TOPICS > Economy > Making Sen$e

March jobs report offers bright spot, but long-term unemployment continues stubborn streak

April 4, 2014 at 6:07 PM EDT
The Labor Department’s reported boost of 192,000 jobs in March marks a milestone in the economic recovery: all of the private sector jobs lost in the recession have been regained. Economics correspondent Paul Solman offers a closer analysis of the numbers and Hari Sreenivasan takes an in-depth look at the problem of long-term unemployment with Ofer Sharone of the MIT Sloan School of Management.
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JUDY WOODRUFF: The latest jobs report is our lead focus tonight. It was once again widely awaited for what it tells us about the strengths and weaknesses of the labor market.

Our economics correspondent, Paul Solman, spent much of the day unpacking the data. He kicks off our coverage, part of his ongoing reporting on Making Sense of financial news.

PAUL SOLMAN: Today’s jobs headlines featured employment growth chugging along in March, employers posting solid job gains for the second straight month.

Kristin Butcher chairs the economics department at Wellesley and came by the home office near Boston to explain.

KRISTIN BUTCHER, Wellesley College: We have some real bright spots in this employment report. We have 192,000 new jobs counted in the establishment survey, and in addition to that, there are revisions upwards from the previous couple months of the year.

PAUL SOLMAN: And the establishment survey is when they ask employers how many jobs you…

KRISTIN BUTCHER: Yes, so how many checks are going out the door. And so we have about 192,000 new jobs. Within that, there’s some nice things as well, which is that temporary business services seem to be up, and that tends to be a bellwether, because temporary services mean that they’re hiring temporary workers in advance, we think, of hiring full-time workers.

Construction numbers are also up, and those tend to foretell changes. Construction tends to be quite sensitive to downturn in the economy and also sensitive to upturn.

PAUL SOLMAN: The report included a milestone, according to the Bureau of Labor Statistics. More than six years after the start of the great recession, the economy has regained all the private sector jobs that were lost.

BLS commissioner Erica Groshen.

ERICA GROSHEN, Commissioner, Bureau of Labor Statistics: The private sector lost 8.8 million jobs during the job market downturn, and it’s now gained 8.9 million jobs since the employment low in February 2010.

PAUL SOLMAN: But, behind the headlines, the population has continued to grow, and thus the unemployment rate remains high and unchanged from last month.

KRISTIN BUTCHER: We have many people who are still looking for work who have not been able to find it. I’m worried that the employment-to-population ratio, which is a measure of how many people have jobs just relative to the population, has remained pretty much the same since last year.

PAUL SOLMAN: If we’re adding a couple hundred thousand people, almost, to the total population every month, and we’re only adding roughly that many jobs to the economy, then we wouldn’t be affecting the unemployment rate at all.

KRISTIN BUTCHER: I think we’re going to need to see many months of job growth like the one we saw before the unemployment rate starts to come down substantially, and before that, employment-to-population ratio begins to come up.

PAUL SOLMAN: Another cause for concern, U-7, our own more inclusive measure of un- and under-employment, went up to 14.75 percent in March, nearly 24 million Americans, driven by a big jump in the number of part-timers looking for full-time work.

As to all the talk about the brutal winter’s economic impact:

KRISTIN BUTCHER: The weather affects things, but we shouldn’t be focusing on what happens month to month in the short-term anyway, and those things are going to get smoothed out.

PAUL SOLMAN: But we should be focusing, says Professor Butcher, on the nearly four million Americans who’ve remained jobless for 27 weeks or more.

KRISTIN BUTCHER: We have about a million fewer long-term unemployed this year than we did at this time last year, so the numbers of people who are long-term unemployed have come down, but the rate is about the same and the average number of weeks unemployed is still quite high.

PAUL SOLMAN: In Washington, the Senate is expected to pass an extension of benefits for the long-term unemployed next week. However, the measure faces an uphill battle in the House.

JUDY WOODRUFF: And, in fact, let’s zero in now on the problems many long-term unemployed Americans are facing in the labor market and what can be done to help them.

Hari Sreenivasan has our conversation.

