Long-term unemployment hard on economy, individuals
Chuck Davis has 15 years of experience in software testing, but over the past couple years, he's learned a thing or two about roller coasters -- the emotional kind.
Davis, 54, lost his job in Minneapolis in March 2009. Despite the depth of the recession at that time, Davis felt optimistic about his job prospects. After all, he knew loads of people at Fortune 500 companies around the Twin Cities.
Armed with that confidence, he took a few months off and did some remodeling on the home he shares with his wife in North Minneapolis. When Davis started a serious job search, he was shocked by what he found.
"I would say my network of people collapsed," he said. "It was like everybody was getting laid off, and some of their jobs were going away, moving to South America, India," he said.
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Thousands of Minnesotans know the kind of despair that Davis has experienced. Over the past year, an average of about 73,000 workers in the state have been out of a job for six months or longer.
The long-term unemployed workers make up about a third of the state's total jobless population. Nearly two years after the official end of the recession, their ranks have grown steadily and show no sign of shrinking.
Unable to find a job through his network of contacts, Davis, 54, turned to all the popular online job sites. A Navy veteran who served during the Iran hostage crisis in 1979, he attended networking events through a veteran's group.
For months, he had no prospects. Then late last year, just as his extended unemployment insurance was running out, he had a flurry of interviews. The roller coaster soared upward, and then plunged again when nothing panned out.
After two years of unemployment, Davis grew more desperate. Last week, he found himself staring at help-wanted postings on the corkboard at this coffee shop near his house.
One person was looking for a driver to take their daughter to swim practice after school two nights a week. Davis inquired and never heard back.
"I don't see anything right now," he said.
The "long-termers" reflect the ongoing weakness of the job market, said Sylvia Allegretto, an economist at University of California Berkeley.
"We have a job situation that never has gotten underway; it hasn't found its footing," Allegretto said.
Minnesota lost 150,100 jobs from the start of the recession in December 2007 to the low point a couple years later. Since then, employers have restored fewer than one fifth of those jobs.
As if the tight job market weren't challenging enough, the unemployed also face the potential stigma that they're undesirable in the eyes of employers.
The toll this takes on unemployed workers is great, said Phillip Swagel, an economist at the University of Maryland. He worries that the long-term unemployed will become disaffected and lose their connection to the workforce.
Swagel said that's bad for the individual, and for society.
"For the economy, it means really a generation of workers whose skills will deteriorate, as the economy continues and technology passes them by," he said.
That means a less productive workforce and bigger bills for government and taxpayers.
Swagel said many older workers go on disability when they can't find jobs. He thinks it would be better to use those resources to help people retrain in industries that are hiring, and calls that key to lowering long-term unemployment.
Davis, the software tester, has come to that conclusion as well. He recently learned how to operate a computerized machine used in manufacturing. On Wednesday, he scored a temporary job.
Davis doesn't know long it will last, but he looks forward to showing how hard he can work after two years of unemployment.
