Monday, April 23, 2012

The long term unemployed: forgotten?

James Surowiecki, The New Yorker's economics writer has a hard-to-read column on the long-term unemployed:
Though the job market has shown some signs of life in recent months, the latest figures on new jobs and on unemployment-insurance claims have been decidedly unimpressive. We are stuck with an unemployment rate three points higher than the postwar average, and the percentage of working adult Americans is as low as it’s been in almost thirty years. What’s most troubling is that so much of this unemployment is long-term. Forty per cent of the unemployed have been without a job for six months or more—a much higher rate than in any recession since the Second World War—and the average length of unemployment is about forty weeks, a number that has changed very little since 2010. The economic recovery has now lasted nearly three years, but for millions of Americans it hasn’t yet begun. (emphasis CJ's)
Why is it bad that people are unemployed for a long time?
The longer people are unemployed, the harder it is for them to find a job (even after you control for skills, education, and so on). Being out of a job can erode people’s confidence and their sense of possibility; and employers, often unfairly, tend to take long-term unemployment as a signal that something is wrong. A more insidious factor is that long-term unemployment can start to erode job skills, making people less employable. One extraordinary study of Swedish workers, for instance, found that there was a strong correlation between time out of work and declining skills: workers who had been out of work for a year saw their relative ability to do something as simple as process and use printed information drop by five percentile points.
My speculation: I suspect there is an unusually high number of older chemists in the long-term unemployed numbers; I suspect many of them have been forced into early retirement by layoffs, plant closures and their difficulty in finding a new position. Certainly, the bump in unemployment in cohorts older than 40 in the ACS member unemployment rate is evidence of (or does not refute) this problem. 

One hopes that someone attempts to collect and/or use all of their knowledge to some greater purpose. (Wild speculation: A faster fiscal response would have been for the governmental research/regulatory complex to have absorbed a majority of these workers, as opposed to just some of them. Also, I wonder if foreign governments and/or internationally-based companies have been fishing for long-term unemployed scientists in the United States particularly aggressively.) 

One last thing: look at that average length of unemployment. 40 weeks. 40 weeks! That's 10 months, or 77% of a year. Financial gurus who tell you that a family's emergency fund should be smaller than 6 months are actively doing their patrons a disservice. In my opinion, a proper emergency fund should be much closer to 12 months' expenses. 


  1. CJ: This is very depressing. I was really lucky that I was able to land on my feet, after being laid off from the leading pharmaceutical company. I wonder how many chemists are out there who are 50+ years and with out a job. As a solid bench chemist, I was deeply worried about losing my skill sets after the lay off. I reasoned then that simply keeping with literature would not suffice. My impression is that some friends of mine are still on the job market after 1 year post layoff.

  2. I would say that your emergency fund should at least be 12-18 months. If you can afford this.

  3. A recent post here in the Layoff Project series told of a chemist who had spent two years (!!) unemployed, during which time had made no fewer than 400 job applications. I suspect that most chemists are currently unemployed for much longer than the 40 weeks average.

  4. As the tax base suffers the state and local governments lose the ability to hire people. A large portion of job losses in the past year or two came from the governmental sector.

    We are experimenting with a society where work of a growing fraction of population is not needed. It is hard to see what factors would reverse this trend.

  5. It effects all aspects of the economy. If people do not have stable jobs, they do not buy houses, new cars, etc. This in turn effects those industries, and employees in those industries as well. Your not going to buy new houses flipping burgers.

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  6. I know chemists and Biologists had hard time to find job after layoff. It seems if one cannot land a job within 6 months, the chances are significantly dropped. Being a scientist and went through this and have many coworkers still at home almost two years, I felt for them everyday. Please do something to help them. At least, extend their unemployment benefits.


looks like Blogger doesn't work with anonymous comments from Chrome browsers at the moment - works in Microsoft Edge, or from Chrome with a Blogger account - sorry! CJ 3/21/20