Helping the Long Term Unemployed

A recent article by Matthew O'Brien at the Atlantic describes recent research by Josh Mitchell of the Urban Institute on who are the long term unemployed.  You can view the article here: http://www.theatlantic.com/business/archive/2013/08/who-are-the-long-term-unemployed/278964/

For those who are not familiar with the term, long term unemployed, it is used to define those individuals who have been out of work for more than six months. Many of them have been out of work for several years.  One of the most distressing aspects of our recent recession and current recovery has been that the number of long term employed has grown significantly and has stubbornly remained high, even as jobs are being created throughout the economy.

The demographic information shows that, as Mr. O'Brien put it, the long term unemployed "1) are a bit older, and 2) got laid off from their last job".  According to the charts, in other areas such as race and education, they are roughly similar to the wider workforce. The scene that unfolds from looking at this data is that those who are part of the long term unemployed, on average, were potentially forced out of their previous positions due to age (in manufacturing, technology, or certain service industries that prize youth) or were forced out due to lay offs in shrinking or cyclical industries (manufacturing again, construction, others).

This scenario implies that job creation could be assisted by a couple of different methods, some of which are already available.  Job re-training exists in many forms and has long been a stable of governments looking to assist constituents that have lost jobs due to structural changes in an industry.  In fact, there are special benefits to those who lost jobs due to overseas competition.  Perhaps these programs are being under marketed or under utilized?  If more people were able to be re-trained, it may help those who were laid off due to industry wide reasons find gainful employment.  However, it is very easy to say that in abstract, far different to say that to someone who has performed and mastered the same job for 25 years and may not be eager to learn or take a risk spending a few years to learn a new skill and start at the bottom of a profession.

This leads to a separate suggestion: encouraging an increase in job training tied to short term employment contracts.  These programs exist and are widespread for young people and others, often called internships and/or apprenticeships.  Companies take on interns for a limited time, and as long as its a paying internship, the intern receives revenue and job experience. This is critical for those starting out as they may rapidly realize the career they started on was not for them, or that more  education is required for them to succeed in the industry their internship was in.  Perhaps if retraining programs for those who were laid off or who were "aged off" of a job were tied to a short term employment program people would have greater willingness to try a new career and employers would have a greater risk tolerance for hiring them.  Oftentimes it is a fear of risk on both sides, employees who do not yet know exactly what they want to do and employers who do not want to hire someone with little or no experience, that keep these people out of the workforce.

By designing programs with time limited employment contracts developed to encourage employee growth and limited long term risk to companies, perhaps some of these long term unemployed can begin the process of returning to gainful employment.  As always, we welcome any and all comments on this.

Posted in: Atlantic,Ideas,Long Term Unemployed