BUSINESS
04/15/2013 02:57 pm ET

Unemployment Discrimination Puts Long-Term Jobless At Huge Disadvantage: Study

Businesses would rather hire somebody with no relevant experience than hire a person who has been unemployed for a long time, according to new research by Rand Ghayad at Northeastern University.

Ghayad, a Ph.D. candidate in applied economics, sent out thousands of fake resumes in response to hundreds of online job postings and tracked the responses from the employers. The dummy candidates with long gaps in their resumes received fewer callbacks than the candidates with shorter gaps -- even if the fictional resume showed no experience relevant to the job.

"Once you are long-term unemployed, even if you come from the same industry, even if you have the right skills, it doesn't matter to employers anymore," Ghayad told The Huffington Post. "They prefer to hire someone who's short-term unemployed."

Previous research by Ghayad and others has yielded similar results: Companies just don't want the long-term jobless.

Since late 2009, roughly 40 percent of the unemployed have been out of work six months or longer, which is the duration economists consider "long term." It's the highest rate of long-term joblessness the country has seen since at least the 1940s, according to the Labor Department. As of March, that's 4.6 million people.

Ghayad's working paper is the latest piece of evidence that long-term joblessness persists not because workers are defective, but because the surplus labor supply allows employers to be picky about the hiring process.

Using an online job board, Ghayad sent 4,800 resumes to 600 job openings across the country. The end date of a fake candidate's previous job showed how long a person had been unemployed. Candidates with relevant experience who were unemployed for a short time had a callback rate of roughly 16 percent. Recently unemployed candidates with no relevant experience had a callback rate of roughly 9 percent, while candidates with good experience who had been unemployed for a long time had a callback rate of roughly 3 percent.

Employers are sometimes up front about their distaste for the jobless, telling would-be applicants not to bother if they don't already have jobs.

In 2011, President Barack Obama proposed banning discrimination against the jobless as part of a broader job creation bill, but Congress wasn't interested. Some jurisdictions have pursued their own initiatives, with the New York City Council banning unemployment discrimination in January.

[H/T The Atlantic]

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