The following interview is with Ofer Sharone, the Mitsubishi Career Development Professor at MIT’s Sloan School of Management and founder of The Institute for Career Transitions. Long-term unemployment is becoming an epidemic in the American labor marketplace. In July 2014, long-term unemployment in the United States hit 2.02 percent, up from June 2014 but lower than the record high of 2.8 percent, reached in June 2013. Sharone has focused on strategies to help the long-term unemployed throughout his career and, in this interview, he sheds light on some of the significant challenges this sector of the population faces and discusses strategies higher education institutions can put into place to better support the long-term unemployed.
1. What are the most common characteristics of an individual considered to be “long-term unemployed”?
“Long-term unemployed” means someone who has been out of work for 27 or more weeks.
We’re very familiar with the characteristics of people who are unemployed. We know that education matters a lot, that people without a college degree have higher rates of unemployment. But it may be surprising when you think about long-term unemployment [and] how these rates work out differently. Once somebody is unemployed, their likelihood of becoming long-term unemployed are no longer if they have a college degree or even an advanced degree. Among the long-term unemployed, we see people getting stuck in this trap of being unemployed for over a year or, in some cases, multiple years. This includes very well-educated people with many years of work experience.
The main factor that can predict who will become long-term unemployed is age. There’s a real correlation between older workers and great likelihood of falling into long-term unemployed. With each decade, the likelihood of becoming long-term unemployed increases; it’s pretty linear. So 40 is more likely than 30, 50 is more likely than 40 and so on. The people that have it the hardest are [those over] 60.
2. What are the biggest challenges these individuals face when it comes to re-entering the labor market?
It’s a little bit puzzling from a policy perspective because our usual answer to everything is more training, more education, yet there’s a significant group [of long-term unemployed] that have plenty of degrees and experience. The barrier here is two-fold. Discrimination against people who are long-term unemployed is rampant. We can do audit studies where we send out identical resumes where the only thing that varies is the level of relevant experience and duration of unemployment. There you see that if someone applies for a job that has a lot of relevant experience but six months or more unemployment, it’s much less likely they’ll get a callback from an interview than someone with no relevant experience but three months of unemployment. That becomes the barrier because employers have a stigma against people who are unemployed and are not even bothering to look.
Another barrier is the economy and the lack of availability of good jobs. This is a problem not only for the long-term unemployed but for everybody. If you imagine there’s a preferential cue that employers want first and foremost to hire people that are short-term unemployed, then if there are only a few jobs, those are the only people that will get jobs. That’s another level of the problem.
The third dimension is the subject of experience for people who are long-term unemployed. For months and months or even years, [these people are] typically being rejected with silence. They don’t even get a response to their application. It takes a real toll emotionally and on their sense of identity and it makes it that much harder to engage in effective job searching, which really requires a lot of confidence.
3. How can higher education institutions help to support these individuals’ re-entry into the workforce?
There are some individuals for which more education, more training, is absolutely helpful and needed, but we shouldn’t think that’s the solution for everybody.
Institutions of higher education can definitely play a role in providing more education to those who need it. For those who already have the education and are long-term unemployed, institutions can provide a way to certify the currency of their skill. Imagine you’re a 60-year-old engineer and you’ve been out of work for eight months. Employers may start worrying, “Are you still up to date? Are you still able to engage with the latest technology?”
If there was a way to certify, by a legitimate recognized institution of higher education, that you possess those skills, that would serve an important signaling role to employers that this is a qualified candidate.
4. Is there space for helping people transition into new industries as well?
In some cases, people want to change careers but often don’t have the tools or the background to understand what the new career requires or what the new career would be like. There’s a need for more support for people who are transitioning careers. Institutions of higher education can step in as well. They typically have career offices for their students, and those offices could do a more proactive job for the alumni, and the wider community as well, in providing a place to help transition into new careers.
5. Is there anything you’d like to add about better supporting the long-term unemployed, and the role higher education institutions can play in this outcome?
In terms of long-term unemployment, we’re at record rates. Today, about one out of three unemployed persons is long-term unemployed. For all the improvements the labor market has made over the last few years, that number is still astronomically high by historical standards. We do need to keep our eye on the ball with this issue. Higher education can play different roles, and needs to think of new, creative ways to step in.
This interview has been edited for length.
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