Friday, December 20, 2013

Only 1% of Unemployed get Job Interviews

According to a report by the Federal Reserve, only about 10% of people who are currently employed can get a job interview; so what are the odds if one is unemployed? Especially if they have been out of work for 6 months when their State unemployment benefits come to an end? (Extended Federal UI benefits end shortly after Christmas.)

A paper by Rand Ghayad (from the research department of the Federal Reserve Bank of Boston) showed that the long-term unemployed are struggling to find work, no matter how many job openings there are. Using the broader measure of unemployment (the U-6 rate or the U-7 rate) there are about 6 people unemployed for every job opening (and that doesn't include millions of so-called "discouraged workers" who are no longer counted).

According to earlier research by the National Bureau of Economic Research, the chance of being called for a job interview falls by 45% as unemployment lengthens from one to eight months.

According to other research by the Federal Reserve Bank of San Francisco, by the time someone has been out of work for six months, the chance for reemployment drops to 10%.

Last year in a New York Times article called The Human Disaster of Unemployment, economists Dean Baker and Kevin Hassett said that a worker between the ages 50 and 61, and who had been unemployed for 17 months or longer, only had about a 9% chance of ever finding a new job.

A U.S. Government Accountability Office study identified employer reluctance to hire older workers as a key challenge that older workers face in finding reemployment; and that the number of workers age 55 and over who are experiencing long-term unemployment has grown substantially since the recession began.

But all studies show that, the longer one was unemployed, the lower their chances were for ever finding work again.

Now it appears that finding a job for anyone (whether they're older workers or younger workers,) is becoming even more difficult than previous thought --- whether they are currently employed or unemployed.

Below are excerpts from a 29-page study by Rand Ghayad titled The Jobless Trap regarding " job interview request rates".
"Three recent audit studies on nonemployment discrimination report results [that are] consistent with the long-term jobless having significantly lower chances of being invited to job interviews...The rate of decline in interview requests appears to drop sharply after six months of nonemployment...Résumés for employed applicants have a 10.25 percent chance of receiving an interview request...Evidence suggests that discrimination is an important factor to why individuals with long nonemployment spells are doing poorly in the labor market."
So if working people only have a 10.5% chance of a call back for a job interview, then what are the odds for someone who's been unemployed for 6 months? Or what if they've been out of work for one year or longer? What are their odds for being called back for a job interview? And what are the odds for them of actually being hired for a job if they were lucky enough to land a job interview?

Rand Ghayad may have answered those questions for us in an interview he did for the Wall Street Journal: "Once you are long-term unemployed, nobody calls you back."

Conclusion: People with jobs have about a 10% chance of a getting a job interview (but not necessarily hired for that job), whereas someone who has been out of work for 6 months or longer might only have a 1% chance (and any longer, their chances fall, as the odds become even more remote).

And if someone has been unemployed for more than a year (when the Bureau of Labor Statistics stops counting these "discouraged workers"), then the odds are most likely impossible --- and they may never work again (unless that person is a prodigy, such as a 16-year-old genius holding multiple PhDs and is discovered by a company like Microsoft.)

And because the Federal Reserve predicts the labor force participation rate to decline even further in the years ahead, as was noted at Bill Moyers' website, the long-term unemployment trap could get worse than it already is today.

If you lose a job next year, good luck, you will need it --- just ask over 20 million other Americans who have already exhausted all their unemployment benefits, and still remain unemployed and are no longer counted in the "official" unemployment rate.

Below are charts from Rand Ghayad's report
Rand Ghayad study (Boston Fed) Unemployment and  job interview request rates

Bud Meyers' Related Posts:
Discouraged Workers, not Disabled, Shrinking the Labor Force

Long-Term Unemployed Now Desperate

Millions are Middle-Aged and Unemployed -- and Screwed

For High School Grads, the Labor Market is Brutal

Falsely Blaming Baby Boomers for Smaller Labor Force

Finally! A GOP Jobs Plan will Soon be Launched!

Jobs Report: Lipstick on an Economic Pig

3.8 million Unemployed keep another 9.7 million Jobless

High School Drop-Out Debunks Economics Professor
Fed Expects Further Decline in Labor Force
* Here's a news item: "The unemployment rate is 100 percent for the folks huddled over computer terminals at the Salem unemployment office."

* You contact Bud Meyers at his blog.

Monday, December 16, 2013

Labor Force Declining Faster than Forecast

As was noted in a recent post, just since the Great Recession, the U.S. has had 15.4 million high school grads --- most of whom we would have expected to enter the work force (even if going on to enroll in college). But in a report by Rutgers, they noted a whopping 44% of high school students were unemployed.

And during that same period of time we also had an additional 6.8 million Americans exiting the work force to go on Social Security retirement and disability. In other words, just in the past 5 years alone, we've had many more "non-starters" than "quitters" in the work force that has contributed to a declining labor force participation rate (LPR). Meaning, the declining labor force participation rate isn't just because of Baby Boomer retiring or lazy people "gaming the system" to go on disability. SSDI awards (not applications) actually declined last year.

Millions more are not even counted as part of the labor force any more because after being laid off they couldn't find jobs again (they're called "discouraged workers"). Long-term unemployment is defined as those without jobs for longer than 6 months, but long-long-term unemployment are those who are no longer counted after one year. These people would have also contributed to the declining labor force participation rate (if they were still counted).

In a good article at the Economic Populist titled Employment Stats Misleading, Paul Craig Roberts (former Assistant Secretary of the Treasury under Ronald Reagan) notes that the unemployment rate can decline simply because the definition of the work force excludes " discouraged workers" who are no longer counted as part of the labor force after one year.

