U.S. Unemployment Rate Is Low. Why Cant People Find Jobs

U.S. Unemployment Rate Is Low. Why Can't People Find Jobs Nathan Bonds’ breaking point came after 19 months of unemployment, 23 interviews, and 200 applications. His résumé had been rejected by a string of minimum wage jobsâ€"including the local L.L. Bean and J. Crew outletsâ€"and Bonds, who lives in Cranston, R.I., was scraping by on temporary construction work. By the time a friend offered him a $10-an-hour delivery gig, he could barely afford rentâ€"much less the fees needed to update his license. So he didn’t get that job either. “That was my lowest point,” the 41-year-old father of five says. “It was like my life was in a vise, and I could not move forward.” Bonds, a former quality manager at a manufacturing plant, is a highly skilled worker in an industry in need of highly skilled workers. His long bout of unemployment, and his struggle to find work even at minimum wage, flies in the face of the stellar jobs reports that have dominated headlines over the past several years. It’s also not that uncommon. As of April 2017, 1.6 million unemployed Americans have been out of work for six months or longer, according to data from the Bureau of Labor Statistics. Nearly a million have been jobless for over a year. “Long-term unemployment,” as it’s called, isn’t a new phenomenon. In 2010, it peaked at 6.8 million and has been trending downward in the wake of the recession. But those numbers offer little comfort to the 22.6% of jobless Americans who fall into that category todayâ€"a ratio that remains stubbornly high compared to pre-crisis levels. Ever since economists started tracking this figure in 1948, the share of long-term unemployed to total unemployed has topped 20% only at the height of a recession or in its direct aftermath. If the official unemployment rate included the millions of people working part-time because they can’t find full-time work, or those who want to work but haven’t looked for a job in at least four weeks, the ranks of long-term unemployed would be even higher. Now experts worry that a large percentage of long-term job seekers have been pushed out of the market completely â€" and that the new presidential administration is ill-equipped to rope them back in. “It’s uncharted territory to have this level of long-term unemployment this far out of recession,” says Ofer Sharone, a sociologist at the University of Massachusetts at Amherst who studies employment trends. “Something new is going on, making it harder for people who have been out of the market for a long time.” *** Nathan Bonds spends time at home with his daughter Lily, wife Tamara, and daughters Ava and Sierra (from left). Rebecca Greenfield for MONEY It’s hard to pinpoint exactly what’s keeping people out of work for so long, but economists have a few theories. Hiring discrimination is one possibility. Often, job seekers with long career gaps face inherent bias from employers, who assume their skills are rusty or that they are otherwise unemployable. On top of that, new technology, like applicant tracking systems that sort through the high volume of résumés each job posting receives, can negatively impact the long-term unemployed. Certain screens, like those that ask applicants for dates of employment, can filter out candidates who have been looking for work for many months. “Bias happens all the time,” says Linda Sharkey, coauthor of The Future-Proof Workplace and an HR expert who has overseen hiring for companies like HP and GE Capital. “If someone doesn’t show employment for a period of time, their application can get kicked out, never to see the light of day.” Another commonly cited culprit is the so-called skills gap, the idea that millions of jobs go unfilled because of the disparity between the skills employers want and those applicants have. Not everyone agrees that such a gap exists, and there’s a range of opinions about how to fix it among those who do. If the gap does exist, though, the long-term jobless are more likely to fall into it, says Princeton economist Alan Krueger. “Skills deteriorate the longer job seekers are out of the workplace,” Krueger says. “That often leads the long-term unemployed to face particular difficulties.” Source: Bureau of Labor Statistics Whatever the reason, mounds of research show that the odds of landing a new job are demonstrably harder for the long-term unemployed than it is for others. One study from the Federal Reserve Bank of Boston says a job seeker’s chances of finding work drop dramatically after six months of unemployment. Another study from the Brookings Institutionâ€"led by Krueger and two other researchersâ€"found that after 15 months, the long-term unemployed are more than twice as likely to have left the market as to have settled into steady, full-time work. Older workers are at a particular disadvantage, says Joseph Carbone, president and CEO of the Bridgeport, Conn., jobs development group The WorkPlace. “If you’re 50 or older, you face an almost impenetrable wall of discrimination,” he says. “Companies have a very narrow view of what they want. When you walk into an interview with a lot of gray hair, it’s usually over very quickly.” For 60-year-old Stephen Wayman of Landing, N.J., who has two degrees in mechanical engineering and more than 20 years of experience, the gap on his résumé is like a scarlet letter. Wayman lost his job as director of facilities and real estate in 2015 and has struggled to find another one. To keep busy, he teaches a class on project management at a local university and takes online courses in computer programming. “I’ve been asked, Why should we hire you when we have other applicants who haven’t been out of work?,” he says. “I tell them I’ve been using this opportunity to learn new things. I have new knowledge of computer science; I’ve gotten into teaching.” These interviews go well, or he thinks they do, but he has yet to get an offer. Stephen Wayman conducts a Skype meeting with his career coach, provided to him for free through