They listen to financial news shows and hear about how much “the economy” has bounced back, how great “the market” is doing. But the very next news story talks about how unemployment numbers are still high, even new unemployment claims. They hear political parties blame each other. They hear economists bicker about models for recovery. But no one is answering the question: If the market is better, why aren’t the jobs coming back?
MoneyNews reported last year on the meteoric rise in temp jobs – positions with few, if any, benefits, abysmal working conditions, and no expectation of long-term employment, much less permanence and retirement.
Businesses are moving to a temp model. The days of in-house Human Resources, long-term hiring, retirement, and good benefits are gone. Corporations used the 2008 crash as cover for divesting themselves of their most troublesome resource: people. No one could blame them for laying off workers. Everyone was doing it. But during the tumult of the economic recovery, businesses went out and changed their structure entirely.
No more hiring. Now they contract with a temp agency who does all the screening and dirty work for them, including the firing.
According to the Bureau of Labor Statistics, over one-fifth of job growth since the recession ended in 2009 has been in the temp sector. In fact, temp work is outpacing traditional hiring tenfold.
The “coal towns” of last century are gone. But now we have “temp towns,” neighborhoods or whole towns where even people with vocational training can’t get entry-level factory work without being first directed to a temp agency.
One of the worst effects of such a model is the conundrum over health insurance. Commonly in the United States, getting health insurance was tied to ones job. If the U.S. business community is moving toward a temp model, how can one be expected to get health insurance through work? Even if that person has been working steadily and receiving a paycheck for weeks, they are still under contract, and their “employer” is not required to provide them health insurance.
All these factors, and many more like them, come into play every time a person sits down with today’s version of the Help Wanted classifieds – a job search website or app. They watch useless job postings scroll by, positions they long ago applied for and never could even get more than an automated email reply to. Many postings are outright scams, and it takes applicants weeks to suss out the chaff.
It’s a problem that won’t likely be solved anytime soon.
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