TOPICS > Economy

Few Glimmers of Hope for Unemployed Americans

August 31, 2009 at 12:00 AM EST
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With the long-term unemployment rate at its highest level since 1948, the nation's jobless are taking little solace in recent data suggesting the recession is winding down. In the latest installment of his Making Sen$e series, Paul Solman explores the sometimes grueling search for work in an battered economy.
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JIM LEHRER: Now the tough road to finding a job in this economy.

Our economics correspondent, Paul Solman, has the story as part of his ongoing series on “Making Sense” of the financial news.

PAUL SOLMAN: The line for a Manhattan job fair in August about to open within the hour.

CHANDRA SMITH, job seeker: This is like a job, actually. Job searching is a job. It just doesn’t pay.

PAUL SOLMAN: Chandra Smith was here with Andrea Bresler.

Are you seeing the economy recover, the green shoots people keep talking about ?

SMITH: No.

WOMAN: No.

SMITH: Not actually.

PAUL SOLMAN: Are you seeing the green shoots?

PHILIP MEREDAY, Unemployed Executive: No, absolutely not.

PAUL SOLMAN: The green shoots, the economy reviving, have you seen it?

JEFF GOLDSTEIN, advertising copywriter: I see unemployment that is so high. The numbers, they’re trying to tell us the economy is better. I personally don’t see it.

PAUL SOLMAN: How long you have been out of work?

JEFF GOLDSTEIN: It’s been about a year now.

PAUL SOLMAN: Small wonder folks like Jeff Goldstein were gloomy.

How long did you think you were going to be out of work?

JEFF GOLDSTEIN: Oh, I thought I would be out of work for a month, tops.

PAUL SOLMAN: How long you have been out of work?

MAN: Two years.

PAUL SOLMAN: Two years?

MAUREEN LOCKWOOD, clerical worker: I’m out over a year now. Mine ends in September.

PAUL SOLMAN: The unemployment, you mean?

MAUREEN LOCKWOOD: Yes. Yes.

PAUL SOLMAN: We come to find out what’s new about the job market for America’s 14.5 million officially unemployed. For many, it’s that their unemployment benefits are running out, even after having been extended several times during the great recession. That’s because of long-term unemployment, five million people now out of work for at least half-a-year, the highest percentage since the government started tracking long-term joblessness in 1948.

Desperate times, desperate measures, including a resume flagged for our camera.

MAN: I hope somebody, you know, out there is watching.

PAUL SOLMAN: I see.

PAUL SOLMAN: Charles Stewart…

MAN: Yes, sir.

PAUL SOLMAN: … from Brooklyn.

MAN: Yes, sir.

PAUL SOLMAN: Telecommunications technician.

MAN: Yes, sir.

PAUL SOLMAN: And how long you been out of work?

MAN: Since — ooh, a year or so.

Some job hunters stop looking

PAUL SOLMAN: And these are the upbeat unemployed you're hearing.

The deeply discouraged declined to talk, didn't have the heart to show up, or have dropped out of the work force entirely, some 800,000 at last count, so many giving up the job hunt last month alone that unemployment was officially reported as going down.

Meanwhile, for those who think survival of the fittest is at play, worst hired first fired, Philip Mereday seemed a case in point of just how random the process is.

You were an executive vice president with them?

PHILIP MEREDAY: Yes.

PAUL SOLMAN: How long you have been out of work?

PHILIP MEREDAY: I have been out of work now for about a year.

PAUL SOLMAN: College grad, military veteran, 14 years younger than I am.

PHILIP MEREDAY: One of the more curious things that happened to me was, I went to a telecom company. And they had an I.Q. test. And I got a 99 out of 100. I got a 99 on the test. And the lady said to me, documentedly, that I was too intelligent for the opportunity. I can document it. So, the individual that was behind me, I think he got a 75. He got the job.

PAUL SOLMAN: And just in Mereday he was counting on affirmative action:

PHILIP MEREDAY: I went to one interview, and the lady actually told me to my face that there were enough colored people on this job, and that the boss was not interested in hiring any more people of color. And I said: "Well, you know, what you are saying is extremely illegal. I could take that to -- to a higher level."

And she said, "Prove it."

PAUL SOLMAN: Upstairs, another line to check out the opportunities, like the one Kathy Leibel was offering.

KATHY LEIBEL, gold miner: We buy gold for cash.

PAUL SOLMAN: So -- so, you...

KATHY LEIBEL: We are considered gold miners. We do home parties, like a Tupperware party. We go to people's homes. We ask they invite their family and friends and have them bring their unwanted gold. We actually buy the gold there on the spot. And hosts make money for having the party. Many of the people who host the parties actually wind up joining the team.

PAUL SOLMAN: The Primerica folks wouldn't talk about their direct marketing of financial services, but the brochure spoke for them.

The top 20 reasons to join Primerica now, extremely slow startup costs.

MAN: We can't -- we can't do that.

PAUL SOLMAN: Sales jobs on commission. Massage opportunities? Well, this school was looking for paying students, not paid employees.

Among the most popular recruiters, the National Guard.

