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Long-Term Unemployed Left Out Of Recovery: Study

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LONG TERM UNEMPLOYED
Unemployment insurance for the long-term jobless will expire on Dec. 29 unless Congress acts. (AP Photo/J. Scott Applewhite) | AP

Neal Cassel lost his job handling computer support for a law firm in October of last year. The Brandon, Fla., resident suspects that his status as one of the long-term unemployed may be making it harder for him to get back to work.

"As you're out of work longer, someone may see that and assume maybe you're not a good candidate because you've been out of work so long," Cassel, 53, said in an interview. "Maybe I'm just trying to justify the fact that I haven't gotten hired."

A growing body of research suggests employers do look askance at long-term unemployed job candidates. The latest, a recently released policy brief by Rand Ghayad and William Dickens for the Federal Reserve Bank of Boston, finds that people out of work six months or more are missing out on the recovery.

"It's not that they don't have the skills –- it's just that employers don't hire them because they think badly of them," Ghayad told HuffPost, explaining the likeliest reason that the long-term jobless are not benefiting from increased hiring.

For their research, Ghayad and Dickens looked at the "Beveridge curve," a graph that normally shows an inverse relationship between job vacancies and the unemployment rate over time. The economic recovery that started halfway through 2009 has thrown the curve out of whack, suggesting to some economists that high unemployment has become permanent, or "structural," because the jobless lack skills.

Ghayad and Dickens looked at the curve for different groups -- laid-off workers of various ages, various industries -- and found it askew for all but one group: the short-term unemployed. In other words, people who've been out of work for less than six months are being hired as new jobs open up, but the long-term jobless in every industry and age group have been left hanging.

"One reason why the Beveridge curve relationship for the long-term unemployed has apparently shifted may be a change in the desirability of the long-term unemployed to employers," Ghayad and Dickens wrote. "Another possibility is that the long-term unemployed in this recession may be searching less intensively -- either because jobs are much harder to find or because of the availability of unprecedented amounts and durations of unemployment benefits."

The Boston Fed brief comes as lawmakers in Washington are deciding whether the federal government should continue to offer benefits to people out of work six months or longer. During normal times, workers laid off through no fault of their own receive six months of benefits and no more. In recessions, Congress traditionally adds more weeks of benefits. The current regimen, which offers up to 47 weeks of compensation, is set to expire on Dec. 29.

The notion that unemployment insurance discourages people from seeking work has a lot of currency with Republicans on Capitol Hill, who often tell stories about businesses back home that say they want to hire but can't lure individuals who are receiving benefits. Ghayad said that may be one factor, but a bigger problem is discrimination against the jobless in hiring, a phenomenon documented in several studies.

According to the latest data, nearly 5 million Americans have been unemployed for six months or longer, and a dwindling share of them receive benefits. The 2 million long-term jobless who are still receiving aid will be cut off at the end of the year if Congress doesn't act.

Cassel said that he has had some interviews and that he does everything he can to avoid missing a phone call from a potential employer. He's optimistic he'll find new work soon.

"I don't go anywhere, I don't do anything. I jump out of my skin anytime the phone rings," he said. "It's really amazing how you hear stories about it and it doesn't mean anything until you're in it. You can't comprehend being out of work 14 months."

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