US: older workers in long-term unemployment

By Barbara Rose

One measure of economic pain is the number of people out of work six months or more, long enough to exhaust their unemployment benefits. The Labor Department classifies them as long-term unemployed, and their numbers stayed stubbornly high even during the recent good times.

It used to be that when unemployment was 5 percent or less, as it was for 28 consecutive months through January, about one in every 10 unemployed fell into this category, says labor economist Jared Bernstein.

But during this stretch of low unemployment since October 2005, an average 18 percent of the unemployed, more than one in six job seekers, were members of the long-term fraternity.

“There are a lot more people stuck in unemployment than you’d expect given the low rate,” Bernstein said.

This is not good news for an economy on the slippery side of a downward slope. Unemployment is rising. It increased last year in 36 states, including Illinois, where it was 5.5 percent in December, the latest month for which numbers are available.

Nearly 1.4 million U.S. workers qualified as long-term jobless in January. To put this in perspective, that’s more than twice as many as when the recession started in March 2001. And it’s more than the 1.3 million who were long-term jobless the last time Congress temporarily extended benefits, in March 2002.

An estimated 3 million workers will exhaust their standard 26 weeks of unemployment benefits during 2008, including more than 141,000 in Illinois, according to an analysis by New York-based National Employment Law Project, a worker-advocacy group that is lobbying Congress for a benefits extension.

Why are more people out of work for longer periods? For one thing, job growth was weak during the recovery from the 2001 recession.

“There’s a kind of just-in-time hiring going on,” Bernstein said. “There’s a core group of workers that employers hire around. If demand picks up, they will squeeze more productivity out of those workers before they’ll add” someone new.

For another, the workforce is older. Age discrimination aside, older workers take longer to find jobs after a layoff than younger ones.

“You have more experienced and better-paid workers who are losing their jobs,” said Andrew Stettner, interim director of the National Employment Law Project. “They have built up experience and an expectation in a particular field. Those are the workers having the toughest time.”

Older workers, especially older men, are disproportionately represented among the long-term jobless. Workers aged 45 or older make up 27 percent of the workforce, for instance, but they comprise 37 percent of the long-term unemployed, according to the group’s analysis of Labor Department data.

Jim Peterson understands this firsthand. The 54-year-old software engineer hunted work for 11 months before landing the job he will start Monday at a small tech firm in the northern suburbs.

National unemployment was 4.4 percent when he got laid off in March from Motorola Inc., where he had worked for 25 years. He was one of 600 people working on a cellular telephone switching system when the project was canceled.

A good severance package insulated him from financial hardship but not from worry about how he would replace a good job. He attended a job-support group at Holy Family Catholic Community in Inverness. He went back to school to update his technical skills. He networked and cold-called and posted his resume on job boards. Yet there was a nine-month stretch when he went without a single serious job interview.

“One of the mistakes I made at Motorola is to assume if I worked hard at Motorola, I would always be able to a find job” there or elsewhere, he said. “It was a rude awakening.”

As the months wore on he dusted off his higher math skills — he has a master’s degree in mathematics — and tutored college students. When he took morning walks, he envied drivers stuck in rush-hour traffic, because they were on their way to work.

He considered moving and broadened his search north to Wisconsin and west to Rockford. Suddenly, in January, he landed five interviews and three job offers. What finally made the difference?

A bit of luck and new-year hiring, for sure. But Peterson also says it helped that he went online every day to freshen his resumes so that search engines pushed them to the top.

Another factor: “Applying to jobs where my qualifications were not a perfect match,” he says. “A lot of job hunters limit themselves by assuming their next job has to be like their last one.”

His biggest lesson? “What I learned over the last year is that I can get through this and be successful, which is maybe more important even than the job.” (Chicago Tribune)