Long-term jobless begin to find work

WASHINGTON — Americans who have been hunting for employment for more than six months are finally catching a break.

Among them is Tracey Mutz, who landed a job this month as director of project management for 1st Money Center Inc. after being out of work since March 2013. “It was terrible,” said Mutz, 52. “I wasn’t getting any responses.”

Now, she’s “happy” with the position she found. The specialty financing company is located a mile from her home in Hurst, Texas, and has “a great office environment.”

Mutz isn’t alone in experiencing better times. Faced with a shrinking pool of available workers and incipient wage pressures, companies are starting to give the longer-term unemployed a second look. The number of Americans without a job for 27 weeks or more fell to 3.37 million in May from 4.35 million a year earlier, though some of that drop reflects people leaving the workforce.

Their improving prospects are good news for Federal Reserve Chairwoman Janet Yellen and her colleagues as they seek to bring down unemployment without fanning too much inflation. If employers opt to widen their applicant pool rather than raise pay, that will allow the Fed to keep short-term interest rates near zero for longer.

“It’s about to cross the precipice, where you are seeing the long-term unemployed being on an equal footing with the short-term,” said Jeffrey Joerres, executive chairman of Milwaukee-based staffing company ManpowerGroup, which has more than 400,000 clients worldwide.

At her press conference after this week’s Fed meeting, Yellen said she sees “compensation growth, broadly speaking, as having been very well-contained,” running “around 2 percent” by most measures. “As the labor market begins to tighten, we will see wage growth pick up some.”

Research by Deutsche Bank Securities economists Peter Hooper and Matthew Luzzetti suggests that companies do start to broaden their search for job candidates as the pool of short-term unemployed shrinks and the pressure to raise salaries expands. They found that wage increases remained muted in U.S. states that experienced declines in short-term joblessness so long as the long-term total was still high.

A prime example: New York. The state’s short-term unemployment rate — people out of work less than 15 weeks — is back to levels that prevailed prior to the last recession, yet wage increases still lag well behind, the Deutsche Bank economists found.

“We are seeing a dramatic shift in the interest of certain employers” in hiring the long-term jobless, said New York Deputy Secretary for Civil Rights Alphonso David. “It is encouraging. We know the demand is there. We also know the supply is there. Our goal is to connect the two.”

The state has been developing plans to provide or ensure skills training for people without work, along with a “comprehensive outreach strategy” that includes e-mailing local business people to promote their hiring and meeting with local Chambers of Commerce. David is leading the effort on behalf of Gov. Andrew Cuomo.

President Barack Obama also has stepped up efforts to help the long-term unemployed, ordering federal agencies to end hiring practices that put those would-be workers at a disadvantage and establishing a $150 million grant program for organizations that help them find jobs.

Obama acted after Congress failed to extend emergency unemployment benefits at the end of last year. The loss of those benefits probably prompted some Americans with long spells of joblessness to drop out of the labor force, economists say.

Even with the tighter labor market, employers still are picky about filling positions, according to an index compiled for Dice Holdings by University of Chicago professor Steven Davis. The mean duration of U.S. job vacancies rose to almost 24 working days in April, the most since the measure began in 2001. The peak for the previous expansion was in July 2007, when the jobless rate was 4.7 percent compared with 6.3 percent now.

Many businesses are shying away from hiring people out of work for long spells because they lack skills the firms want, said Michael Durney, chief executive officer of New York-based Dice, which provides specialized websites to match employers with potential employees in industries such as technology and financial services.

Skills mismatch is a problem, including in the information-technology and accounting fields, agreed Bob Funk, chief executive officer of Express Employment Professionals, the nation’s largest closely held staffing company.

Still, “we think we can find jobs for those who have experience in their background,” including people out of work for a while, “if they’re willing to retrain themselves,” he said. The Oklahoma City-based company had almost 19,000 positions open earlier this month.

Dave Holland from Columbus, Ohio, decided last summer to take a course to gain certification as a project manager. Laid off from his job as technical manager at JPMorgan Chase in October 2012, the 58-year-old found he “wasn’t getting any traction” in searching for work.

The class “was the most grueling test I’ve ever taken,” he said, and led to consulting work later in the year. In April, he landed a full-time IT post at a major health-care company making more money than he had at JPMorgan with better benefits.

The small- and medium-sized companies Express deals with “are starting to lighten up a bit,” Funk said. “They’re willing to take the risk for more employees because they think that things are starting to stabilize a little.”

To increase the supply of workers it has on hand to meet that demand, Express is “going into its old files,” contacting people who applied to the company in the past but aren’t currently on its rolls, he said. Its Oklahoma City office got in touch with about 5,200 people who met that criterion earlier this month and reactivated about 300.

“We have to be proactive,” Funk said.

Earlier in the recovery, companies had gotten used to filling open positions easily because the supply of labor was plentiful, ManpowerGroup’s Joerres said. Now, that’s changing.

“We’re telling clients you just can’t call us and say, ‘I need 20 people tomorrow,’” he said.

As the job market tightens and wages start to rise, Americans out of work for a while will “become more appealing,” and companies “might be able to get those people for less,” he said.

Employment counselor Abby Kohut senses things are improving. Known as “Absolutely Abby” online, the veteran recruiter has spent almost two years traveling around the country speaking to out-of-work Americans about how to increase their chances of getting a job.

“In the past, say, six months, it’s definitely picked up,” she said. “More people are thanking me and telling me they landed a new position.”

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