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Unemployment

How Social Workers Can Help the Long-Term Unemployed

❶The labor force participation rate can decrease when the rate of growth of the population outweighs that of the employed and unemployed together. Though there have been several definitions of "voluntary" and " involuntary unemployment " in the economics literature, a simple distinction is often applied.

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The Phillips Curve
The Causes of Long-Term Unemployment

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Correspondingly, when job vacancies rise, unemployment should fall as job seekers fill these positions. However, after the Great Recession, both unemployment rates and job vacancy rates remained elevated, indicating that employers have jobs available, but are not choosing from the pool of available workers.

This article explores how people fall into the trap of long-term unemployment, and discusses how this issue has evolved over the past twenty years.

It also describes the effects that long-term unemployment has on individuals, families, and society overall, and explains how people in helping professions such as social work and career counseling can help the long-term unemployed. Social workers can play an important role in helping long-term unemployed individuals, due to their unique training and ability to understand the interplay between social context, emotional health, and human behavior and resilience. This article explains how social workers can further prepare themselves to counsel and assist long-term unemployed clients.

Finally, the article features a section with advice on how friends and family of long-term unemployed individuals can help them manage this challenge. As with short-term unemployment, long-term unemployment does not have one specific cause, but is rather the result of multiple social, economic, and individual factors.

Whether it is a round of layoffs or personal circumstances, the reasons people become unemployed vary. However, while the specific causes of long-term unemployment are still a matter of debate amongst experts, recent and compelling evidence has shown how a combination of employer discrimination and the emotional toll that unemployment has on an individual contributes significantly to the struggles that the long-term unemployed encounter when seeking jobs.

A study conducted by Dr. Rand Ghayad, PhD, and published by the Federal Reserve Bank of Boston, discovered that employer discrimination plays a significant role in keeping the long-term unemployed from receiving fair consideration in the job market. For his study, Dr. Ghayad and his colleague William Dickens sent out about 4, fake resumes to actual job listings. These resumes all had identical credentials, except for the length of unemployment and level of industry experience.

Ghayad found that the resumes that indicated a span of unemployment longer than 6 months received almost no responses. Additionally, he found that employers actually preferred short-term unemployed individuals with little to no industry experience over long-term unemployed individuals with relevant professional experience. These findings suggested that the time an individual has been unemployed took precedence over their actual qualifications for a job. Through his own sociological research of long-term unemployed Americans, Professor Sharone found that the risk of falling into the trap of long-term unemployment is roughly the same for all individuals, regardless of their degree of education, once they have lost their job.

The long-term unemployed are represented in all age categories, educational levels, geographic regions, and income strata. The findings of Dr. Heidkamp, along with other scholars in this area, suggest that the long-term unemployed are at a very high risk of being pushed permanently out of the job market , and for reasons that are largely outside of their control.

It becomes a vicious cycle. In a cruel twist of cause and effect, the feelings of hopelessness, depression, and anxiety that the long-term unemployed feel can prevent them from putting their best foot forward even when an employer gives them an interview. They might feel desperate at times, and it shows in the interview. All of these things combined often mean that the person is on their own. Low inflation and full employment are the cornerstones of monetary policy for the modern central bank.

For instance, the U. Federal Reserve's monetary policy objectives are maximum employment, stable prices, and moderate long-term interest rates.

Since a Phillips Curve for a specific economy would show an explicit level of inflation for a specific rate of unemployment and vice versa, it should be possible to aim for a balance between desired levels of inflation and unemployment. However, in the late s, a group of economists who were staunch monetarists , led by Milton Friedman and Edmund Phelps , argued that the Phillips Curve does not apply over the long term.

If workers expect prices to rise, they will demand higher wages so that their real inflation-adjusted wages are constant. In a scenario wherein monetary or fiscal policies are adopted to lower unemployment below the natural rate, the resultant increase in demand will encourage firms and producers to raise prices even faster.

However, wage inflation and general price inflation continue to rise. Therefore, over the long-term, higher inflation would not benefit the economy through a lower rate of unemployment. By the same token, a lower rate of inflation should not inflict a cost on the economy through a higher rate of unemployment. Since inflation has no impact on the unemployment rate in the long term, the long-run Phillips curve morphs into a vertical line at the natural rate of unemployment.

Friedman's and Phelps' findings gave rise to the distinction between the short-run and long-run Phillips curves.

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Learn how to apply for unemployment benefits, workers’ compensation, welfare or temporary assistance, and other programs and services that can help if you lose your job. Short-term disability policies have a maximum benefit of two years.

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Long-term unemployment is 27 weeks or more. It affects million people, or % of the unemployed. It has devastating effects. More than half (56 percent) saw their income decline, compared to 42 percent of the short-term unemployed and 26 percent of those who kept their job.

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Historical experience suggests that low unemployment affects inflation in the short term but not the long term. In the long term, the velocity of money supply measures such as the MZM ("money zero maturity", representing cash and equivalent demand deposits) velocity is far more predictive of inflation than low unemployment. How inflation and unemployment are related The natural rate is the long-term unemployment rate that is observed once the effect of short-term cyclical factors has dissipated and wages have.

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The natural rate of unemployment (NAIRU) is the rate of unemployment arising from all sources except fluctuations in aggregate demand. Estimates of potential GDP are based on the long-term natural rate. But if the long-term unemployed share much the same characteristics as the short-term unemployed and are, thus, part of the pool of job-hunters that employers consider, then the upward pressure on wages and inflation won't occur until the long-term jobless rate falls to levels similar to short-term unemployment.