The Destruction of Human Capital

Via Kevin Drum, I see that testimony before the Equal Employment Opportunity Commission indicates that some employers are refusing to hire the unemployed:

Several examples of discriminatory help-wanted ads were offered: a Texas electronics company said online that it would "not consider/review anyone NOT currently employed regardless of the reason"; an ad for a restaurant manager position in New Jersey said applicants must be employed; a phone manufacturer's job announcement said "No Unemployed Candidates Will Be Considered At All," according to Helen Norton, associate professor at the University of Colorado School of Law.

Even if the companies pull the language from their ads, many still discriminate against the unemployed, Owens said. The long-term unemployed are perhaps in the worst shape; employers worry that their skills are outdated and pass over them for positions, which means they are unemployed for even longer and have more difficulty finding work.

This is a grim sign for both the job market, and the unemployed.  Employers are indundated with resumes, and one easy way to weed down the pile is to look only at people who are currently employed.  Even though they know how bad the job market is, it's easy to assume that there must be something wrong with them if they can't find a job.  In this job market, such an assumption is free:  there are too many qualified applicants for most positions.


What's happening to the long term unemployed is tragic.  Not only are they becoming less employable as time wears on; they're also losing the economic and social capital that comes from holding a job in our society.  

How to fix this?  Unfortunately, I don't have a good answer.  Long term unemployment is not, as far as I know, a protected category, and unfortunately employers often will be able to point to missing skills.  The best solution is a booming economy and a tight job market, but I don't have any idea when that's coming.

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Megan McArdle is a columnist at Bloomberg View and a former senior editor at The Atlantic. Her new book is The Up Side of Down.

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