I wanted to comment on this great article by Catherine Rampell, The Help-Wanted Sign Comes With a Frustrating Asterisk, which is all about how employers are looking for workers with jobs right now rather than hiring from the long-term unemployed. Two quick points:
- This image of a collection of want ads was in the article:
At an event at the FDR Presidential Library on the creation Social Security, there was a blow-up of Great Depression-era ads about discrimination against older workers, a problem that was one of the motivations behind Social Security:
These are similar. Indeed, older workers are more likely to be long-term unemployed at this point in the recession. From Pew’s recent report on long-term unemployment:
Using the CPS data, Pew calculated that the persistent problem of long-term unemployment is occurring across education and age groups but those who are older than 55 are most likely to remain jobless for a year or more. Additionally, a high level of education only provides limited protection against long-term unemployment — the rates are similar across degree attainment: 31 percent of unemployed workers with a bachelor’s degree have been out of work for a year or more, compared to 36 percent of high school graduates and 33 percent of high school drop-outs.
Why aren’t the older, long-term unemployed dropping out of the labor force already? The Federal Reserve Bank of San Francisco wrote in Labor Force Participation and the Future Path of Unemployment that “trends in retirement and health benefits will probably remain in place and the recession’s severe shock to wealth will likely compel even greater numbers of retirement-age workers to stay in the labor force.” Or health care is so expensive, housing is in a mess and retirements are so shaky older workers need to find a job. We could bolster Social Security and temporarily lower the retirement age, we could do something about the housing market, we could push for more jobs, etc. Or we could give 66 year olds the fun experience of buying health insurance on the private market.
- When we dug into some of the unemployment -> employment movement by duration in May, I was surprised that long-term unemployment was increasing as percent of jobs gained.
It is very hard for the long-term unemployed to find jobs. But what I’ve seen makes me think it is combination of a rapid and quick series of layoffs during the recession (creating a long-term unemployed cohort) and an issue of a lack of jobs for everyone since then, rather than a bifurcated labor market. Meanwhile employers can sit on job openings longer, as there is not enough aggregate demand or a strong-enough workforce to make them hire more.