The Real Reason There Are So Many Long-Term Unemployed?

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long-term unemployed: crowd at a hiring fair

The average unemployed American now spends 35 weeks job-hunting, an amount almost double what it's been at any point before the Great Recession. And one thing that everyone agrees on: Even though more and more companies are hiring, people who have been unemployed for six months or more aren't getting those jobs, according to new research from the Federal Reserve Bank of Boston.

A lot of experts have explanations: The long-term unemployed have rusty skills, or they didn't have the right skills to begin with in our new computerized, knowledge economy; their networks have eroded; or, they're addicted to hand-outs. But new research suggests another possibility.

First the numbers -- for those unemployed for less than six months. As you can see in these charts, as job vacancies have gone up, their unemployment has gone down, in a nice smooth curve. Makes a lot of sense.



But when it comes to those unemployed for 27 weeks or longer, the unemployment rate hasn't been going down that much, even though vacancies are on the rise. Hence the hook-shape.



To test why the situation was so screwy for the long-term unemployed, Rand Ghayad, a doctoral candidate at Northeastern University, sent out 4,800 fictional resumes. All the made-up applicants could boast identical credentials, but had been unemployed for different lengths of time, and worked in various industries. He found that employers almost never got in touch with applicants who had been out of work for over six months.

That's bad news for the 4.7 million Americans -- or 38 percent of the unemployed -- who fall into that category. As Ghayad puts it: "It isn't that firms aren't finding the right workers, but that employers are screening out the long-term unemployed."

Heartbreak Of Long-Term Unemployment




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