The Economist: Free Exchange | R.A. | Labour markets: Long-term unemployment is a sticky situationLet me first say that my heart goes out to the long-term unemployed. That is a very difficult situation to be in.
Catherine Rampell tells the troubling story of the long-term unemployed in America, who often find that even their job applications are unwelcome:
A recent review of job vacancy postings on popular sites like Monster.com, CareerBuilder and Craigslist revealed hundreds that said employers would consider (or at least “strongly prefer”) only people currently employed or just recently laid off.
The practice is common enough that New Jersey recently passed a law outlawing job ads that bar unemployed workers from applying. New York and Michigan are considering the idea, and similar legislation has been introduced in Congress. The National Employment Law Project, a nonprofit organization that studies the labor market and helps the unemployed apply for benefits, has been reviewing the issue, and last week issued a report that has nudged more politicians to condemn these ads.
But — and there must always be a but, for this is blogging, and that is the way of things — this is idiotic legislation. Assuming Rampell describes it correctly (it is still legal to have a policy of not hiring the long term unemployed but illegal to say so) this is nothing better than show-we-care lawmaking which puts intentions and emotions about outcomes and results.
Of all these states and congressmen considering introducing such legislation, do any of them know if it actually works? Or have they just decided that we must do something, and this is something, so we must do this?
Let's say employers don't want people who have been unemployed for more than six months. Maybe that's reasonable and productive, and maybe it's evil and mistaken and maybe it's somewhere in between. One thing they could do to act on that belief is to say so openly and transparently, right up front at the point of contact with potential hires.
But let's say they're barred from doing that. They continue not wanting to hire those people, but now they can't say so. What do they do? Change their minds? Or accept their applications and then trash them?
Actually these laws are wrose than useless. If my application is going to be summarily turned down, I'd like to know. I'd want to be spared the false hope. I'd want to be able to more accurately assess my chances. And I'd want to be spared the time of writing another cover letter or filing another application. But no, because some legislators want to demonstrate how big their hearts are, I have to operate in an environment with less information where people pretend their opinions aren't their opinions.
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PS This is an important point R.A. makes: "One of the weird things about the American labour market is that most or all wage negotiation is done after an employer decides whether it wants you or not."
PPS From Rampell's article: "'We may be seeing what’s called statistical discrimination,' said Robert Shimer, a labor economist at the University of Chicago. 'On average, these workers might be less attractive, and employers don’t bother to look more closely to pick out the good ones.'" Statistical discrimination? You mean making decisions based on trends in data? Hrrrrrrrrrrrrrrr.