It’s the Demographics, Stupid

Well, yes and no. There’s a generational changing of the guard taking place in the U.S. (and in other countries) right now. The population is aging and Baby Boomers are retiring out of the work force. Generation Xers are taking their places in management positions and boardrooms.

The Millennials have arrived and are making their way up corporate ladders and in entrepreneurial ventures. Arguably, this trend would have happened organically to some extent even if the economy had stayed healthy for the past seven years. But the Great Recession put more people out of work – older and younger workers were hit the hardest – for longer periods (at least 27 weeks) than during any recession in recent memory. Other downturns of the last three or four decades also ended sooner and rebounded faster than this past one.

So even though the official unemployment is down from more than 11% in 2009 to 5.6% and still ticking down, it doesn’t tell the whole story. The statistics don’t take into account most workers who have given up hope and dropped out of the job market for one reason or another.

In many cases, these people took early retirement, went out on disability, became “consultants” or freelancers; and essentially dropped off the radar screen, never to be heard from again.

How to Get Back in the Game

Long-term unemployment doesn’t have to mean a permanent state of joblessness, according to a recent article from fastcompany.com. But the longer someone’s out of work, the longer and harder the climb back up to full employment.

People out of the full-time job force for six months or more have a 20% to 40% lower probability of being rehired within one to two years – a daunting statistic indeed and a potentially damaging interruption to any career path.  

There are practical, mainly resume-related solutions to long-term unemployment. Many recruiters and employment specialists suggest:

• Be up-front about your situation, especially if you were downsized and not dismissed for poor performance.

• Try running your own consulting practice or something else entrepreneurial while you’re job-hunting.

• Ditch the traditional chronological resume in favor of a profile or a hybrid of both that highlights your accomplishments instead of your bulleted tasks or titles; focus on telling your story.

• Keep your skills current and consider getting a certification in a field of endeavor that interests you.

• Customize your resume or profile for a specific job you’re pitching.

• Network as much as you can and circulate your paperwork to all your contacts to spread the word that you’re in the job market.

Good suggestions, all – especially for mid-career employees who have marketable skills. But is that enough to treat chronic, systemic unemployment? Not really. What’s needed are more creative, innovative approaches to what might someday be called “the war on long-term unemployment,” because this situation is not going away anytime soon.

Are There Any New Ideas Under the Sun?

Fortunately, there are. A National Journal article describes a very innovative, out-of-the-box approach to long-term joblessness that may slowly be catching on. It started with private funding in Connecticut and then spread to some other municipalities. Nevada, a state that was hit especially hard by the recession as casinos and the gaming industry tanked, was the first to apply federal funds to the program, called Platform to Employment (P2E).

Even as state budgets were slashed during the downturn and unemployment benefits were counter-intuitively reduced across the country, the initiative has been adopted in Colorado and Indiana, and Connecticut is now using state funds to help bolster it.

It’s a relatively simple, if somewhat costly, approach: a select group of long-term unemployed individuals are provided with intensive job-readiness training. After that, P2E offers to cover up to two months of their salaries to companies that are willing to take a chance on them. The program costs about $6,000 per “trainee” to administer, but the results are promising: about 80% of participants get placed in a job, and 90% of those remain employed after their trial period ends.

More Costly Than We Think

Long-term unemployment certainly damages a candidate’s self-confidence and can lead to chronic feelings of depression and hopelessness. People out of work for six months or more are more likely to drop out of the job market permanently – especially if they apply for and receive disability benefits.

But studies cited in the piece indicate more systemic effects on the nation’s economy and on society: the housing market suffers; crime rates tend to rise, as do rates of divorce, foreclosure, and deteriorating mental health. Not surprisingly (and helpfully), P2E requires all participants to have at least one session with a psychotherapist.

On a somewhat more disturbing level, studies of the long-term unemployed in Germany suggest that chronic joblessness may even lead to changes in personality traits, such as agreeableness, conscientiousness and openness, over time, according to a recent New York Magazine article. The trends and differences between the chronically unemployed and people who have never been unemployed are tracked, and quite striking.

The jury’s still out on understanding the total impact of long-term unemployment. Ironically, as the economy improves and the unemployment rate falls, programs like P2E have a tougher time getting funded. It seems more and more likely that, not unlike technological advances, chronic joblessness will present challenges and necessitate more innovative solutions as time goes on. The future of the work force, and important elements of our culture, may be at stake.