HARI SREENIVASAN: Ofer Sharone is a sociologist at the MIT Sloan School of Management who’s trying to help tackle these issues. He co-founded the Institute for Career Transitions last fall. It’s focused in part on assisting people between 40 and 65 years old with college degrees.

So, you have studied this a little bit. What are some of the problems that are unique to the long-term unemployed?

OFER SHARONE, MIT Sloan School of Management: Good evening, Hari.

Yes, two things really jump out. One is people talk about experiencing a black hole. They are applying online, putting in tremendous effort to find a job, and they’re getting no responses. This, I think, is partly a result of discrimination against people who are long-term unemployed, by virtue of the duration of their unemployment.

And I can say more about that, but there’s another experience that’s really important, which is just a toll on one’s sense of self, the emotional experience of looking for work for month after month and not finding it. Many people tend to start to doubt themselves, to have the experience of self-blame, despite the fact that we’re still in unprecedented territory since the Great Depression for long-term unemployment.

It’s easy to lose sight of that and to feel that it’s something you’re doing. And this is a particularly American white-collar phenomenon. That’s what my recent book focused on, looking at how, when you’re trying to avoid the black hole, and instead networking, this becomes a highly personalized process, with a lot of focus on building rapport, chemistry.

And when you have negative labor market outcomes, you take the result personally as well.

HARI SREENIVASAN: So, do these feelings of self-blame get worse the longer you’re unemployed?

OFER SHARONE: Absolutely.

So each time a person tries to network, tries — has an interview and then is unsuccessful, the sense of maybe there’s something about me intensifies. I think of it as putting more salt on an open wound. It becomes harder and harder to continue with the search and, in some cases, people do stop searching.

I think this is a piece of the puzzle of why we have this decline in labor force participation, which is also at historic low rates.

HARI SREENIVASAN: Let’s look at the demand side for a second. Does the marketplace discriminate against the long-term unemployed? You and your peers have done a little bit of research on this.

But say, for example, if you have two equal candidates, well, let’s one candidate who has a job who might not have as much relative experience and one candidate who hasn’t had a job in a long time, but would really fit to what the employer is looking for, is there discrimination in the marketplace?

OFER SHARONE: Yes, I think actually we have pretty good data showing that there is exactly that kind of discrimination. This is the work of my colleague.

Rand Ghayad did a resume audit study, and virtually identical resumes except for the duration of unemployment and match of skill. It turns out that people with a better match in terms of skill that the company is looking for get lower rates of call back to interviews, much lower, than people without relevant skills, but with short duration of unemployment.

So this is, in some ways, a very shocking finding, and I hope employers listening to this pay attention because they’re passing up and missing a lot of great talent that is being overlooked by these kind of practices.

HARI SREENIVASAN: All right, so let’s talk a little bit about what is working. You have also done some experiments there. What encourages this long-term unemployed population?

OFER SHARONE: Right.

So we have been very fortunate in the Boston area to find a group of dedicated career counselors and coaches that have stepped up and said we will provide support for free, and let’s see what kind of support makes a difference.

And we’re very early in analyzing the findings, but I can say that support does make a difference, that our — the people in our group are finding jobs at a higher rate than a control group. And I think what is really interesting is what they’re reporting helps.

And so at one level, the support is technical, the way a company that’s experiencing difficulties selling a product play may bring in a consultant who has an external perspective and expertise and help understand what are my strengths, where is the market demands for these strengths, how can I best present myself to the employer, all these things really do make a difference.

But there’s a second level of it as well, which is the emotional part that I think is equally important. Here, the support helps people develop a counternarrative to the experience of being rejected over and over, reminding them of their strengths, what has led to their success in the past.

HARI SREENIVASAN: And they’re useful to other people.

OFER SHARONE: Particularly — absolutely.

HARI SREENIVASAN: All right.

OFER SHARONE: This is the — the group context is particularly important here, where people see also that they’re not alone in being long-term unemployed, that this is not something necessarily about themselves.

HARI SREENIVASAN: Yes.

OFER SHARONE: Other very competent people are in the same boat.

HARI SREENIVASAN: All right, Ofer Sharone from the Institute for Career Transitions, thanks so much.

OFER SHARONE: Thanks.