SFC. HECTOR RIVERA, New York Army National Guard: And especially in an economy that we have right now, you know, this is one of the best things that they have going for them at times.

Few promising prospects

PAUL SOLMAN: In fact, there were so few promising prospects for the 1,000 or so attendees that most of them lined up yet again to speak to the State Department's John Smithson, for one obvious reason.

JOHN SMITHSON, U.S. State Department: Department of State, working for the federal government, you have a lot of job security, a lot of job security.

PAUL SOLMAN: That brings us to another truth of the great recession. Government and health care are the only sectors adding jobs.

And as sociologist Sudhir Venkatesh points out, very few of those are likely to be found at a job fair, an institution he likes to call:

SUDHIR VENKATESH, professor of sociology and African-American studies, Columbia University: A touching relic of the old economy. In fact, most of the people who come to job fairs are looking to hire consultants, looking to hire subcontractors that they could employ on a very casual basis, part-time workers, salesmen, people who will work on commission.

PAUL SOLMAN: There was one firm, a electricity supplier, that seemed a pretty good bet.

MAN: We are looking to hire 10 people immediately.

MAN: Within the next two days.

MAN: In the next two days.

MAN: I'm going to hire 10 salespeople. We're going to train them.

MAN: They will be making over 100 grand a year.

MAN: Next week, these people are going to be out selling for us throughout the whole five boroughs.

PAUL SOLMAN: Indeed, this dynamic duo from EnergyPlus had already been approached by the too-intelligent ex-telecom executive Philip Mereday.

MAN: Very personable. He's exactly the type of person that we are looking for.

MAN: More than likely, we will make him an offer tomorrow when he comes in for the -- for the interview.

PAUL SOLMAN: For a job convincing electricity users to switch from New York's utility giant, Con Ed. Terms?

MAN: Salary and commission. And my best salesman has only been with us for three months. He made $5,000 in commission alone last month.

PAUL SOLMAN: The base salary, however, in the 30s. Mereday had scheduled an interview for the next morning, enthusiastically...

PHILIP MEREDAY: And so I'm going to see them tomorrow morning at 11:30. So, I'm looking forward to that.

PAUL SOLMAN: ... even though, for starters, he would be taking more than a two-thirds cut in pay.

But he was far from the only person here ready to do so.

CHANDRA SMITH: I'm willing to take the pay cut. I just want to work.

Willing to take a pay cut

PAUL SOLMAN: To business school professor Peter Cappelli, you can add pay cuts to long unemployment stints as a distinctive feature of this downturn.

PETER CAPPELLI, Wharton School: Maybe for the first time ever, wages are actually going down. This used to be one of the unbreakable truths in economics was that wage rates didn't fall. Maybe they would get eroded by inflation, but there was resistance, stickiness. And there is some evidence now that they actually may be going -- certainly going flat and maybe actually trending down.

PAUL SOLMAN: Moreover, the lower wages are also accompanied by less job security.

PETER CAPPELLI: The model that most U.S. companies seem to be relying on now is a very short-term churning model. Business is up, scramble to hire. Business is down, lay people off.

Companies seem to be hiring people just for the immediate role. And everybody is concerned about, where will this job go to next? And, at the moment, this hire-and-fire approach, the -- the answer is nowhere, that we're hiring you for this job. We have got no idea where this will take you and no expectation that you will do anything else.

PAUL SOLMAN: And that's got to be demoralizing.

PETER CAPPELLI: It's more like looking for temp work than it is like looking for an old-fashioned job.

PAUL SOLMAN: But that's not necessarily a bad thing, says Sudhir Venkatesh.

SUDHIR VENKATESH: You could see a very productive company organized around a much different profile than in the past, which is that of a steady work force, with a strong allegiance to the company and vice versa; the company has a strong allegiance to them, and that continues apace year after year after year. I don't we're going to go back to that model.

PAUL SOLMAN: On the one hand, the new model means flexibility -- for companies and workers.

SUDHIR VENKATESH: So, personal services industry workers, people who are personal chefs or people who are trainers or consultants, life coaches.

PAUL SOLMAN: Or massage therapists, for that matter, trading income and job security for freedom.

On the other hand, as the song goes, freedom is just another word for nothing left to lose. And, these days, it also means losing those other touching relics of the old economy.

SUDHIR VENKATESH: Unemployment insurance, Social Security, a pension, a 401(k). So, there's -- there's good and bad in this economy. And we have to look in different ways to make sure we know what is happening.

PAUL SOLMAN: Meanwhile, of course, the folks at events like this one and their millions of jobless fellow Americans understand what's happening mostly as bad, although not, we're happy to report, Phil Mereday.

After more than a year out of work, but only a day after queuing up on 32nd Street, Phil Mereday got that job at EnergyPlus, where he's having a tough time selling electricity, but is at least employed, for now.

JIM LEHRER: You can find out more about this story online. Tonight, you can watch more of Paul's interview with sociologist Venkatesh about unemployment. And, later this week, Paul gets an update from one of the people he just profiled, Phil Mereday. It's all on his business page at NewsHour.PBS.org.