It’s easy to find a job, for the majority

• March 11, 2010
• 3 comments
• Posted in Latest Posts, The Economy

Newly out of work? Odds are, it will take you only a few weeks to find a new place.

That’s a surprising fact, considering the horrendous number of workers who are unemployed. Compared with other recessions, we’ve seen an epic loss of jobs. But the difference between who does and who doesn’t get a job tells a story with profound, long-term implications.

For the majority of the unemployed, job offers started turning up around last summer. In fact, new opportunities are rising faster than they did in the past two recoveries for some 60 percent of workers. They’re unemployed for 26 weeks or less.

The story gets even better when you look at short-term unemployment–people out of work for no more than five weeks or so. This number is improving dramatically. About 20 percent of workers are finding new jobs fast. That’s actually a long-term trend. The jobless rate for people out of work for only a short time has been moving down since the early 1980s. Today, its approaching its record low.

Who gets jobs fast in this economy? People with at least some higher education and trained for skilled service jobs. Many women fit this bill. With the skilled labor market so tight, their wages are likely to increase.

Now we come to the disaster area–the long-term unemployed: people out of work for 27 weeks or more. Many more men are in this category, partly because of the jobs lost in the manufacturing and construction industries. Their skills can’t be transferred easily to other occupations, and retraining has had only modest success. Older Boomers would be in this number too–workers in their late 50s and early 60s that companies are reluctant to hire.

There are 6 million long-term unemployed, representing 40 percent of the people looking for jobs. That’s a record post-Depression high. It’s costing the economy roughly $100 billion a year in unemployment pay and other emergency benefits, and more than that in political fury and angst. These are the people who eventually vanish from the labor force–the “unemployed” who aren’t counted any more. They grow poor. They never work again.

Lakshman Achuthan, managing director of the Economic Cycle Research Institute, broke down those unemployment rates for me. He says that only longer recoveries help the long-term unemployed. When the broad labor market tightens, businesses start retraining the wrongly-skilled.

“The explosion of information technology brought us out of the the jobless recovery of the early 1990s,” Achuthan says. “Today, developing new green industries would help, but we’d need the equivalent of three IT’s to attack a long-term unemployment pool as large as the one we have today.” (For the record, he expects a short recovery not a long one. The next recession could drive the percentage of long-term unemployed even higher than it is today.)

So there are the two Americas, to borrow a phrase. Jobs are going begging for the properly skilled. The recovery will sweep up able young people too. But there’s no place for out-of work mid-life people of average talent, the ill-educated, or the people with skills that the new economy doesn’t need. That’s a personal and national tragedy. It carries both a financial and political cost that we don’t yet fully understand.

What’s more, we’re letting our schools fall apart. So we’re training the next generation of long-term unemployed workers now.

Tags: jobs, the economy, unemployment

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