For unemployed, statistics tell only part of story
Philadelphia telecom worker Darnel Tanksley can make a dead phone line come to life. James Lee, a resident of Munster, Ind., has a knack for running construction projects. And Jane McGuire of San Luis Obispo, Calif., is a master of cajoling software programmers to meet their deadlines.Skip to next paragraph
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But all three have put their prize skills aside: They're out of work - and have been searching for jobs for more than six months. That irksome predicament puts these three into one of America's fastest growing groups: the long-term unemployed. They are people so discouraged by the job search that they've just quit looking.
While every downturn has its downtrodden, this one is worse than most. The percentage of people not in the workforce has grown nearly every month since early 2001.
"This is not only painful for the individuals and their families; it's unhealthy for the country," says Bill Brock, a former senator and labor secretary. "People in this country like to work, to be productive."
Employment opportunities are an important part of consumer confidence - which Tuesday received an unexpected boost, due in large part to the quick end to war in Iraq. "It's a chicken-and-egg kind of thing: Jobs and confidence go hand in hand," says Stuart Hoffman, chief economist for PNC Securities.
For now, though, executives - unsure of demand - aren't hiring. Desperate people apply for jobs beneath their qualifications, resulting in a loss of productivity - and a panoply of wasted skills. Consumers, wary of their own job prospects, are holding off buying that new car.
As the so-called jobless recovery stumbles along, the number of long-term unemployed - now about 1.8 million - is up 36 percent from a year ago. The tally of discouraged workers - almost 500,000 - is up 44 percent.
The long-term unemployed and disheartened aren't just waiting a few weeks for their factories to call them back. It's more likely that their factories are permanently closed.
Many are white-collar workers with college degrees and sometimes advanced degrees, too. They may have been in the upper echelons of management. Some are still suffering from the collapse of the dotcom and telecommunications industries - but because of their expertise, they're reluctant to look for work in completely different fields.
In a woeful cycle, long-term unemployment begets long-term unemployment: With plenty of applicants to choose from, employers are less likely to hire someone who's been out of work for some time. "The longer the jobless recovery continues, the more people get caught up in a long-term job search," says John Challenger of Challenger, Gray & Christmas, an outplacement firm in Chicago.
In the wake of the 1990-91 recession, long-term unemployment likewise shot up. From peak to trough, that measure rose for about 18 months, says Randy Ilg, an economist at the Bureau of Labor Statistics in Washington. "And it continued to stay high for four or five months after that."
The job market did not truly start to grow until late 1993 or early 1994. And the four-year boom did not start until 1996. This Friday, the government releases the April employment report. "No one thinks there will be much of a gain in jobs," says Mr. Hoffman. "The economy really has to grow more than 3 or 4 percent to see a lot of job growth."