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Many of the Now Unemployed Unlikely to Ever Return to Work

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The unemployment numbers released today indicate an unexpected sluggishness in the job market: payrolls shrank by 131,000 and the unemployment rate remains at 9.5%. In the week ending July 31, the number of new unemployment claims was 479,000; the total number of unemployed was 14.6 million as of July.

But looking for work has gotten unexpectedly harder in recent months because of a new trend: some companies specifically wish to exclude the unemployed from consideration when hiring.

A Florida-based recruiting company specializing in telecommunications and technology jobs posted a job opening for which the anonymous employer would not consider anyone who was unemployed, regardless of skills or qualifications. According to UPI, Howard Lawson, a recruiter for The People Place, said there is a “growing trend” of companies seeking to hire only the currently employed.

It appears that many employers now deem the unemployed as damaged goods or else as lazy and unwilling to work. To fill job openings, some have embraced “recycling” or considering for job openings only those already employed elsewhere, in addition to the old standbys of outsourcing and bringing employees into the country on a work visa. Indeed, politicians seem to recognize the harsh economic realities: the administration is training IT workers abroad in a program to help outsourcers find skilled overseas workers.

This trend of abandoning the American worker is consistent with the idea that the current recession is structural in origin, that is, with the idea that the vast majority of the now unemployed will never return to work because there simply won’t be enough new jobs created by the shrinking U.S. economy to absorb them. For decades jobs have been going abroad. There is nothing the administration can do now to bring those jobs back. Indeed, these structural changes are not new but have been at work for the last two decades or more, with fewer employees than before the onset of an economic downturn returning to the workplace following each recession because the real economy has been shedding jobs with each downturn.

Because there will be fewer jobs that do remain in the U.S., the competition for them will necessarily be fierce. This is already reflected in employers preferring to hire only those already employed, seeing them as more competitive and willing and able to work than those who have been tainted by unemployment. The logic of this is simple but undeniable—the unemployed are seen by employers as having been a part of a failure, a company that could not remain competitive in the downturn. Why should anyone give them a chance?

The changes in the economy promise to put further pressure on the middle class and to push out of reach the American Dream for many. Yet there are indications that politicians are ready to abandon the unemployed for good.

Detecting a turn away from the idea that the vast numbers of the unemployed will ever return to work, some politicians are already abandoning the unemployed, attempting to recast them in negative light as lazy and looking for a handout. In Nevada, for example, Sharon Angle (R) was quoted as saying “You can make more money on unemployment than you can going down and getting one of those jobs that is an honest job.” Such sentiment is likely only to grow as the vast reserve army of the permanently unemployed grows.

How will the permanent loss of millions of jobs impact the economy? Actually, it appears that the smaller economy that will emerge will be more vibrant and richer than ever. It all has to do with global trade and capital flows. There is a waiting in the wings to flood the U.S. because the world’s powerhouse economies must invest their giant trade surpluses somewhere, and the U.S. economy is the only viable option for such investments. This means that the smaller, leaner economy that will emerge from this Great Recession will offer skyrocketing incomes to those who manage to remain part of it, expanding the wealth of the top earners, whose spending will offset the loss of purchasing power represented by millions of permanently unemployed.

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About A. Jurek

A. Jurek is one of the editors at Blogcritics. Contact me at: a.jurek@blogcritics.org
  • Help me out here. I’m not an economist. My mind glazes over at the mere mention of economics. But I am unemployed, so I read your article. And I honestly couldn’t tell whether you’re being ironic or not. “This means that the smaller, leaner economy that will emerge from this Great Recession,” you write (approvingly?), “will offer skyrocketing incomes to those who manage to remain part of it, expanding the wealth of the top earners, whose spending will offset the loss of purchasing power represented by millions of permanently unemployed.”

    That’s great news for top earners. But what will it mean for the everyday lives of us millions of permanently unemployed? Do you propose camps, perhaps, where we could be resettled? You know the kind I mean. With the showers that spew Zyklon B. Is that where we’re headed? If so, please just come out and say so. A few of us might be able to save ourselves by moving to Mexico or someplace.

  • Is this intended as science fiction? A warning bell? How can anyone possibly know the future with this kind of absolute certainty?

    It’s irresponsible to write this sort of thing with no back-up info and no discussion of possible alternatives.

  • Aaron

    So, basically what you are saying is that because I am unemployed and need a job, I am less likely to get a job then someone who is already currently employed? And I don’t deserve a job because I am lazy? Somehow it was my fault that all the MBA managers in my company could not handle financing and therefore my department was outsourced?

