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career, economy, job search, unemployment

Long-Term Unemployment and job search: Troubling statistics

Recently, The Atlantic reported on results of a recent experiment at Northeastern University regarding job search and long-term unemployment. A study performed by Rand Ghayad, a visiting scholar at the Boston Fed and a PhD candidate in economics at Northeastern University, and William Dickens, a professor of economics at Northeastern University sent out 4800 fictitious resumes to employers for 600 job openings. 3600 of the fictitious resumes were for unemployed people. What they learned was that how long you have been out of work was the primary selection characteristic about whether a resume was called back. People with relevant experience who had been out of work six months or more got called back less than people with less relevant experience who had been out of work less time.

In short, this study demonstrates that this group of employers discriminate against the long-term unemployed.

And unfortunately, there are a lot of people who fit into the category of long-term unemployment. In January, it was reported that 3+ Million people were considered ‘hopelessly unemployed’–people who want a job but haven’t actively searched for one in at least a year. And that isn’t counting discouraged workers–those who are ready and available for work, who have looked for a job in the prior 12 months, but are not counted as ‘unemployed’ because they have not searched for employment in the past 4 weeks.

China Gorman, HR consultant, executive coach, and thought leader, recently touched on another disturbing trend: Youth unemployment. We have seen a 42% drop in youth employment from 2000 to 2012. And rates of employment among high school graduate, non-college bound youth dropped 25% to 45%–the lowest figure since the survey was started in 1965.

What does this all mean? One, employers are not giving people a fair shake–because in certain labor markets/sectors, the abundance of available talent means they don’t have to take a chance on someone that has been unemployed for a period of time. (There’s got to be a reason they’ve been unemployed that long–right?) Two, we are shortchanging our future by not ensuring that our youth have opportunities to earn a living wage and build skills. What do we expect to happen in our workforce in 5-10 years if we don’t provide employment and training opportunities now?

Here in Seattle, it’s easy to overlook these disturbing statistics; our unemployment rate is at 5.2% and in the tech sector is likely half that figure. However, it’s present here too.  I know people that have struggled for a long period to find a new opportunity–some are still struggling.

Stay tuned in Part 2 for what we can do about it.

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