The Invisible Hand of The Market

methodically snuffs out the long-term unemployed.

File under: Economic Cleansing.

Dr. Krugman explains why the recovery is not a recovery:

The Jobless Trap
Back in 2007 there were about seven million unemployed Americans — but only a small fraction of this total, around 1.2 million, had been out of work more than six months.

Then financial crisis struck, leading to a terrifying economic plunge followed by a weak recovery. Five years after the crisis, unemployment remains elevated, with almost 12 million Americans out of work. But what’s really striking is the huge number of long-term unemployed, with 4.6 million unemployed more than six months and more than three million who have been jobless for a year or more. Oh, and these numbers don’t count those who have given up looking for work because there are no jobs to be found.

It goes without saying that the explosion of long-term unemployment is a tragedy for the unemployed themselves. But it may also be a broader economic disaster.

The key question is whether workers who have been unemployed for a long time eventually come to be seen as unemployable, tainted goods that nobody will buy. This could happen because their work skills atrophy, but a more likely reason is that potential employers assume that something must be wrong with people who can’t find a job, even if the real reason is simply the terrible economy. And there is, unfortunately, growing evidence that the tainting of the long-term unemployed is happening as we speak.
He then goes on to reference this study.  From "The Atlantic":
The Terrifying Reality of Long-Term Unemployment
It's an awful catch-22: employers won't hire you if you've been out of work for more than six months

It turns out long-term unemployment is much scarier than you could possibly imagine. 

The results are equal parts unsurprising and terrifying. Employers prefer applicants who haven't been out of work for very long, applicants who have industry experience, and applicants who haven't moved between jobs that much.But how long you've been out of work trumps those other factors. As you can see in the chart below from Ghayad's paper, people with relevant experience (red) who had been out of work for six months or longer got called back less than people without relevant experience (blue) who'd been out of work shorter. 


Look at that again. As long as you've been out of work for less than six months, you can get called back even if you don't have experience. But after you've been out of work for six months, it doesn't matter what experience you have. Quite literally. There's only a 2.12 percentage point difference in callback rates for the long-term unemployed with or without industry experience. That's compared to a 7.13 and 8.95 percentage point difference for the short-and-medium-term unemployed. This is what screening out the long-term unemployed looks like. In other words, the first thing employers look at is how long you've been out of work, and that's the only thing they look at if it's been six months or longer.

This penalty for long-term unemployment is unlike any other...

This is what the the free market looks like when it is left to run like an atomic pile with the control rods yanked out: the reactions of millions of people each acting in their own short-term self-interest collectively creating disaster.  Now add in the additional joy of trying to navigate this wasteland while being over 45 and this could also be the introduction to Part III of the autobiography I will never write.

Over the course of my working life, I can fairly say I did almost everything one is supposed to do:  I worked hard, learned continuously, managed others well, kept my projects on time and on-or-under budget, saved money, kept luxuries to a minimum,  only bought a home when A) I believed I could afford the mortgage and, B) bought one where I though I would live for the next 30 years, etc.

Over the course of my working life, I have had three separate careers wrecked and have been forced back to square-one by the criminal incompetence, nepotism or loot-and-scoot banditry of other people,

all of whom came out of the disasters they created with their careers in fine shape and with vastly more in the bank than when they started. (For the record, while I have repeatedly tried my hand at writing, before 2004 I never had any intention of writing about media or politics, and I I have have no doubt my working-life experience colors my published opinions of the privileged, insulated, inbred imbeciles who rule our Beltway media.)

If nothing else, those experiences have hammered and honed the airy, the-world-as-it-should-be philosophies of my younger self down to a sharp-edged set of practical tools.

In the last five years I've lost 80% of my peak earning power, my savings, my benefits and my condo.

I don't ever expect to have a full-time job with benefits again.

This is not a request for sympathy:  it is impossible for me to look at my family and friends and think of myself as anything but one of the lucky ones.  This is simply a front-line report on an invisible battle that is being silently fought and lost by millions of your fellow citizens every single day,