  • Mr. Jurek is essentially right. It’s difficult to envisage rebuilding the manufacturing sector in America, and that spells chronic unemployment for most unskilled workers. So this is not science fiction. Robert Reich had foretold this scenario even as Clinton was assuming office, in The Work of Nations/.

    Whether Mr. Jurek recommends concentration camps for the chronically unemployed, I’m not qualified to say.

  • A. Jurek

    Is this intended as science fiction? A warning bell?

    The latter, I think. It is certainly a meditation on the trends already at work.

    But what will it mean for the everyday lives of us millions of permanently unemployed?

    That’s a good question, Alan. I don’t know the answer, but if other nations where the economy had been shrinking for decades are any indication, we’re likely to see the rise of slums, as in South America, to accompany the vast numbers of the poor.

    Another possibility — again I am not recommending any of this, merely writing about the trends and evidence of larger issues already at work — if the health care legislation remains in force and survives legal challenges, is that after 2014 a move toward reinstitutionalization of millions of poor and homeless, among whom there may be many of the unemployable and permanently economically dislocated. Reinstitutionalization is the kind of “market solution” beloved of the conservative politicians because it gets rid of a social problem by funneling billions into the hands of private sector, in this case a therapeutic complex that is very likely to result from the availability of nearly universal health care. We have to remember that the homeless and the poor are already seen as essentially mentally ill and have been for decades by social services providers, reflecting a movement toward medicalization of poverty and other social ills. For example, most of the homeless who enter homeless shelters today are encouraged to agree to take psychiatric medications, often as a condition for any assistance. That in the future this may intensify is not that much of a stretch and neither is the possibility that near universal health care will result in the homeless and the poor being absorbed into a vast therapeutic complex.

    And I don’t deserve a job because I am lazy? Somehow it was my fault that all the MBA managers in my company could not handle financing and therefore my department was outsourced?

    That, Aaron, is certainly what some employers and politicians as quoted in the article think.

  • A. Jurek

    Mr. Jurek is essentially right. It’s difficult to envisage rebuilding the manufacturing sector in America, and that spells chronic unemployment for most unskilled workers.

    What’s interesting, Roger, is that today even college graduates are having problems finding work, as reported by the New York Times article “For a New Generation, an Elusive American Dream.” And the UPI link above in the article refers to people seeking IT and other tech jobs and being told that as unemployed they need not apply. So the prospect of unemployability has touched even skilled workers.

  • Ok, I get Republicans/Conservatives are blaming Obama/Democrats/Progressives for everything from jobs to the economic meltdown to their impotence and constipation.

    Please, just ONE Republican stand up and tell the American PEOPLE what their plan is to bring jobs back to the USA. I couldn’t help but notice how many jobs were LOST while Republicans controlled our government. Maybe they can tell us what they’d do different.

    I think big business is refusing to hire or loan because they want to make Obama/Biden look BAD!

  • A. Jurek, your analytical detachment is chilling. I see from your bio that you normally write about thrillers, mysteries and suspense titles. But handyguy makes a good point in asking about science fiction. I’m reminded of Gattaca, the 1997 sci-fi film starring Ethan Hawke. In the not-so-distant future, biometrically certified Valids qualify for professional employment while In-Valids are relegated to menial jobs. You’re like one of the expressionless, emotionless Valids that Ethan Hawke works with. Even worse, you probably take that as a compliment!

    As a writer, though, you ought to have more respect for the language. “Reinstitutionalization” means institutionalizing people who’ve been there before. You’re talking about institutionalizing millions of first-timers (like me) who’ve never seen the inside of a “therapeutic complex” such as you’re proposing.

    You have a gift for Orwellian euphemism, Mr. Jurek. But I suspect beneath your frigid exterior beats a heart of pure ice.

  • John Wilson

    Jurek is right: we will have a huge cadre of unemployed and unemployable people. Slums will develop and black market economies. When hiring authorities are so powerful nepotism, favoritism and bribery will flourish.

    We’ve misused our opportunities and abused the economy. We have no consciousness of what we’ve done wrong and no idea of what to do to improve things. All we have are old bromides and defunct ideas.

    I suppose the whole system must collapse and some new system arise in a couple hundred years from the ashes.

  • About time you’re coming to that realization, John Wilson. And you don’t have to have the heart as cold as ice to see that or to write about it.

  • However futurist the idea may sound, Alan, it’s not that far fetched. We already incarcerate a good portion of the population for silly drug offenses. Adding the chronically unemployed to the list is the next logical step. In one clean sweep, we get rid of the potential troublemakers. So yes, welcome to 1984, modern day edition, the not too distant a future if the powers that be have their way and American version of capitalism prevails.

