Don't Drink the Tea. Think With the WE.
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Jul
2011
27

“Given that the average duration of unemployment today is nine months, limiting a search to the ‘recently employed,’ much less the currently employed, disqualifies millions.”

The New York Times today wrote an insightful piece about the number of unemployed Americans caught in the vicious jobless cycle: companies are choosing to steal workers away from other companies rather than hire workers who have been out of the job market for a few months. This is leading to frustration among younger workers trying to re-eneter the workforce and is causing some older workers to simply give up and retire. The legalities of this practice are questionable but broadly accepted. Some states are seeing it as enough of a problem that they are passing laws aimed at breaking the cycle. Many of these states hope to make it illegal to publicly post that the unemployed are not welcome in a Job Listing, but this doesn’t necessarily solve the problem.

The practice is common enough that New Jersey recently passed a law outlawing job ads that bar unemployed workers from applying. New York and Michigan are considering the idea, and similar legislation has been introduced in Congress. The National Employment Law Project, a nonprofit organization that studies the labor market and helps the unemployed apply for benefits, has been reviewing the issue, and last week issued a report that has nudged more politicians to condemn these ads.

Given that the average duration of unemployment today is nine months — a record high — limiting a search to the “recently employed,” much less the currently employed, disqualifies millions.

With the number of job applicants on the rise, companies are using the situation to demand the best. It is a buyers market and they are taking advantage. They are eliminating the unemployed, those with bad credit histories and those falling behind on their bills. The cycle exhibits a classic chicken-and-egg quality as the long-term unemployed obviously need new jobs to pay off their debts.

There is no definite solution to the problem but something has to be done at some point.

The best solution, economists say, would be to encourage job growth more broadly, which may initially involve poaching people from other companies but could eventually draw even the least desirable workers back into jobs. During the boom years of the late ’90s, the labor market was so tight that ex-convicts had relatively little trouble finding work.

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