BUSINESS
09/01/2011 06:08 pm ET | Updated Nov 01, 2011

Long-Term Unemployed Discouraged, But Still Looking For Jobs, New Study Finds

Michael O'Leary, 45, hasn't stopped applying for jobs, but he has given up hope that he'll ever get one.

Like many of the 6.2 million Americans out of work for six months or more, he cannot afford to give up looking, but experience has taught him not to expect anything for his efforts. In the past two years alone, O'Leary has submitted over a thousand resumes and gotten exactly five callbacks -- and no offers.

Many economists have already predicted slow jobs growth for Friday's latest monthly snapshot of the labor market. O'Leary's prediction is even bleaker.

"Current outlook is: I don't see anything getter better now, or any time in the near future, and that's based on the jobs I see available," he said. "In Washington, they say that they're trying to do things to help the unemployed, but there's no job growth, there just isn't."

O'Leary, a participant in a new study released Thursday, "Out of Work and Losing Hope: The Misery and Bleak Expectations of American Workers," is not alone. Nearly half of those surveyed say they don't think the economy will recover in the next five years -- and 18 percent say they don't think it will recover, ever.

The study, released by the John J. Heldrich Center for Workforce Development at Rutgers, surveyed more than 1,200 respondents beginning in August 2009 and is the fourth part of a series documenting the feelings and experiences of those who lost a job during the Great Recession. (Of the initial respondents, 675 were interviewed in this latest round.)

Two years into the so-called recovery, roughly a quarter of the respondents who were unemployed in the recession have found full-time work and half of the new jobs are at lower pay levels, the study found. In 2009, over half of the respondents thought the economy would begin to recover within two years -- but now, less than a third think the next two years will see the beginning of recovery.

"Their horizon for a brighter day is moving away from them," said Carl E. Van Horn, a labor economist at Rutgers University and one of the authors of the report. "That's understandable because their optimism has been crushed by reality: They are still not working, or if they are working they're making a lot less money. You're either devastated or you're hurting, that's the range."

Since the beginning of the recession, a record number of people have dropped out of the work force, as the labor force participation rate slipped to a new low of 63.9 percent, according to the government's latest numbers. But Van Horn found that only 6 percent of his group had given up looking because they were too discouraged, while 41 percent continued the hunt -- even in the face of great discouragement.

"Americans like to work," Van Horn said. "These are people who have been rejected over and over again and yet they're out there actively searching for work and using most of the strategies that anyone would tell them. They're no longer optimistic but they are trying."

O'Leary said he starts his days applying for jobs on Craigslist and a handful of other websites. He has given his resume to every business near his small town of Cottonwood, Calif., whether or not he had the skills for the position. At this point, he said, he applies to any job he sees. He frequently gets rejected because he is over-qualified, he said.

Back in 2006, O'Leary explained, fresh from earning an associate's degree in natural resources from a nearby college, the world -- and his place in it -- felt fundamentally different.

Until April 2008, O'Leary was working as a technician, making maps for a conservation district in northern California. After 20 years in the food service industry, he finally loved what he was doing. But then the economy began to fall apart, funding dried up and his position was eliminated. At first, he said, he felt confident he'd find something else -- he had solid professional contacts and excellent recommendations -- but that feeling, along with his unemployment insurance, dried up last year.

"I loved going to work every day -- and that's the American dream, right?" O'Leary asked. "It's just unattainable now, it really is."

Like 58 percent of those surveyed, O'Leary's financial situation is worse than it was two years ago. Now, he and his wife, who is still employed, survive paycheck to paycheck, barely making payment on their bills. With winter coming, he said, he grows ever more concerned, wondering where they're going to get firewood or propane for warmth and sustenance. This year he even had to stop fishing, the one recreational activity that buoyed his early days of joblessness, because he couldn't afford the $40 license.

He said he considers going back to school, but doesn't know where he would get the funding, or what course of study might lead to a different life. Like many of those who have lost their jobs in recent years, he doesn't know what he could have done differently to change his current circumstances.

One of the distinguishing features of this recession, experts say, is that the long-term unemployed are out of work not because of their own lack of skills, but from the breadth and depth of the job loss.

"The prevailing situation for most people today is that whether you're unemployed or not is random," Van Horn said. "It's random because of the company you work for, or the field that you are in, or what I call random acts of economic violence that you can't protect yourself from."

This week, the White House reported that it didn't expect unemployment to drop below 6 percent until 2016. Next week, Obama will announce a plan for jobs creation. But just 3 percent of Van Horn's group said they had a "lot of confidence" that the government would make progress in the next year on the most important problems facing the country.

Economists say the nation faces a vicious cycle of stagnation, with roughly 70 percent of the economy supported by consumer spending, and consumer confidence dipping while paychecks are spread thin. Van Horn's report points to the stagnation that occurs in the lives of the long-term unemployed.

"As this goes further and further and there's nothing to help them get out of this rut that they're in, it further diminishes their opportunity to ever recover," Van Horn said, listing the details that go hand-in-hand with a seemingly endless job hunt.

"They're losing sleep, avoiding social situations, feeling ashamed or embarrassed, watching their job skills disappear," Van Horn said. "This can become a cluster of very damaged people who go through the rest of their lives in a very diminished situation where as three years ago they were doing okay."