According to the U.S. Labor Department 38 percent of all unemployment in the U.S. comes form long-term unemployment. This is triple its average from the years 2001 to 2007. According to the article an applicant looking for a job, who has been out of a job for the "long-term" is less likely to be considered for a position, than an applicant who has only had "short-term" unemployment. Evidence of this is seen when examining that the short term unemployment rate only being .7 percent higher than average.
http://www.businessweek.com/articles/2013-02-07/the-u-dot-s-dot-long-term-unemployment-crisis-stumps-economists#r=nav-f-story
Could this cause of long term unemployment be caused by such people constantly dropping in and out of the labor force as discouraged workers?
ReplyDeleteI think until the economy recovers, we would barely see any major improvement in the labor market. Workers trying to find job will just get discouraged again and again, because not many rooms are open when the economy is still in recession.
ReplyDeleteThis article does not surprise me whatsoever. In my opinion, it makes complete sense to hire somebody who has been unemployed for 6 months or less, as opposed to someone who hasn't had a job for a year or so. From a business perspective, the worker who has been unemployed for a smaller amount of time is more appealing. The longer the person is unemployed, the more questions arise. For example, maybe they are unemployed due to a lack of motivation. Businesses can be more accepting of somebody who has been unemployed for 6 months or less because they may assume the were recently laid off and one of the first employers to seek their help.
ReplyDeleteThe labor market is directly impacted by the strength of our economy. In this case I have to agree with Duc Vu when he states that we wont see any major improvement in the labor market until the economy recovers. Although we have seen a reduction in the UR this could be due to many other factors such as people dropping out of the labor force.
ReplyDeleteFirms and businesses are more likely to hire someone who has been unemployed for a shorter period of time. With technological advances in the work place, a "long-term" unemployed member would be less knowledgeable with these advancements than some one who has been "short-term" unemployed.
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