Imagine you lost your job when the economy was in free fall, and six months later it was still in free fall. You sent out resumés every day, and every day you heard nothing back from com­pa­nies too scared to hire. Then things finally started to look better. Com­pa­nies finally started to think about hiring again. But you still heard nothing. See, you’d been out of work for so long that employers wouldn’t even look at your resumé. That’s what Rand Ghayad, a PhD can­di­date at North­eastern Uni­ver­sity, found when he sent out fic­ti­tious job appli­ca­tions. Com­pa­nies would ignore all-​​but-​​identical resumés if they showed longer unem­ploy­ment. There’s a per­verse logic to it: if other employers have passed on you, why should they spend time finding out why? They don’t. They have soft­ware pro­grams that cut you out before you even have a chance.

This long-​​term unem­ploy­ment trap has nothing to do with long-​​term ben­e­fits. Indeed, Ghayad looked at the labor mar­kets for unem­ployed people who areand aren’t eli­gible for ben­e­fits, and found they’ve been equally dys­func­tional. No, this long-​​term unem­ploy­ment trap has to do with our great reces­sion, and not-​​so-​​great recovery. With a labor market that doesn’t work for people who made the mis­take of losing their job at the wrong time. If any­thing, unem­ploy­ment ben­e­fits have kept people from giving up; remember, you have to be actively looking for a job to qualify for them. The San Fran­cisco Fed, for one, esti­mates that unem­ploy­ment would have been 0.4 per­centage points lower without extended ben­e­fits, mostly because more people would have stopped trying to find work.

Read the article at The Atlantic →