    Mr. Jurek may indeed be onto something here.

  • Mr. Jurek, I think some people fail to appreciate your lack of sugar-coating skills. You’d be advised to learn how to play this tune instead, you meanie.

  • I think A. Jurek is right on the proverbial money. The “system” does not care if the unemployed go on medical assistance and are labeled mentally ill or incompetent. The “system” is the unmovable, merciless force, not Jurek, the messenger.

    I used to know a social worker and before she quit (lol) she said that after the welfare state came and went, the new criteria was for people to apply for SSI, which is supplemental security income, given primarily to those who never worked. In my hood there are a lot of people on food stamps and other assistance, and I see that some make a “career” out of it generationally. There is no adverse consequence of having out of wedlock babies early and often, since one will likely receive more bennies for doing so.

    A leaner, meaner economy will, I believe, bring out the competitive spirit that made this country so great. Whatever doesn’t kill you makes you stronger-omics, if you will. Some will start their own businesses, as the immigrant has done for centuries. It takes hard, hard work to succeed but that’s the American dream in a nutshell. The prerequisite for all dreams coming true is to work your butt off, and we already take far fewer vacations than our Euro counterparts anyway. People are genuinely upset at being on unemployment, not “enjoying” their “free ride” of checks, which indicates that Americans want to work. If they want to badly enough perhaps they’d take some of the jobs that have been outsourced to illegal immigrants. It is true that corps have been outsourcing jobs abroad, but as private corps they have the right to do so. If they get cheaper and perhaps less “entitled” labor, that’s capitalism at work. It’s as American as the apple pie you can’t afford to buy anymore–so bake it, put out a sign, and make your own pie business. We can handle this stuff, America! There are actually some folks who deserve to lose their job–ever have a bad bout with customer service or a clerk or union worker? What he said.

  • In the category of “better to light a candle than curse the darkness”….

    Interesting op-ed in today’s NY Times by Nobel economist Edmund Phelps, relevant here.

    The Economy Needs a Bit of Ingenuity

    He says it’s a false premise to blame the stagnant economy on a lack of demand. The problems are structural: Business owners and investors alike think short-term, not long term. A vicious cycle is developing: less venture capital because there is less innovation because there is less…venture capital.

    His proposed solutions:
    • Create a “First National Bank of Innovation” – a state-sponsored network of merchant banks that invest in and lend to innovative projects.
    • Tie executives’ compensation to long-term performance rather than one-year profits; and link fund managers’ pay to skill in picking stocks, not in marketing their funds.
    • Exempting start-ups from corporate income tax for a defined period
    • Tax credits for companies for employing low-wage workers – we need to create jobs at all levels. [Early last year, Singapore began giving such credits – worth several billion dollars – and staved off a recession. Unemployment there is around 3 percent.]

  • “He says it’s a false premise to blame the stagnant economy on a lack of demand. The problems are structural.”

    Good point, though my idea of “structural” certainly different from that of Mr.Phelps’s.

    Contrary to popular double-talk, the state of the economy is never preemptied by (the level of) consumption. If anything, consumption is but one of the indices.

  • John Wilson

    Pretty dumb article, just a grabbag of poor ideas. They have the smell of “hail mary” passes.

  • John Wilson

    In 16 that’s Phelps article I refer to.

    US manufacturing capacity is way over needs: we simply have too much capacity to handle our markets already, so throwing more money at them will be worse than useless. It’s the end of ‘supply side’ economics.

    We have to create more market demand to raise employment.

  • Pigbitin Mad

    I think this article is correct. That’s the reason we should start burning this country to the ground. If we can’t have it nobody can. Burning down every Wal Mart store would be a great place to start.

  • marvin nubwaxer

    we are headed toward seveeral crises due to large numbers of permanently unemployed. for one, i believe we will have a mental health crisis of depression and anxiety, suicide and other behaviors as a result of long term idleness. our social and economic costs will be staggering. can we imagine a society with millions among us left to a future of mere subsistence life?

  • marvin nubwaxer

    the class warfare you ear but is not poor against the rich but the rich against the poor. we ae headed toward having a crisis of millions permanently unemployed and their drag on the economy as well as a looming mental health problem. I believe we are headed into a civil war, maybe not an armed conflict, but vicious fight to the death of both the right and the left.

  • Igor

    You may be right, Marvin. This society may be building up to a final bonfire in which the poor (of ever increasing numbers) finally rebel against the mighty rich and hang them from lampposts or drive them down Main Street in tumbrels on a final trip to The Block. No doubt the rich will protest their personal innocence and the righteousness of their lives to the very end.

    After all, there’s historical precedence.