the Rutgers University New Start Career Network. Rebecca Greenfield for MONEY “Who knows what people really think, and why they don’t bring you on,” he says. “I suspect younger [hiring managers] don’t give me the benefit of the doubt.” Wayman doesn’t have young children to provide for, but he’s living off his pension and savings accountâ€"something he didn’t plan on doing at age 60. But more than the lack of a salary, Wayman misses having an opportunity to grow. “I feel like I have a lot of gas left in the tank,” he says. *** Nathan Bonds (right) talks with Christian Cowan, the center director for Polaris MEP. Rebecca Greenfield for MONEY Nathan Bonds’ story has a happy ending. In March, he landed a role as a project manager for the manufacturing consultancy Polaris MEP, with help from Platform to Employment (P2E)â€"a program from Carbone’s The WorkPlace, which uses government and private funding for job training and wage-subsidy efforts. Other workforce agencies, like the Rhode Island Department of Labor and Trainingâ€"whose Real Jobs RI program gives companies grants to hire and train job seekersâ€"rely heavily on a mix of state and federal funds. Bonds’ new employer benefits from such funding. If President Trump’s federal budget passes as proposed, states will be forced to do more with less. Workforce agencies, job centers, and ultimately the long-term unemployed could suffer. Under the administration’s most recent 2018 budget proposal, the Department of Labor would lose $2.4 billion, or 19.8% of its operating budget. The budget specifically calls for less federal support for job training and employment service formula grants, a move that puts the core programs at more than 2,500 American Job Centers at risk. Those centers provide a range of free services for all job seekers, like career counseling, résumé building, and job-search assistance. Some centers also provide specific outreach and coaching for the long-term unemployed and space for long-term-unemployment development groups to meet. A number of additional grants that fall under the Workforce Innovation and Opportunity Act (WIOA), which was signed by President Obama in 2014 and funds state programs for dislocated workers, would also be reduced. The proposal also decimates federal funding for the Department of Commerce’s Manufacturing Extension Partnership (MEP), a private-public partnership that helps small and midsize manufacturers like Bonds’ new employer compete.   Source: Bureau of Labor Statistics, 2015 In addition to the cuts, the budget blueprint does expand some programs designed to assist the unemployed, like the Reemployment and Eligibility Assessment program, which helps people receiving unemployment benefits reenter the workforce. The president’s proposal isn’t set in stone. But it does shine a light on what long-term unemployment could look like in the Trump eraâ€"and it’s very different from what was promised on the campaign trail. In a July 2016 tweet, then-candidate Trump acknowledged that long-term unemployment is indeed a problem (“We are suffering through the worst long-term unemployment in the last 70 years. I want changeâ€"Crooked Hillary Clinton does not”). But experts say his actions prove otherwise. “The message that comes across is we don’t care,” Carbone says. “A lot of the folks who need assistance to help overcome barriers to opportunity are just not going to get it.” *** Unemployed lawyer Karen Johnson vacuums her family room while her husband and children are at work and school. Susana Raab for MONEY The mundane, day-to-day scripts that dictate a modern job huntâ€"online applications, follow-up emails, résumé updatesâ€"can be particularly draining for the long-term unemployed. For many, the mystery of why they’re rejected is a confusing constant. Karen Johnson, 47, is running on fumes. In 2015, Johnson’s executive legal position was cut from the technology company she had worked at for 10 years. At first the Washington, D.C., resident wasn’t worried. “I thought it was going to be easy,” she says. “I hadn’t looked for a job in 20 years. I didn’t get it at all.” Karen Johnson and her son Robert Mitchell wave goodbye to her husband, George Mitchell, before taking her son and daughter to school in northwest Washington, D.C. Susana Raab for MONEY Since then, Johnson has applied to a range of positions, but nothing has materialized. Her family’s resources are thinningâ€"her iPhone is duct-taped together (“I’m afraid to spend money on it,” she says), and her daughter, a senior in high school, is taking a gap year before college until the family gets back on its feet. Johnson is an optimist, but she’s starting to burn out. It’s frustrating to spend two decades climbing the career ladderâ€"working nights, weekends, and through every vacationâ€"with little to show for it. As a black woman, Johnson is worried she faces an extra layer of discrimination in a job market that’s already stacked against her. For now, Johnson is updating her résumé with a skill set worthy of today’s landscape. She’s learning to code and is practicing soldering, welding, and laser cutting at a local do-it-yourself community “makerspace.” She’s the proud owner of a new 3D printer. But she feels uncertain about the future. Johnson watches how our new President talks about jobs and how blue-collar workers are driving the conversation. So far there’s been no message from the top about the highly skilled, highly educated workers who are also struggling to make ends meet. That troubles her. “Where do I go?” she says. “I’m not going to be a coal miner.” Despite having advanced degrees and years of professional experience, Karen Johnson (right) has been unable to find a job in the traditional market for over a year. Here she meets with her friend Karen Jennings Crooms at Soapstone Market on Connecticut Avenue in Washington, D.C., to talk about options. Susana Raab for MONEY   Update: This story has been slightly changed from the original to reflect current projections from President Trump’s 2018 budget proposal.