"Structural" unemployment is a longer-lasting form of unemployment caused by fundamental shifts in an economy and occurs for a number of reasons –– such as, when workers may lack the required job skills, or if they live too far away from where jobs are available ( and are unable to move there). The housing bubble burst and the history of stagnant wages has also contributed to less "mobility" in the labor force, as was reported in several studies.

Paul Craig Roberts noted in his article that real median household income in the U.S. has declined from $56,189 in 2007 to $51,371 in 2012 (a decline of $4,818 or 8.6%); and says real per capita income has declined from $29,554 in 2007 to $27,319 in 2012 (a drop of $2,235 or 7.5%.) People simply can't afford to move to where their might be jobs --- or when a partner or spouse might be expected to quit their job to relocate, because many households nowadays rely on two or more incomes.

So while jobs may be available in some areas (and in some industries), there is a serious mismatch between what companies need and what workers can offer. Structural unemployment can also be made worse by other factors, such as automation (robotics, etc.), as well as by offshoring to lower-wage countries and outsourcing to lower wage States.

Several studies have also concluded that the current problem with long-term unemployed doesn't appear to be because unemployed Americans lack the skills (except in a few anecdotal cases), so this theory has been mostly debunked. As it was recently noted, the editorial board of the New York Times writes:
"There is a durable belief that much of today’s unemployment is rooted in a skills gap, in which good jobs go unfilled for lack of qualified applicants. This is mostly a corporate fiction, based in part on self-interest and a misreading of government data....when there are many more applicants than jobs, employers tend to impose over-exacting criteria and then wait for the perfect match. They also offer tightfisted pay packages."

Hal Salzman, Ph.D., Professor at the Edward J. Bloustein School of Planning and Public Policy and Senior Faculty Fellow at the Heldrich Center, was part of a Congressional panel addressing the impact of the H-1B visa program on the economy, innovation, and the workforce. In an article: What Shortages? The Real Evidence About the STEM Workforce, he says, "Despite naysayers, the nation is producing more than enough quality workers in scientific and engineering fields." (Read: Debunking the STEM Crisis Myth)
And because of the housing bubble burst, and the fact that there is only currently one job for every 3 unemployed (1:3 using the U-3 rate with an unemployment rate of 7% --- or 1:6 using the U-6 rate with an unemployment rate of 13.2 %.), could also indicate that many of the unemployed in the U.S. currently live too far from where there might be any available jobs. Factories can move from State to State (or overseas) faster and easier than people can.

As Paul Craig Roberts noted in his article, of the jobs that have been created during the U.S. recovery, most  were " mainly the same lowly-paid, part-time, nontradable domestic service jobs that I have been reporting for a decade or longer." And he also agrees with the statistician John Williams (of www.shadowstats.com) that the REAL unemployment rate is closer to 23.2%.

The labor force participation rate (LPR) is defined as the share of the civilian non-institutionalized population that is employed (working) or unemployed (looking for work). This doesn't include millions of "discouraged workers". The LPR reached its peak of 67.1% in 2000. But it has been declining ever since that time, dropping sharply in the last recession, and currently sits at around 63%.

Since the LPR only counts those in the "labor force", and not all those who are unemployed and want a job (creditable estimates range from 20 to 35 million as of 2013), the LPR would actually be dramatically lower. The Economic Policy Institute estimated that there are at least 5.66 million "missing workers".

David Andolfatto of the St. Louis fed wonders how much of the recent decline in LPR is due to a bad economy ("cyclical factors" --- occurring in cycles; recurrent) and how much of it might be due to long-term trends associated with changing demographics (structural factors). He refers us to a paper by the Boston fed, where they write:
"We provide compelling evidence that cyclical factors account for the bulk of the post-2007 decline in the U.S. labor force participation rate."
But David Andolfatto says, "Much of their estimate of LPR trend, however, seems to be based on a particular BLS projection" and then refers us to a St. Louis fed paper titled A Closer Look at the Decline in the Labor Force Participation Rate with this chart and all projections predicting a further drop in the LPR.

Labor force participation rate forecast 2013

In 2006 the Brookings Institute also published a study: The Recent Decline in the Labor Force Participation Rate and Its Implications for Potential Supply --- then stated in their conclusions:
"Most of the decline in the participation rate during and immediately following the 2001 recession was a response to business cycle developments ["cyclical factors"]. However, the continued decline in participation in subsequent years and the absence of a significant rebound in 2005 appear to derive from other, more structural factors...Projections from the model suggest that many of these structural factors will continue to put downward pressure on the participation rate for some time, so that any future cyclical fluctuations in participation will take place around a declining trend." [To date in 2013, there has been no "declining trend".]
And here is the Brookings Institute's chart from 2006, with their projection for the future U.S. labor force.

Labor force participation rate forecast 2006

Note that in their 2006 forecast of the labor force participation rate, the Brookings Institute predicted a decline to 63% by 2015 --- today in 2013 the Bureau of Labor Statistics shows that it's already at 63%.
Now let's also go back and look at the first chart and see where the St. Louis fed predicted the labor force will be in future years (Pretty scary.)

Structural unemployment (offshoring, outsourcing, technology, greater productivity, a rising population base, an increasing number of people looking to enter the work force, stagnant wages, declining household incomes, and more retirees and disabled persons) will continue to further the decline the labor force participation rate unless American companies bring back jobs from foreign countries (jobs that can also add other jobs due to the "multiple effect").

