Tuesday, May 24, 2011

Help Wanted

By Ellen Anderson, Director of Research. 

If you have never checked it out, I recommend the Upjohn Institute’s Employment Research Newsletter. Their researchers do a good job of synthesizing complex issues into short research briefs. In last month’s edition, Randall Eberts asks the question “when will the labor market recover” and asks readers to consider the following. During the first 16 months of economic recovery since the Great Recession, “Job openings increased from 2.3 million per month to 3.3 million per month. However, hiring has remained flat, increasing by only 3.6 percent. How can job openings be increasing so much faster than new hires? Obviously, new openings are going unfilled, but why?” 

Eberts discusses the mismatch between skills demanded by employers and skills held by jobless workers, particularly in industries like manufacturing and construction which have undergone significant regional restructuring, the mobility constraints placed on workers due to declining housing values, and the link between duration of unemployment and ability to find employment. What the brief misses is an issue recently raised by Time magazine: jobless discrimination. The article “Jobless Discrimination? When Firms Won't Even Consider Hiring Anyone Unemployed” notes that when Sony Ericsson moved its headquarters to Atlanta, its online recruitment materials noted that no unemployed candidates would be considered. The Equal Employment Opportunity Commission has stated that discriminating against those who are currently unemployed is becoming business as usual for many corporations. 

Refusing to hire people on the basis of race, religion, age or disability — among other categories — is illegal. But companies that turn away jobless people as a group are generally not breaking the law — at least for now. Job seekers have long known, of course, that it's easier to land a job when you are still working. There are no hard data on discrimination against the unemployed. But there have been reports from across the country of companies' making clear in job listings that they are not interested in people who are out of work. Employment experts say other companies have policies of hiring only people with jobs — but do not publicly acknowledge their bias.

This is an issue many economists, researchers, and Washington politicos have missed. However, just a few months ago New Jersey became the first state to outlaw discrimination based on employment status. With the proven persistent gap between job openings and hiring, more states will likely follow suit. We need to be honest about what is really going on, this issue is not simply due to worker skill mismatch. There are also other issues at play.