Despite Encouraging News, the Long-Term Unemployed Remain at a Big Disadvantage

They are out on their own doing the same thing as the short-term unemployed, whether or not they realize it, with a clear disadvantage where they need to spend three to four times the effort to get a comparable result.
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To understandably little fanfare, the office of the Vice President delivered recommendations on July 22 in a report titled "Ready to Work: Job-Driven Training and American Opportunity." This was in response to a directive by President Obama to put Americans back to work, especially the long-term unemployed (defined as those who have been out of work for 27 weeks or more). Earlier this year, the White House sounded an alarm concerning the escalating "negative cycle of long-term unemployment" calling it a "crisis ... perhaps the worst legacy of the financial crisis and ensuing recession." There is a lot of encouraging news in the Vice President's report:

  • The total number of the long-term unemployed has already gone down by half a million since the White House Summit on the Long Term Unemployed in January 2014.

  • There is bipartisan support to continue funding these programs. The report states that $17 billion dollars per year will continue to fund programs with better targeting towards state agencies, local non-profits, and partnerships with private industry.
  • We have some data showing that those who had been long-term unemployed had similar outcomes to recently unemployed individuals on measures of performance like productivity, customer satisfaction, and supervisor evaluations.
  • The report highlights many examples of success stories at the state and local levels as a result of on the job training (OJT) programs, apprenticeships, and partnerships between private businesses, sometimes in specialized industries, non-profits, state agencies, and/or local colleges. NH Works, for example, is an OJT program offered by the Office of Workforce Opportunity through its contracted workforce provider Southern New Hampshire Services, Inc. (SNHS), whereby it "allow(s) an employer to hire an individual who would not otherwise qualify for the job and to teach the skills needed to perform at the entry level for the position. The activity is based upon a contract between the employer and SNHS, which provides the employer with a partial wage reimbursement for an agreed-upon training time period in exchange for the provision of training by the employer and a commitment to retain the individual when the training is successfully completed."
  • Based on success stories, efforts have been put in place to create a playbook that "will provide tactical tools to help employers operationalize the Best Practices and tap into the full potential of the long-term unemployed population."
  • It is good news that this has become a focus for the administration and substantial effort is being invested to address this crisis. However, the report still misses the mark on how to engage the job seekers. With the exception of one mention about a potential playbook coming down the road for them, the report has no mention of how these programs are communicated to the job seekers. If I was one of those unfortunate folks looking to rejuvenate my career and get back to work after a long absence, how do I take advantage of these programs?

    Furthermore, while the outcome is the focus -- getting these people back to work, there is no mention of how to measure the effectiveness of how well they are engaging the job seekers. Every mention of engagement is around businesses and agencies (government or private), and not once is there a mention about how the job seekers are themselves engaged. Depending on the state, unemployment benefits run out between six and 12 months, and afterwards there is no communication whatsoever with the job seeker. What are these organizations doing to engage job seekers? What can the long-term unemployed job seeker do to maximize his/her chances of getting back to work? This is where the report misses the mark. While there is a lot of good news, this is still a crisis. According to the Bureau of Labor Statistics (BLS), the long-term unemployment rate remains well above its 2001 to 2007 average, and it still makes up a third of the overall unemployed.

    Secondly, according to a brief by Rand Ghayad and William Dickens titled What Can We Learn by Disaggregating the Unemployment-Vacancy Relationship?, the increase in job openings disproportionately benefits the short-term unemployed. In fact, when the researchers sent identical résumés, they found that a long-term unemployed person needs to apply to 3.5 times as many jobs -- 35 vs. 10 applications -- as a recently unemployed counterpart to receive one interview. To ensure that these programs are producing the intended outcomes, the beneficiaries must be engaged and there needs to be some accountability. The best way to address these issues is to track awareness and engagement of long-term job seekers when it comes to these programs. It is also important that they understand that this is a two-way street. While these agencies work with the state unemployment departments, there needs to be clear best practices for the job seekers on how to engage with both of these entities.

    Unfortunately right now those who are currently unemployed, especially if their unemployment compensation period ran out, are not engaged. PERIOD. They are out on their own doing the same thing as the short-term unemployed, whether or not they realize it, with a clear disadvantage where they need to spend three to four times the effort to get a comparable result.

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