So the current problem with long-term unemployment appears to be, mostly because, not of a temporary business cycle (because of cyclical factors), but more long-term (or even permanent) because of structural reasons. Of course, there are other factors to consider as well. One example might be:
If an engineer were working at Boeing in Washington State, and then Boeing relocated its facility to South Carolina to pay workers a lower wage, and Boeing laid off the engineer, then the engineer may apply for unemployment benefits. But because the engineer relies on their spouse's second income to meet a mortgage payment (and they are underwater on their home), maybe because of financial reasons (or even personal reasons, such as in child custody cases) they can't sell their home and/or move to South Carolina --- meaning, the engineer could not relocate to reapply for their old job. And maybe the engineer is also an older worker (which employers have been reluctant to hire), so the engineer remains unemployed. And because no other comparable jobs were available, the engineer remained unemployed for so long during their initial job search that they eventually became "long-term unemployed", which further lessened their chances for reemployment --- not even for lower paying jobs, because either there were no available jobs (1 for every 3 unemployed), and/or because they were considered "over-qualified", and/or just because the engineer was an older and long-term unemployed person. Then maybe we can suppose that the engineer is long-term unemployed for both cyclical and structural reasons --- the factory moved when the engineer was unable to move (which translates to "declining mobility").
Even America's largest employers ( such as the government, Walmart and McDonalds) simply can not create enough jobs (even part-time low-paying jobs) for every one that needs a job. Maybe it's time that we rethink a basic income for all. Otherwise, with rising income inequality and the current trends in offshoring and outsourcing --- and declining wage scales (with the 30-year transition from a manufacturing economy to a service economy), America will have millions more people who will have not have any means in which to support themselves.

But yet, the GOP wants to raise the retirement age to 70 years old when millions of Americans over 50 (like the aforementioned unemployed engineer who has job skills) are still being denied jobs and are already finding it difficult to survive.

* Posted by ASAP Newswire contributor Bud Meyers

Friday, December 13, 2013

Can 4M on Jobless Benefits keep 20M Unemployed?

We have always appreciated Annie Lowrey's articles at the New York Times about the unemployed --- they are some of the best on the subject. However, a few things should be pointed out regarding her last article: Jobless Fear Looming Cutoff of Benefits.

It's been cited in several studies debunking the false "cause and correlation" claims about unemployment benefits being a cause of higher unemployment; or that extending federal jobless benefits also extends the duration of joblessness.

One report from the San Francisco Federal Reserve concludes: "We estimate that extended UI increased the overall unemployment rate by only about 0.4 percentage points in the recent episode, which is small in comparison with the peak unemployment rate of 10 percent."

And from this report, which says: "The unprecedented extension of unemployment insurance (UI) benefits up to 99 weeks from 2009 through mid-2012 appears to have lengthened duration by a small to moderate amount."

A study by the Congress Joint Economic Committee found that among the long-term unemployed, those eligible for benefits spent significantly more time looking for jobs than those who didn’t qualify: "In fact, since Congress enacted federal unemployment benefits, time spent looking for a job has tripled among the long-term unemployed who are out of work as a result of job loss."

According to the Economic Policy Institute, we could lose an additional 310,000 jobs by NOT renewing federal extended unemployment benefits for 1.3 million unemployed Americans.

Casey Mulligan (who also writes for the New York Times) says that jobless benefits make workers less likely to accept lower paying jobs, which keeps unemployment elevated. But those jobs would have to be very low-paying jobs to pay LESS than unemployment benefits --- and besides, Casey Milligan has already been thoroughly debunked.

For years the GOP has claimed that unemployment benefits is a disincentive for the jobless to look for work. Over 1.3 million jobless Americans will soon lose their federal extended unemployment benefits and another 2.4 million Americans will have their State benefits expire within the next 26 weeks. So, should we expect a surge of jobs created next year?

Remember: Only one third of the "reported" unemployed in the U-3 rate receive jobless benefits; so what's keeping the other two thirds from finding work?

Does anybody remember this headline on November 6, 2009 in the New York Times 49 months ago: "U.S. Unemployment Rate Hits 10.2%, Highest in 26 Years"? That was when the Bureau of Labor Statistics was reporting 15.7 million Americans were unemployed.

The Center on Budget and Policy Priorities reported 8.7 million job losses between the start of the recession in December of 2007 and when the recession "officially" ended in June 2009. In a recent statement, Secretary of Labor Thomas E Perez said, "The November employment report continues the 45-month trend of private-sector job growth with 8.1 million new jobs created over that time."

So for the sake of argument, let's say new jobs created cancelled out all the old jobs lost, and we were back to "even". Now keep in mind, over those same last 45 months of job growth, we also had 12 million young people who graduated from high school. In a 14-page report by Rutgers, they noted a whopping 44% of high school students were unemployed.
L.A. Times: "College-educated workers are taking jobs that don't require degrees. College graduates are tending bar and driving taxis, pushing people without degrees out of those jobs."
The labor force participate rate is not historically low because of retirees. Over the past 5 years, the U.S. has had an estimated 15.4 million high school graduates and 6.8 million newly retired and disabled workers ----- meaning: Since Obama's first year in office, the U.S. has had more "non-starters" than "quitters" in the labor force.

So how can cutting jobless benefits create more jobs for those who never entered the labor force to begin with, let alone create enough jobs for those who receive unemployment benefits, let alone create enough jobs for those whose benefits have already expired, let alone create enough jobs for those who never even qualified (or applied) for jobless benefits?

Counting discouraged workers who would still like a job, we have over 20 million people out of work, but we only have 3.7 million people receiving jobless benefits.

But as always, the unemployed will always appreciate Annie Lowrey's excellent work at the New York Times.

