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Introducing This Blog

Thursday, May 22, 2014

Like many people of my generation, I was faced with a stark choice: either to endure a life of increasing poverty at home, or to embark on an arduous and epochal journey of many thousands of miles searching for better education and opportunities. 

 

Few months after I arrived in Boston, the U.S. economy was hit with a severe recession which left 15 million people unemployed. Being a native of Lebanon, I knew very well how it feels to face a tough job market. As many of my friends struggled to find jobs in 2009, I decided to search for answers to explain why smart, educated, and experienced people remained out of work for so long, despite hundreds of thousands of job vacancies. What I found after more than five years of research has challenged conventional assumptions about long-term unemployment and shifted the national debate on what many analysts and policy makers see as one of the most pressing problems facing the US economy.

 

In fact, let me start this blog off with a chart that’s central to why we should all keep thinking about the long-term unemployed, the underlying story of what’s really going on in this labor market. What the chart below shows is an “unemployment cliff”; after six months of nonemployment, jobseekers experienced a dramatic drop-off in interview requests from prospective employers even if they had more work experience and better qualifications than candidates out of work for six months or less.

 

All what one can say about this chart is that we are going through a terrifying unemployment crisis. It's hard to imagine a big skills or incentives gap between people unemployed for six months and people unemployed for seven months. But it's not hard to imagine companies treating their resumes differently. Overrun HR departments might just toss the resumes of applicants who have been out of work for six months or more, because they assume there must be something wrong with people who have been out of work that long. 

 

Circles don't get more vicious than this. The people who need work the most can't even get an interview, let alone a job. It's a cycle that could end with the long-term unemployed becoming unemployable. It's what economists call hysteresis, the idea being that a slump, left untreated, can make us permanently poorer by reducing our future ability to do and make things. You should be scared anytime you see the words "permanently" and "poorer" together in a sentence -- especially if you're a policymaker. We need more stimulus, and we need it now. We need to do a better job in helping those who have been out of work for a long period of time. 

 

I’ll be using this space to present new ideas and information that can be helpful for both jobseekers and policymakers. Because my current agenda is mainly focused on the crisis of long-term unemployment, I expect to be posting a lot on this issue and other related topics which will hopefully keep readers up to date on new initiatives and plans for helping those who need help the most.

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Who Am I?

I  am an Associate Expert at The Brattle Group and a Research Advisor at the Institute for Career Transitions of MIT Sloan School of Management. Prior to that, I was a Visiting Scholar in the Research Department of the Federal Reserve Bank of Boston, a Consultant for the Brookings Institution in D.C. and the International Labor Organization in Geneva.

Other Posts

The Employment Puzzle: Should Dodd and Frank Be Blamed?

August 19, 2014

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