Tuesday, June 25, 2013

Disability Awards are Down, but Unemployment Still Hurts

"Most of Washington seemingly either forgot about the jobless, or decided that the best way to cure unemployment was to intensify the suffering of the unemployed." - Paul Krugman, New York Times (June 23, 2013)

Jobs, Turnover, and Discrimination

Research by Ghayad and William Dickens (Federal Reserve Bank of Boston) showed that the long-term unemployed are struggling to find work, no matter how many job openings there are. (Currently there are 3.8 million job openings for 11.7 million unemployed Americans).

Wall Street Journal (June 24, 2013) - Economist Rand Ghayad says,"Once you are long-term unemployed, nobody calls you back" --- and Joe Carbone, president of WorkPlace, says, "We are losing thousands of people a day. This is like an epidemic."

The Atlantic (April 13, 2013) The Terrifying Reality of Long-Term Unemployment - Employers intentionally screen out the long-term unemployed, even if their resumé has the same work experience as someone unemployed for less than six months.

New York Times (February 17, 2013) When Being Jobless Is a Barrier to Finding a Job - The National Employment Law Project reported that companies across the country often posted job notices explicitly excluding applicants who are unemployed.

Slate (Annie Lowrey) "The longer a worker is unemployed, the longer one tends to stay unemployed. Businesses hesitate to hire people who have not been working. Those workers tend to get discouraged. The result is what wonks call "hysteresis," where the scars from joblessness diminish the chance of future employment and reduce future earnings."

The editorial board of the New York Times writes, "There is a durable belief that much of today’s unemployment is rooted in a skills gap, in which good jobs go unfilled for lack of qualified applicants. This is mostly a corporate fiction, based in part on self-interest and a misreading of government data."

Cause and Effect

Washington Post (April 15, 2013) Eric Rosengren, president of the Federal Reserve Bank of Boston: "The longer the economy muddles along, the greater the chance that those workers’ skills will atrophy. That could threaten the foundations of the economy. Some of the things that started out being cyclical are in danger of becoming structural."

Long-term unemployment was a major structural problem after the Great Depression too. An essay by Richard Jensen suggests, it took World War II to finally solve the problem: “The war, by removing millions of prime men from the labor market, by restructuring the work process, by subsidizing wages, and by massive retraining, finally gave the private sector the methods and the incentives to rehire the hard-core.”

Yahoo (June 24,2013) The Middle Class is Getting Fired - "The latest Wall Street Journal/NBC News Poll found that 58% of Americans think the U.S. is still in recession, even though the recession officially ended four years ago. The bulk of people are getting either downsized, or outsourced, or globalized… and temp staffers are filling the holes."

Scores of workers have been applying to ManpowerGroup, the temporary-staffing agency, which sends more than 600,000 men and women to factories, call centers, cubicle farms and other work sites (up from around 450,000 two years ago.) ManpowerGroup's CEO and Chairman, Jeffrey A. Joerres, says American workers "have to be more agile" and that some "just want to do the same job" --- as if saying, expect only temporary work and be prepared to job-hop.

Last month a tent city sprang up in the New York City as hundreds camped out in order to secure an application for elevator apprenticeships. The job seekers waited as long as six days for IBEW Local 3 to distribute the 750 applications for just 75 openings.

Last year the Wall Street Journal reported that not enough people were quitting their jobs, and that there's not enough churn in the work force --- and that low-turnover in the job market is exasperating the unemployment situation. (One can assume, according to Bureau of Labor Statistics' JOLT report, that of the people who are being hired, most of these people are being hired for temporary work, then being laid off, and then reapplying again for other temporary jobs.)

Social Security Disability

But last year the Wall Street Journal also reported that many desperate Americans may be seeking refuge in the disability program as a last resort after their unemployment insurance and savings run out. But earlier this year, in a new study by Jesse Rothstein (University of California, Berkeley and NBER) found that there was "no indication that expiration of UI benefits causes DI applications."