Tuesday, December 10, 2013

Wall St. Journal Blames Boomers for Lousy Work Force

Ever since the owner of Fox News bought the Wall Street Journal in 2007, it appears that the once esteemed and unquestionable newspaper appears to be much more ideological these days. Rather than just reporting "news" that could be significant to use by business leaders, economists, lawmakers and public policy advocates are attempting to make well-informed decisions, the WSJ often appears more bent in political propaganda in an attempt to sway outcomes and public opinion, rather than just reporting what's actually happening.

Fox News, who regularly blames the jobless and the poor for being jobless and poor, now has their sister company, the Wall Street Journal, blaming Social Security, older workers, retirees and the disabled for a 35-year record low in the labor force participation rate. And as soon as the almighty Wall Street Journal publishes something, everyone else in the media (without fact-checking) regularly jumps on their band wagon and just regurgitates their inaccurate bile. (On the face, this appears to be another back-door attempt by the WSJ to use generational warfare to divide young and old on the subject of Social Security).

As of today, the labor force participation rate is the lowest it's been since February 1978 when Jimmy Carter was president. But it's not just because the Baby Boomers have been retiring, that the work force is shrinking, this has been going on since late in the Clinton administration. The first Baby Boomer, who born in 1946 (and who became eligible in 2011 to retire at the age of 65) didn't retire until last year.

The labor force participation rate, according to data from the Bureau of labor Statistics:
Labor force participation rate -- 2000 to 2013
Labor force participation rate -- 1946 to 2013

The share of Americans 25 to 54 years old (who are in the labor force, either by working or actively looking for work), have also been dropping out of the labor force. The participation rate fell during the 2001 recession and has never recovered since then. Another slide began because of the 2008 financial crisis. But this trend among prime-working-age Americans cannot be simply explained away by retiring Baby Boomers, as the Wall Street Journal claims.

What the Wall Street Journal also never mentions, nor do the Fed studies that they cite, is the lack of new entrants into the labor force to re-supply any retirees (Boomers or otherwise).

According to the National Center for Education Statistics, the U.S. has had over 3 million high school graduates every year during the Obama administration --- those who would be potentially entering the work force for the very first time, even if they go on to also enroll in college.

So on average, theoretically, the U.S. would need to have 3 million retirees and disabled people every year going on the Social Security "dole" to necessarily break even on the labor force participation rate. But that hasn't been happening.

According to data from the Social Security Administration, as of January 2009 when Obama first took office, the U.S. had a total of 39,927,185 retired and disabled workers receiving a monthly Social Security benefit --- 32,484,808 retired and 7,442,377 disabled.

Almost 5 years later, as of November 2013, the U.S. had a total of 46,775,537 retired and disabled workers --- 37,833,877 retired and 8,941,660 disabled --- for a net gain of 6,848,352 retired and disabled workers (5,349,069 that retired and 1,499,283 who were awarded on a disability claim).
* It's also worth noting that, while disability "claims" were up in the aftermath of the Great Recession, a Congressional Budget Office study says claims are always up during recessions. But actual disability "awards" are down. Source: SSA (See the full post with data here)
Social Security disability awards

As for the high school graduating classes of 2008 through 2013, the U.S. has had an estimated 15,403,905 high school graduates --- a difference of 8,555,553 who might otherwise be in the labor force when compared to the additional 6,848,352 retired and disabled workers during that same period of time.
The Bureau of Labor Statistics reports that only 48.8 percent of the 3.2 million youth who graduated from high school (just from last year alone) were "in the labor force". In a 14-page report by Rutgers, they noted a whopping 44% of high school students were unemployed ----- meaning:

Since Obama's first year in office, the U.S. has had more "non-starters" than "quitters" in the labor force.

Last year, in a study by the Kansas City Fed (that the Wall Street Journal had cited) they reported:
"An analysis of labor market data suggests that there are no structural changes that can explain movements in unemployment rates over recent years. Neither industrial nor demographic shifts nor a mismatch of skills with job vacancies is behind the increased rates of unemployment."
And from the most recent study by the Philly Fed (dated November 19, 2013) that the Wall Street Journal had also cited:
"As of the first half of 2013, roughly 5 percent to 6 percent of individuals in the working-age population are out of the labor force because of disability, 16 percent to 17 percent are out of the labor force because of retirement, and the rest have left the labor force for other reasons."
Shigeru Fujita at the Philly Fed noted that the nonparticipation in the labor force (due to disability) raised the overall nonparticipation rate by 1.4 percent (between the beginning of 2000 and the end of 2011); but he also adds, "In the last two years or so, however, it has been flat, thus making no contribution to the overall decline in the participation rate." (In other words, not since the very first Baby Boomer retired last year.)

However, his study also noted that, "Nonparticipation due to retirement did not rise until the end of the Great Recession, but started to increase significantly in 2010. Since the start of 2012, it has been the only component that has contributed to the increase in the nonparticipation rate."

While although Shigeru Fujita doesn't specifically say so, I would also note that this increase for retirees was also because many older workers who lost jobs in 2008/09, had collected unemployment benefits until 2010 (when federal extended benefits were available up to 99 weeks in some states). But then when those UI benefits were exhausted (and after not finding work again), with no other options available to them, many of these long-term unemployed Baby Boomers were forced to take early Social Security retirements at the age of 62 (and/or prematurely raided their pension funds and 401ks). And many of those who were not old enough, applied for programs such as food stamps, TANF and Medicaid.

