Like rubbing salt in a bloody wound, the truth about unemployment stings. Forget that. It hurts. According to a recent report, “Are the Long-Term Unemployed on the Margins of the Labor Market?” by a group of smart scholars at Princeton University, the longer you stay unemployed, the more likely you are to remain unemployed. It sounds like circular logic, but it is the truth. Unfortunately, employers are a lot like your Great-Aunt Agnes, who will tell you (if you bother to listen) that it’s easier to marry young, divorce, and marry again than wait until you’re fifty to find your first husband.
So what does this analogy mean to workers? Three things.
#1. Don’t leave your current gig until you find something better
#2. Don’t try to get fired, hoping to collect unemployment until you hit the lottery
#3. Don’t stay unemployed longer than it takes to pay your cable bill
These Princeton economists presented their findings at the Brookings Institution (also known for having its fair share of bright people) at a time when the news about unemployment rates is fair to partly sunny. For example, according to the Bureau of Labor Statistics, “jobless rates were lower in January (2014) than a year earlier in 367 of the 372 metropolitan areas, higher in 3, and unchanged in 2.”
There is a lot of good reading in the Princeton report, but there are really few surprises. African Americans are more likely than non-minorities to be unemployed for longer periods of time. And, when they do find work, it is usually in low paying, fragile labor industries. Undereducated workers stay unemployed longer than highly educated workers, and when they get back on the job, it is usually for minimum wage or seasonal work.
One of the most significant findings of the report is that “long-term unemployed had a relatively smaller effect on changes in prices and wages” and this is undoubtedly true for a number of reasons, but I would argue that regardless of impact, any nation with large pockets of unemployed people (particularly people <age 40) is not just looking for trouble – it’s asking for it.
As Great-Aunt Agnes would probably also say, “An Idle Mind is the Devil’s Workshop” and I bet she would agree that it’s much easier for unemployed youth to get into mischief than a group of unemployed senior citizens.