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New reality in the U.S.: forever jobless

The longer people stay out of work, the more trouble they have finding new work.

That is a fact of life that much of Europe, with its underclass of permanently idle workers, knows all too well. But it is a lesson that the United States seems to be just learning.

This country has some of the highest levels of long-term unemployment — out of work longer than six months — it has ever recorded. Meanwhile, job growth has been, and looks to remain, disappointingly slow, indicating that those out of work for a while are likely to remain so for the foreseeable future. Even if the government report today on unemployment shows the expected improvement in hiring by business, it will not be enough to make a real dent in those totals.

So the legions of long-term unemployed will probably be idle for significantly longer than their counterparts in past recessions, reducing their chances of eventually finding a job even when the economy becomes more robust.

Russ Muncy of Tampa, who has been looking for work for 18 months, thinks prospective employers are "definitely … not even looking at you" if they know you've been out of work a long time.

After a 30-year career in civil engineering, he was earning more than $75,000 a year when he lost his job. Now, Muncy, who turned 63 last month, is taking college courses as he continues his job quest.

"I think that in order to get back in — unless you really know someone — you have to either start at the bottom again or maybe halfway between the bottom and the middle," he said. "You can't go back."

New data from the Labor Department, provided to the New York Times, show that people out of work fewer than five weeks are more than three times as likely to find a job in the coming month than people who have been out of work for over a year, with a re-employment rate of 30.7 percent vs. 8.7 percent, respectively.

Likewise, previous economic studies, many based on Europe's job market struggles, have shown that people who become disconnected from the work force have more trouble getting hired, probably because of some combination of stigma, discouragement and deterioration of their skills.

Several factors lead to this downward spiral of the unemployed.

In some cases, the long-term unemployed were poor performers in their previous positions and among the first to be terminated when the recession began. These people are weak job candidates with less impressive resumes and references.

In other instances, those who lost jobs may have been good workers but were laid off from occupations or industries that are in permanent decline, like manufacturing.

But studies comparing the fates of similar workers have also shown that the experience of unemployment itself damages job prospects.

If jobless workers had been in sales, for instance, their customers might have moved on. Or perhaps the list of contacts they could turn to for leads is obsolete. In particularly dynamic industries, like software engineering, unemployed workers might also miss out on new developments and fail to develop the skills required.

Still, this explanation probably applies to only a small slice of the country's 6.2 million long-term unemployed.

"I can't imagine very many occupations and industries are of the type that if you're out for nine months, the world passes you by," said Heidi Shierholz, an economist at the Economic Policy Institute, a liberal research organization. "I think this erosion-of-skills idea is way overplayed. It's probably much more about marketability."

Many unemployed workers fret about how to explain the yawning gaps on their resumes. Some are calling themselves independent "consultants" or "entrepreneurs" so they can claim some sort of work experience since being laid off.

Eddie H. Diaz, 59, of Tampa, has worked part time in a computer business from home and dabbles in real estate during a two-year-plus job search. He hopes to land a full-time job with a company in part to get insurance benefits.

Diaz isn't convinced there is a bias against the long-term jobless as much as a bias against hiring older workers.

"I just don't think they like older people in the new up-and-coming companies," he said. "We bring a lot of ideas and baggage. … I think it mainly comes down to hiring an older man and how long are they going to be good for.

"I'm looking for something that will take advantage of my experience. Some of these businesses are making a big mistake not hiring us. … I'm a piece of gold."

Employers are reluctant to acknowledge any bias against the jobless, and many say they try to take broader economic circumstances into consideration.

"Generally speaking, when the economy's good and someone's been out of work for a year, you might look at them funny," said Jay Goltz, who owns five small businesses in Chicago. "These days I don't know if you can hold it against somebody."

Even so, old habits die hard.

"From what I've seen, employers do tend to get suspicious when there's a long-term gap in people's resumes," said James Whelly, deputy director of work force development at the San Francisco Human Services Agency.

It does not help when job seekers are repeatedly rejected — or worse, ignored. Constant rejection not only discourages workers from job-hunting as intensively, but also makes people less confident when they do land interviews.

"People don't have money to keep up appearances important for job hunting," said Katherine S. Newman, a sociology professor at Princeton. "They can't go to the dentist. They can't get new clothes. They gain weight and look out of shape, since unemployment is such a stressful experience. All that is held against them when there is such an enormous range of workers to choose from."

The real threat, economists say, is that America, like some of its Old World peers, might simply become accustomed to having a large class of permanently displaced workers.

"After a while, a lot of European countries just got used to having 8 or 9 percent unemployment, where they just said, 'Hey, that's about good enough,' " said Gary Burtless, a senior fellow at the Brookings Institution. "If the unemployment rates here stay high but remain relatively stable, people may not worry so much that that'll be their fate this month or next year. And all these unemployed people will fall from the front of their mind, and that's it for them."

Times staff writer Jeff Harrington contributed to this report, which contains information from the New York Times.

Numbers out today

The 9.6 percent national unemployment rate has held relatively steady since May. Nationwide employment data for November is set to be released today.

New reality in the U.S.: forever jobless 12/03/10 [Last modified: Friday, December 3, 2010 2:06am]

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