Older workers who were NOT laid off during the recession, were delaying retirements and working longer than expected to recoup losses in retirement plans and home equity values. Much of the churn rate has been because people were being laid off and then rehired again, and not just because older workers were leaving the work force (making room for new people) or because other workers were moving on to better jobs. (See the hires and separations in the Bureau of Labor Statistics JOLTS report.)

The study by Shigeru Fujita for the Philly Fed also goes on to say that "the number of disabled persons has been steadily rising". Yes, but as previously mentioned, only in proportion to the population, whereas, although disability "claims" have risen, actual wards have actually declined last year. When disabled people (after sometimes being out of the labor force for 3 years or longer while appealing their claims), and who are eventually denied for SSDI benefits, are STILL remaining out of the work force.

It's also important to note in the Philly Fed's study:
"There is no question that more workers dropped out of the labor force due to discouragement during and after the Great Recession and that there are more discouraged workers now than before the recession. These facts clearly reflect the continued weakness of the U.S. labor market."
So, as people are retiring (or being forced into early retirement), naturally this would also proportionately increase the share of older people "leaving" the labor force, but also because not enough new people are entering the labor force (providing a healthy churn rate) to fill the empty gaps left by older retiring workers.
In the conclusion of the Philly Fed's study --- in the very last lines of the very last paragraph --- Shigeru Fujita finally reveals:
"Lastly, unfortunately, I could not pin down an underlying cause of the increase in nonparticipation among those who do not want a job. This appears to be an important area for future research."
But yet, the Wall Street Journal has concluded the research for him, in the title of their recent article "Work Force Is Shrinking Because of Retiring Boomers". At the very end the Wall Street Journal's hit piece against old people, we learn that they are mostly concerned about the Fed curbing its bond-buying stimulus program at its policy meeting next week. (Read: Confessions of a Quantitative Easer and Real Money Matters to understand the Wall Street Journal's REAL concerns.)

Recap: Since Obama first took office (from 2008 through 2013) we've had 15.4 million high school graduates. During that same period of time we've had an additional 6.8 million retired and disabled people. In other words, the U.S. has had more "non-starters" than "quitters" in the labor force. Baby Boomers were born from 1946 and 1964 --- and the first Baby Boomer didn't retire until last year. But the labor force has been in decline for the past 14 years --- so it's numerically impossible to blame the Boomers for a declining labor force participation rate. The Wall Street Journal has (again) been debunked.

Monday, December 9, 2013

8 Million are Unemployed, Middle-Aged & Screwed

Does anybody remember this headline on November 6, 2009 in the New York Times 49 months ago: U.S. Unemployment Rate Hits 10.2%, Highest in 26 Years?

That was when the Bureau of Labor Statistics was reporting 15.7 million Americans were unemployed. This was before the Center on Budget and Policy Priorities reported 8.7 million job losses between the start of the recession in December of 2007 and when the recession "officially" ended.

In a recent statement, Secretary of Labor Thomas E Perez said, "The November employment report continues the 45-month trend of private-sector job growth with 8.1 million new jobs created over that time."

Now keep in mind, over those same last 45 months of job growth, we also had 12 million young people who graduated from high school. The Bureau of Labor Statistics reports that only 48.8 percent of the 3.2 million youth who graduated from high school last year were "in the labor force". In a 14-page report by Rutgers, they noted a whopping 44% of high school students were unemployed (So are we to assume that the other 6 million high school grads have either found jobs and/or are enrolled in college?)

The latest jobs report from the Bureau of Labor Statistics' (BLS) says we now have 10.9 million unemployed --- but they report that of those, only 4.1 million have been jobless for 6 months or longer (and might have once been eligible for federal extended unemployment benefits before they expire at the end of this year).

What does all this tell you, when the government is now saying that the unemployment rate went down to 7% --- the lowest since Obama was first elected in November 2008?

As of two years ago, almost 18 million long-term unemployed Americans (at some point in time during the Great Recession) received federal extended unemployment benefits (meaning they were unemployed longer than 6 months). Currently there are 1.3 million claiming extended unemployment insurance benefits, and they will immediately expire by the end of this month.

By some estimates, if we counted all the long-term unemployed, and those who exhausted all their unemployment benefits (those who the government calls "discouraged workers") and who no longer are counted by the government, we have closer to 30 or 35 million people out of work --- twice as many as we had out of work in October 2009 --- and more than 3 times the number that the government currently claims --- because the long-term unemployed have been incrementally dropped from the monthly tally over the past 5 years (little by little, so no one would notice --- but WE did!)

And how are we going to put 20 to 30 million jobless Americans to work when jobs continued to be offshored to lower-wage countries? (Many jobs that were once outsourced to China are now being outsourced to even lower-wage countries, such as Vietnam and Cambodia.)

Especially when employers are refusing to hire the long-term unemployed (such as older workers, like the Baby Boomers) --- how are THEY expected to survive if they are too young for Social Security and can't qualify for other retirement plans or pension benefits?

According to the most recent research by the Federal Reserve Bank of San Francisco, by the time someone has been out of work for only six months, their chances for reemployment drops to 10%. --- so what are the odds for the 7 to 8 million 99ers, those who have been out of work for 2, 3, 4, and 5 years?

Especially if they are older workers over 50 years old? Are their chances for reemployment down to 0% -- and could that be why so many are taking their own lives?

Unemployment Kills

Congress may soon have more blood on their hands.
Methods of suicide
Last May, from an article in the New York Times: Suicide Rates Rise Sharply in U.S.:
Suicide rates among middle-aged Americans have risen sharply in the past decade, prompting concern that a generation of baby boomers who have faced years of economic worry and easy access to prescription painkillers may be particularly vulnerable to self-inflicted harm.
"It is the baby boomer group where we see the highest rates of suicide," said the C.D.C.’s deputy director, Ileana Arias.

