AARP Home » AARP Blog » AARP »Public Policy Institute »When Unemployment Goes On and On

When Unemployment Goes On and On

Posted on 06/2/2014 by |AARP Blog Author | Comments

Public Policy Institute Print Print

He remembers the exact date — Nov. 30, 2008. That is when Hue Galloway of New Britain, Conn., was laid off with just a week’s notice from his job repairing printers and computers throughout the state. His annual evaluations, he said, had been good — 30 years of experience and “never a bad review” — but that didn’t keep him from being let go without any real explanation. He lived on unemployment insurance until that ran out, and he had some savings, but he eventually declared bankruptcy.

Over three years, Mr. Galloway sent out some 700 or more résumés, received about a dozen replies, and had four or five interviews, none of which led to anything. At 62, he did what many older unsuccessful jobseekers do: He took early Social Security benefits and gave up looking. He can “just get by.”

Because he is not looking for work, Mr. Galloway is no longer officially unemployed, although if something came up, he says, he would take it. But if he is like the other long-term unemployed studied by Princeton professors Alan Krueger, Judd Cramer and David Cho, his chances of returning to work are slim indeed. Only about 1 in 9 unemployed workers had a steady, full-time job after 16 months of unemployment, according to their analyses.

As time goes on, the unemployed find it harder and harder to land a job, in part because they have become damaged goods in the eyes of many employers. When he gave up his job search in 2012, Mr. Galloway was one of about 1 million unemployed workers age 55 or older who had been out of work and looking for a job for more than six months. That was up from fewer than 200,000 long-term unemployed older Americans in 2007, the year the Great Recession officially began.

In another study about the barriers faced by long-term jobseekers, Northeastern University’s Rand Ghayad sent out thousands of résumés to employers and discovered that interview callbacks were far less common when applicants were long-term than short-term unemployed. In fact, the long-term unemployed received fewer interview requests than jobseekers with less relevant work experience but shorter unemployment.

The employment news seemed to be looking up recently, with an estimated 288,000 jobs added to the economy in April. Unemployment rates for older and younger Americans were well below what they had been even a year earlier and much lower than their recent all-time highs.

But there are still fewer jobs, fewer employed and more people looking for work than at the start of the recession. Overall job growth has not returned to where it was then.

The longer workers are out of a job, the more likely they are — like Hue Galloway — to remain unemployed and eventually to give up entirely and drop out of the labor force. The older they are, the more likely that is to happen. This underscores the importance of Social Security for older workers who have lost their main source of income and who have little hope of getting it back — even though taking Social Security early means permanently reduced monthly benefits —and possible financial hardship as the years go by.

Note: A longer version of this blog appears on HuffingtonPost/Fifty. Dave Nathan of AARP Media Relations contributed reporting to the blog.

Sara Rix, AARP About the author: Sara E. Rix focuses on labor force issues in her role as a senior strategic policy adviser on the PPI Economics Team.