Last year the Congressional Budget Office also did study on this subject, and according to the Huffington Post, had found that "The rise in America's ranks of disabled stems from an aging population, a surge in women workers, changes in the law in the 1980s and a terrible economy in which disabled people can't find jobs" and that "the biggest jump in the disabled population came from aging Baby Boomers."

Now the Wall Street Journal is acknowledging that study: "The sharp rise in federal disability rolls in recent years has sparked worry that able-bodied workers are using the system to hide from the weak job market. But new research suggests those fears may be overblown."

If you cannot do the work you did in the 15 years before you became disabled, the Social Security Administration looks to see if you can do any other kind of work, taking into account your age, education, past experience and skills.

Also, if a person is low-educated and/or low-skilled, and has worked labor intensive jobs most of their life (while on their feet 8 hours a day), just by being idle after a lengthy amount of time can exasperate any other disability that someone might have --- just by being unemployed, especially for older workers, be cause and/or hasten atrophy.

A person with muscular atrophy can become unable to perform certain tasks, or worsen the risks of accidents while performing those tasks (like walking). Muscular atrophy increases the risks of falling in conditions such as IBM ("inclusion body myositis"). Muscular atrophy affects a major number of elderly and IBM is an increasingly prevalent disease, being the most common cause of inflammatory myopathy in people over 50. Employers expect potential job candidates to "hit the ground running", and are not in the business of physical rehabilitation; nor will they give someone a chance to reacclimatize back into the job market.

The most common claimed disability was for bone and muscle pain, including lower back pain, followed closely by mental disorders. See: Suicides Spike 30% for Baby Boomers

Social Security spokesman Mark Hinkle said the agency follows the strict legal definition of disability when awarding benefits. "Even with this very strict standard, there has been growth in the disability program, and the primary reason for this growth is demographics." (an aging population). He noted however that approval rates have declined as applications for benefits have increased.

In fact, last year in 2012 there were 2.8 million Social Security disability claims, but there were only 983,600 awards for "disabled workers". Awards actually went down from the previous year, from 1.01 million to 983,600.

Coping with Long-term Unemployment

Daily Finance: The trauma of long-term unemployment - "Researchers found that the long-term unemployed will suffer deep mental and emotional scars from the experience. A Gallup study in the Economic Journal found that those who were out of work for at least a year took longer to recover emotionally than those who had lost a spouse. The results showed quantifiable declines in their health, their self-esteem and their overall emotional well-being."

Forbes: Surviving Long-Term Unemployment “Indeed, outside of death and divorce, losing a job can be one of the most difficult things a person will deal with.”

When people lose their jobs and become unemployed, despite what Herman Cain says, it's usually not the fault of the unemployed. They can't be blamed for man-made disasters (such as recessions) any more than they can be blamed for natural disasters. Yet many people WITH jobs, still disparage, ridicule and insult the unemployed (also saying that unemployment insurance benefits are "government hand outs").

“The basis of shame is not some personal mistake of ours, but the ignominy, the humiliation we feel that we must be what we are without any choice in the matter, and that this humiliation is seen by everyone.” - Milan Kundera

"If you are depressed, you are living in the past. If you are anxious, you are living in the future. If you are at peace, you are living in the present." - Lao Tzu

But if you are over 50 years old and unemployed, you can not live in the present --- because for most employers, they don't even exist. Here's a report from ABC about older unemployed workers (wait until after the advertisement). The economy might be slowly recovering, but not for the long-term unemployed --- especially not for Baby Boomers over 50 years old. They have been in a continuing struggle to find work in the wake of the Great Recession. After 5 years of trying to find work, and after repeated rejections, it's no wonder they are "dropping out" of the labor force. (See the website www.OverFiftyAndOutOfWork.com)

A Related Post

Long-Term Unemployment: Yesterday, Today and Tomorrow

No comments:

Post a Comment