From another New York Times article this year, How Austerity Kills: "The correlation between unemployment and suicide has been observed since the 19th century. People looking for work are about twice as likely to end their lives as those who have jobs. Unemployment is a leading cause of depression, anxiety, alcoholism and suicidal thinking. Rates of such suicides were significantly greater in the states that experienced the greatest job losses. Deaths from suicide overtook deaths from car crashes in 2009. Austerity — severe, immediate, indiscriminate cuts to social and health spending — is not only self-defeating, but fatal."

PBS: A Centers for Disease Prevention and Control (CDC) study reported that among men and women age 55-64, there was a dramatic increase in rate of suicides from 1999 to 2010.

As PBS had reported in one broadcast, for Americans 55 and older, it takes about a year on average to find work, longer than for any other age group. One of the unforgettable lessons of statistics is that correlation does not equal causation. But when the data shows older (but not old) Americans out of work longer than others and older (but not old) Americans committing suicide at a higher rate than they have in almost a century, how can you help but wonder if the frustration of the former isn't contributing to the latter?

Huffington Post: As layoffs surged late in 2008, the Suicide Prevention Resource Center, a group based in D.C. and Massachusetts that helps organizations develop suicide prevention programs, reviewed two decades' worth of research on the question. It found that a "strong relationship exists between unemployment, the economy, and suicide.

Before Annie Lowrey went to work for the New York Times and wrote Caught in a Revolving Door of Unemployment, she wrote a piece for the Washington Independent called Death and Joblessness. She notes a paper by Timothy J. Classen of Loyola University Chicago and Richard A. Dunn of Texas A&M that found that mass layoffs and long spells of unemployment specifically were associated with increased suicide risk.
"I would be concerned that the increasing rate of long-term unemployment in the United States is having important consequences on the mental health of many American workers, and I would be concerned that we are going to see increased rate of suicide because of it," Dunn says.
Classen and Dunn found that unemployment does increase the risk of suicide. And not just once, but twice: First, just after the factory shuts down, and then again, about six months later, when unemployment insurance ends. The impact is strongest among men.

Dunn concluded, "The research suggests that the impact of losing your unemployment benefits is actually stronger than the impact of losing your job. How much stronger? We don’t know. But twice as strong, three times as strong. Some significant difference."

That is to say, duration of unemployment and loss of unemployment benefits are more important determinants of suicide risk than job loss itself.

The unemployed commit suicide at a rate two or three times the national average, researchers estimate. And in many cases, the longer the spell of unemployment, the higher the likelihood of suicide. Academic studies show that suicide rates tend to move with the unemployment rate. Researchers found that the unemployed were up to three times as likely to commit suicide, with middle-aged men the most likely.

Amy Rowland, a spokesperson for the CDC Injury Center, also noted a bump in the suicide rate for older male workers. "Studies done by other researchers show that economic strain and loss are risk factors for suicide.” she says.

In 2010 the suicide prevention hotlines were already showing signs of stress. In January 2007, as the recession started, there were 13,423 calls to the National Suicide Prevention Lifeline. A year later, by January 2008 there were 39,467. In August 2009, the call volume peaked at 57,625 (Most people contemplating suicide don't bother calling.)

The government has since granted National Suicide Prevention Lifeline (a nationwide toll-free hotline) an extra $1 million to increase programs in places with high unemployment rates.

Nobody knows how many suicides are associated with the recession because statistics lag about three years --- but looking at individual counties’ or cities’ data, there are ominous signs of a real spike.

According to a congressional study for the Centers for Disease and Control, the unemployed commit suicide at a rate of up to three times the national average, with middle-aged men the most likely. During the Great Depression, the suicide rate increased about 20 percent. The figures for the Great Recession might be much higher.

A spokesperson for the CDC Injury Center noted a bump in the suicide rate for older male workers: "Studies need to be done to better understand what might be occurring in this age group."

This is not just happening in the U.S. as researchers at the University of Hong Kong and other institutions examined suicide trends in 54 countries around the world, using data on unemployment, gross domestic product and suicide deaths from the World Health Organization, the International Monetary Fund and the U.S. Centers for Disease Control and Prevention. Their analysis revealed an association between unemployment and suicide rates, which was especially strong for men in countries that used to have low unemployment.

Les Leopold, an author and the executive director of the Labor Institute in New York, asks in an article earlier this year, "Is cutthroat capitalism pushing a growing number of Baby Boomers to suicide?"
"There's no question about it--American baby boomers are taking their own lives like never before. Suicide rates in the United States jumped dramatically for 35- to 64-year-olds between 1999 and 2010, according to a new report from the Centers for Disease Control and Prevention (CDC)." (I would suggest to Congress that they read the entire article.)
The U.S. government is fully aware of the problem we have here at home: that when unemployment insurance ends, suicide rates soar --- that's why they had increased funding to suicide hotlines. Yet Congress still remains unwilling to extend unemployment insurance benefits to the long-term unemployed.

NBC reported that suicide rates for middle-aged Americans now surpassed those during the peak during the Depression --- but now, even Democrats are talking about cutting food stamps too.

The Nation reports that on the same day that President Obama eloquently described his vision of an economy defined by economic mobility and opportunity for all, Senate Agriculture Committee Chairwoman Debbie Stabenow (D-MI) was busy cutting a deal with House Agriculture Committee Chairman Frank Lucas to slice another $8 to $9 billion from food stamps (SNAP).

