Say it with me – the long-term unemployed are not lazy. Nor are they coddled, hammocked or enjoying a coordinated, taxpayer-funded vacation. They are, however, extremely unlucky, and getting unluckier by the day.
A new Brookings study that tracks the fates of those unlucky workers who don’t manage to find stable new jobs in their first few weeks of unemployment suggests that this post-layoff tailspin is distressingly common.
It already was known that the longer workers have been out of a job, the lower their chance of finding work in the coming month. The Brookings paper – by the former Obama administration economist Alan Krueger and his Princeton colleagues Judd Cramer and David Cho – took this analysis a step further. What about (gulp) these workers’ longer-run prospects?
It turns out that from 2008 to 2012, only one in 10 people who were already long-term unemployed in a given month had returned to “steady, full-time employment” by the time government surveyors checked in on them a little more than a year later. “Steady” in this case means that they were working for at least four consecutive months. And the other nine in 10 workers? They still were out of work, toiling in part-time or transitory jobs or had dropped out of the labor force altogether.
In other words, the vast majority of people caught in long spells of joblessness do not find work again, or at the very least have trouble hanging on to whatever replacement jobs they had initially thanked their lucky stars for.
It’s unclear why unemployment becomes increasingly self-perpetuating. Perhaps it is merely selection bias – that is, the most desirable jobless workers get picked off early, leaving the less desirable workers behind to rack up more and more weeks of unemployment. But the Princeton researchers had difficulty detecting obvious differences between the short-term unemployed and the long-term unemployed.
Such demographic similarities suggest that something about the experience of joblessness tarnishes workers’ marketability.
Workers’ skills may deteriorate as they spend more time on their couches instead of in cubicles or on work sites. Professional networks might also fray, which is especially damaging for those in sales.
One implication of the Brookings research is that policymakers should have done more to prevent the short-term jobless from falling into long-term joblessness in the first place. Of course, time machines are rarely an effective policy tool.
Which is why many economists have been hoping that a strengthening recovery would be enough to help the nation’s four million long-term jobless workers. As demand picks up, many analysts have declared, businesses would have no choice but to absorb workers with more pockmarked resumes.
Alas, the Brookings paper makes that deus ex machina appear unlikely. The authors looked at the reemployment chances for long-term unemployed workers around the country and found that these workers do not fare substantially better in states with booming job markets (e.g., North Dakota) than in states with struggling job markets (e.g., Michigan).
Which means that even as the overall U.S. economy improves, those already deeply scarred by the financial crisis are unlikely to share in the bounty.
• Catherine Rampell, a former economics reporter for The New York Times, writes a twice-weekly column for The Washington Post.