Jobs are slowly coming back, but that’s small comfort to more than 13 million Americans who remain unemployed. For every current job opening, four people are still looking for a job. Many others have given up even trying to find work.
The American economy is trapped in a vicious cycle. Those who are unemployed can’t afford to buy much more than bare necessities, while people who are working are getting skimpier paychecks. This means consumers don’t have much purchasing power, which has made companies reluctant to hire more employees or raise the wages of those they have. (Big companies are enjoying high profits these days, but the profits are coming largely from their foreign sales.)
You’d think the American public would be demanding government action: a new WPA for the long-term unemployed, a second stimulus to make up for the shortfall in purchasing power, stronger safety nets. But we’re not hearing much clamor for any of this. One reason is that those who remain unemployed have little or no political clout.
Who are they?
Women who lost their jobs are having a harder time getting back to work than men. Men took a bigger hit during the recession because industries that employ lots of men — manufacturing, transportation and construction — got whacked early in the downturn. Construction is still in the doldrums, but manufacturing and transportation have picked up, so men are starting to be rehired.
But women who fill the ranks of teachers, public health professionals and social workers are in bad shape. These jobs continue to be slashed by state and local governments. Public schools alone accounted for nearly 40% of the nation’s total public sector job losses in the last year. From March 2010 to March 2011, women lost 214,000 public sector jobs, compared with a loss of 115,000 public jobs by men. Women also tend to be real estate agents, appraisers and home decorators. Because the housing market is still in the dumps and home sales continue to drop across the country, these jobs are also in short supply and are unlikely to come back anytime soon.
Unmarried mothers are having a particularly difficult time getting back jobs because their work was heavily concentrated in the retail, restaurant and hotel sectors. Many of these jobs disappeared when consumers reduced their discretionary spending, and they won’t come back in force until consumers start spending more again. According to a new report by the California Budget Project, the recession erased more than half the jobs single mothers in California had gained from 1992 to 2002. The result has been a drop in the share of unmarried mothers in jobs, from 69.2% in 2007 to 58.8% in 2010. Unmarried mothers who still have jobs are working fewer hours per week than before.
In California, as elsewhere in the country, blacks continue to be hard hit. Their unemployment rate in the state reached 20% in March, up 5% from the year before. That’s more than double their rate before the downturn. Some of this is because of the comparatively low education levels of many black Californians and their weak connections to the labor market. Some is due to employer discrimination. Blacks were among the last hired before the recession and therefore among the first to be let go in the downturn. That means they’ll be among the last hired as the economy recovers.
The ranks of the unemployed also include many young people who have never been in the job market and are unable to land a first job. Employers who have their pick of applicants see no reason to hire someone without a track record, particularly those without much education. Unemployment among high school dropouts is hovering around 30%. Even recent college graduates are having a much harder time than usual finding a job. Many are settling for jobs that don’t ordinarily require college degrees, which pushes those with less education even further back in the line.
Another group in trouble are those who have been out of work for six months or longer. Employers seem to assume they aren’t as qualified or reliable as those who have been working more recently. Some employers will only consider applicants currently employed elsewhere. Older workers who have lost their jobs are at the greatest risk of continued unemployment. According to research by the Urban Institute, once you’re laid off, your chance of finding another job within a year is 36% if you’re under the age of 34. But your odds drop the older you get. If you’re jobless and in your 50s, your chance of landing another job within the year is only 24%. Over 62, you’ve got only an 18% chance.
What do those who are jobless have in common? They lack the political connections and organizations that would otherwise demand policies to spur job growth. There’s no National Assn. of Unemployed People with a platoon of Washington lobbyists and a war chest of potential campaign contributions to get the attention of politicians.
As a result, too many are likely to remain unemployed for months if not years. That’s bad news, not only for them but for America.
Robert B. Reich is a professor of public policy at UC Berkeley and former U.S. secretary of Labor. His most recent book is “Aftershock: The Next Economy and America’s Future.”