The congressional "hunger games" began when Senate Democrats voted to cut $4.1 billion from food stamps, or SNAP. Senate Agriculture Committee Chairwoman Debbie Stabenow said it was a matter of slicing “waste, fraud and abuse” from the program.

Joel Berg, executive director of the New York City Coalition Against Hunger, said "That was the first time in history that a Democratic-controlled Senate had even proposed cutting the SNAP program. The willingness of some Senate Democrats to double new cuts to the program is unthinkable."

So our government (who many once said were only Republicans, but are now Democrats too) may soon have more blood on their hands.

* Also see a related post about older unemployed workers: Suicides Spike for the Long-term Unemployed

Need help? In the U.S., call 1-800-273-8255
National Suicide Prevention Lifeline

Suicides Spike for Long-term Unemployed

The situation for the long-term unemployed, especially for older workers, has gone from painful to desperate to deadly.

Annie Lowrey, in an excellent New York Times article titled Caught in a Revolving Door of Unemployment, notes that long-term joblessness is now one of the defining realities of the American work force. She described long-term unemployment as a trap that becomes more and more difficult to escape with each passing month.

She also points out that "a newly jobless worker has about a 20 to 30 percent chance of finding a new job. By the time he or she has been out of work for six months, though, the chance drops to one in 10, according to the research by the Federal Reserve Bank of San Francisco." Can you imagine the odds for someone who's been out of work for 5 years --- since the crash in 2008 ---especially if they're over 55 years old?

Megan Woolhouse at the Boston Globe: "Rand Ghayad is a Northeastern University researcher and visiting scholar at the Federal Reserve Bank of Boston who has published groundbreaking work on long-term unemployment. Ghayad mailed 4,800 fictitious resumes and recorded employer response rates, and concluded that companies frequently screen out applicants who are unemployed for more than six months.

Ghayad found that employers showed four times more interest in candidates unemployed for six months or less — even if they had less experience and fewer qualifications than those experiencing longer bouts of joblessness. Older unemployed workers, he found, were most frequently passed over, viewed as having outdated skills or as being “damaged goods.”

“I believe workers aged 55 and older are not only suffering from unemployment discrimination, but also age discrimination, which is making it nearly impossible for them to find work in this sluggishly growing economy,” Ghayad said. “Long-term unemployment among older workers should be our priority as a nation.”

A great many of the long-term unemployed have been ultimately forced out of the labor force, with no place to turn, depleting retirement savings, or collecting Social Security early, or turning to public assistance. Many also suffer debilitating depression, and in the worst cases become suicidal, feeling as if they have failed or no longer have value.

Right now, there are few services and institutions dedicated to helping the long-term unemployed, heightening the isolation they likely feel.

A research paper by Ghayad and William Dickens (Federal Reserve Bank of Boston) showed that the long-term unemployed are struggling to find work, no matter how many job openings there are. In an interview for the Wall Street Journal Ghayad says, "Once you are long-term unemployed, nobody calls you back."

In an exposé by The Atlantic, they found that employers intentionally screen out the long-term unemployed, even if their résumé has the same work experience as someone unemployed for less than six months.

Josh Boak, and AP economics writer, says "For people who've been out of work for more than six months, the outlook has gone from painful to desperate. More than four years after the last recession ended, long-term unemployment remains near record levels, with 4.1 million Americans out of work for more than six months and still struggling to find jobs. What makes the problem so vexing is these workers, typically older, have qualifications that should provide the path to employment, namely experience, accomplishment, and college degrees."

Aldo Svaldi at The Denver Post writes, "More than 6 million workers had exhausted their unemployment benefits at the end of last year, with a disproportionate share of that group over age 50. Employers don't readily admit to discrimination, but it shows up in not-so-subtle ways --- such as job postings that say "must be currently employed". The longer someone stays unemployed, the more depleted they become — financially, professionally and mentally."

According to a study by the Government Accountability Office released last year, workers 55 and older have experienced consistently longer periods of unemployment than younger workers, as employers seek cheaper labor and look to skirt potentially higher health care costs.

A U.S. Government Accountability Office study identified employer reluctance to hire older workers as a key challenge that older workers face in finding reemployment. The GAO also found that the number of workers age 55 and over experiencing long-term unemployment has grown substantially since the recession first began in 2007. Other findings from their report:
  • Individuals age 55 and over have consistently experienced longer durations of unemployment than younger workers.
  • The median length of unemployment has more than tripled for older workers.
  • Several experts interviewed said long-term unemployment diminishes the likelihood that older workers will ever be re-employed.
  • Long-term unemployed older workers who exhaust unemployment benefits before turning 62 are particularly at great risk.
  • The effects of job loss are likely to be longer-lasting for older workers, including them being more likely to lose subsequent jobs and experience additional unemployment spells.
  • Losing their jobs has taken a toll on their sense of self-worth, reduced their standard of living, and put them at risk of long-term financial hardship.
  • Long-term unemployed older workers struggled to pay health insurance premiums and some said they had found it difficult to secure private insurance because of high costs or preexisting conditions. Many had forgone seeking medical care altogether, and stopped taking prescribed medications because they could not afford them.
A study by the Urban Institute also reported that older adults took longer to find work when they lost their jobs; and that wage losses were especially steep for unemployed workers in their fifties who managed to become re-employed:
  • Adults in their fifties spent more time unemployed than their younger counterparts.
  • Half of workers age 50 to 61 who became unemployed spent at least six months out of work.
  • It took more than nine months of job search for half of unemployed adults age 50 to 61 to find work
  • Unemployed adults in their fifties were about a fifth less likely than their counterparts age 25 to 34 to become reemployed. (See conclusions on page 5)
A newer study from the Urban Institute shows that even if the economy returns to full employment, many workers are still likely to face long-term unemployment --- 40.5 percent of long-term unemployed job seekers are age 16 to 25. This suggests that the youngest job seekers are likely to experience shorter spells of unemployment.

