The Long Term Unemployed are Doomed

When companies are looking to hire people, they scan through the résumés they get in the mail and their first step is to throw out all the résumés of people who’ve been unemployed for a long time. This is research based on pretty well-designed experiments that control for other variables beyond long-term unemployment.

Rand Ghayad is able to show that employers have a strong bias (ten to twenty times less likely to contact) against candidates with more than six months of unemployment, even if their resume is virtually identical to a candidate who has been unemployed for a shorter period of time.

Real Workforce reintegration

It seems that the government would benefit by subsidizing companies to provide short term work (1 month every 6 months or whatever duration and structure to alter the hiring probabilities) to keep unemployed people employable. It needs to be crafted so that the industry views the work as valid experience. This would be an alternative to straight UI and retraining.

Other major ways to get the unemployed back into the workforce
* mobilization for a major war (like WW2)
* massive public service hiring
* large scale relocation assistance to low unemployment areas

Youth unemployment – never being able to enter the job market

Europe has worse unemployment and US unemployment statistics understate the problem. US labor force participation is far lower and if unemployment statistics were the same as those in the 1970s then unemployment would be higher.

Spain has record high youth unemployment rate of 57.4% and Greece under 25 unemployment is 58.0%

Long Term discouraged workers are hidden from labor statistics

The seasonally-adjusted SGS Alternate Unemployment Rate reflects current unemployment reporting methodology adjusted for SGS-estimated long-term discouraged workers, who were defined out of official existence in 1994. That estimate is added to the BLS estimate of U-6 unemployment, which includes short-term discouraged workers.

The U-3 unemployment rate is the monthly headline number. The U-6 unemployment rate is the Bureau of Labor Statistics’ (BLS) broadest unemployment measure, including short-term discouraged and other marginally-attached workers as well as those forced to work part-time because they cannot find full-time employment.

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