According to an op-ed by economists Dean Baker and Kevin Hassett in the New York Times (which was also referred to in a congressional hearing for older workers*) a worker between the ages 50 and 61, and who had been unemployed for 17 months or longer, only had about a 9 percent chance of ever finding a new job. And the longer they were unemployed, the lower their chances for ever finding work again.

Andrew Sum, director of Northeastern University’s Center for Labor Market Studies, concurs: "The longer you’re unemployed, the more likely you are to leave the labor force, and the more likely it’s an early retirement for you.”
* A few statements made at the Congressional hearing last year for older workers who were long-term unemployed:
  • Senator Herb Kohl (D-Wisconsin) "While Americans were hit hard by this recession, the ramifications for older workers are particularly severe. Once older workers lost their jobs, they struggled far more than other groups to find work again."
  • Charles A. Jeszeck at the U.S. Government Accountability Office: "An October 2011 AARP survey of workers age 50 and over found that nearly a quarter said that they had used all of their savings during the past three years. Further, long-term unemployed workers nearing age 62 may opt to claim benefits earlier than they would have if they had still been working. Claiming benefits early, particularly for life-long low earners, can increase the risk of poverty at older ages."
  • Joseph Carbone, President and CEO of The WorkPlace: "It's compounded for older workers. They're dealing with the stigma of being older. They're dealing with the prejudices that come with it, with the discrimination that comes with it [and the] perception that lots of folks have that you're looking for something for nothing --- or your skills are too dull to be of help to anybody. It's a challenge if you're under 50. It's a category 5 hurricane if you're over 50." (In an interview for PBS Carbone also said "They're carrying a double whammy, not just the long-term unemployment, but they're 50 and older.)
  • Christine Owens - Executive Director of the National Employment Law Project: "When they [older workers] become unemployed they are more likely to remain so and to remain so for longer periods of time. Moreover, older unemployed workers are three times as likely as younger unemployed workers to become unemployed because they have lost their jobs."
Carl Van Horn, director of the John J. Heldrich Center for Workforce Development at Rutgers University in New Jersey says:
"There is really no demographic age group that has as much difficulty getting back in the job market if they lose a job. There is definitely bias against older workers, even if you have skills. They are depressed. They can't deal with rejection anymore. Many of them are requiring food stamps and Social Security Disability Insurance. There has been a high early-enrollment in Social Security, which is a lifetime punishment for people who are forced to do this, because many are taking roughly one-third less at 62."
AARP's Public Policy Institute surveyed unemployed baby boomers and found that while 71% blamed their unemployment on the bad economy, almost half also said they believed age discrimination was at play.
A U.S. Government Accountability Office study identified employer reluctance to hire older workers as a key challenge that older workers face in finding reemployment.

Since the Great Recession began, many older workers have been out of work for five years or longer, caught between a rock and a hard place, because no one will hire them and they are not yet old enough to qualify for regular Social Security.

All in all, the Baby Boomers were the greatest victims of the recession and its grim aftermath. These Americans in their 50s and early 60s --- those near retirement age who do not yet have access to Medicare and Social Security --- have lost the most earnings power of any age group.

And a study by economists at Wellesley College found that people who lost their jobs in the few years before becoming eligible for Social Security, also lost up to three years from their life expectancy, largely because they no longer had access to affordable health care.

Many older workers have run through their retirement savings: One survey of post 50s found 25 percent had used up all of their savings between 2007 and 2010. And those who are forced to take Social Security at age 62 are stuck at a lower benefit for life. According to the GAO report, someone who exited the workforce at that age would receive a median monthly benefit of $909 -– compared to $1,212 for people who wait to take Social Security until age 66.

Researchers found that the long-term unemployed will suffer deep mental and emotional scars from the experience. A Gallup study in the Economic Journal found that those who were out of work for at least a year took longer to recover emotionally than those who had lost a spouse. The results showed quantifiable declines in their health, their self-esteem and their overall emotional well-being. One Gallop Poll showed unemployed adults and those not working as much as they would like are about twice as likely as Americans who are employed full time to be depressed.

Research also suggests that long-term unemployed Baby Boomers may die sooner too, because their health, their income security and their mental well-being were battered by the Great Recession at a crucial time in their lives. The study cited also found that for people in that age group, the long-term unemployed were also more prone to suicide.

The New York Times: Suicides Spike 30% for Baby Boomers:
  • Suicide rates among middle-age Americans have risen sharply in the past decade, prompting concern for a generation of baby boomers who have faced years of economic worry.
  • The most pronounced increases were seen among men in their 50s, a group in which suicide rates jumped by nearly 50 percent.
  • It is the baby boomer group where we see the highest rates of suicide.
The consequences of unemployment has been be far-reaching, as we've seen from this last recession with a higher-than-usual increase in suicides. Many people reported that they had lost or feared losing loved ones.
"The rate of suicide in the United States rose sharply during the first few years since the start of the recession, a new analysis has found. In the report, researchers found that the rate between 2008 and 2010 increased four times faster than it did in the eight years before the recession. Every rise of 1 percent in unemployment was accompanied by an increase in the suicide rate of roughly 1 percent, the study found. The analysis found that the link between unemployment and suicide was about the same in all regions of the country."
So for many of the long-term unemployed, they're situation has not only become fatalistic, it's been fatal.