http://www.latimes.com/business/la-fi-jobless11mar11,0,1675228.story?coll=la-home-headlines
THE NATION
Long-Term Jobless Find a Degree Just Isn't Working
By Nicholas Riccardi
Times Staff Writer
March 11, 2005
Dan Gillespie never thought he'd have to look so hard for work.
When the Seattle-area resident left the Air Force in 1980, he earned a
computer science degree and enjoyed 20 years of steady work. He saved
enough money to buy his wife's childhood home last year.
Three months later, he was laid off.
Gillespie, 53, hasn't found a job since. Even the corner store won't hire him. He and his wife sold the house last month.
"The computer jobs are gone," he said. "So what's next? We can't all move into gene splicing."
Long-term unemployment, defined as joblessness for six months or more,
is at record rates. But there's an additional twist: An unusually large
share of those chronically out of work are, like Gillespie, college
graduates.
The increasing inability of educated workers to
quickly return to the workforce reflects dramatic shifts in the
economy, experts say. Even as overall hiring is picking up and economic
growth remains strong, industries are transforming at a rapid pace as
they adjust to intense competition, technological change and other
pressures.
That means skilled jobs can quickly become
obsolete, while others are outsourced. Educated workers are
increasingly subject to the job insecurities and disruptions usually
plaguing blue-collar laborers, but various factors make it even harder
for some educated workers to get back into the workforce quickly.
Though a college education is still one of a worker's best assets, it's
no guarantee that a worker's skills will match demands of a shifting
job market.
The advantages of a college degree "are being
erased," said Marcus Courtenay, president of a branch of the
Communications Workers of America that represents technology employees
in the Seattle area. "The same thing that happened to non-
college-educated employees during the last recession is now happening
to college-educated employees."
Even with better-than-expected
job growth, 373,000 people with college degrees quit job hunting and
dropped out of the labor force last month, the Labor Department
reported Friday.
The number of long-term unemployed who are
college graduates has nearly tripled since the bursting of the tech
bubble in 2000, statistics show. Nearly 1 in 5 of the long-term jobless
are college graduates. If a degree holder loses a job, that worker is
now more likely than a high school dropout to be chronically unemployed.
That change is occurring as it is getting harder for all jobless to get back into the workforce.
Since the 2001 recession, about one-fifth of the unemployed have been
out of work for more than six months — and that proportion has steadily
crept up even as the unemployment rate has fallen. The percentage of
jobless who are chronically unemployed is even higher in California —
23.3% last month, versus 20.5% nationwide.
Even with the
national unemployment rate at a relatively low 5.4%, the share of those
out of work for more than six months is higher now than during the
early 1980s, when the jobless rate was in the double digits, analysts
say. The average length of unemployment is also higher now than at any
time other than the early 1980s.
Analysts cite several reasons for the growing vulnerability of educated workers to long-term joblessness.
For one, the number of college graduates has steadily risen over the decades. So it's natural that more will also lose work.
Tech workers, in particular, are victims of their successes during the
1990s, when many high-tech companies went on hiring binges and wages
soared.
"They basically stockpiled workers," said Mark Zandi,
an economist with Economy.com. Now those companies have gotten rid of
their overstock.
Higher pay commanded by college graduates also
is a factor. Wage differentials between those with and without college
degrees are at record highs. Those relatively well-paid professionals
may take longer to find work because they are more reluctant to accept
lower-paying work — although many ultimately do.
Educated
professionals also have assets, such as stocks and homes, that can help
tide them over. But digging into those assets can be painful, as Khaled
Amer learned.
Amer's consulting business hasn't had a client
since June. The electrical engineer hasn't found work in months, and as
chairman of an Orange County chapter of the Institute of Electrical and
Electronics Engineers, he says he knows of hundreds of others in
similar straits. His wife recently lost her accounting job when the
small manufacturing firm she worked for folded.
The couple are surviving by living off a home equity loan.
"That has been a saving grace," said Amer, 46.
But the Amers had been hoping their house in Irvine would finance their retirement.
The problems of long-term unemployment are even more pronounced for
older workers, for whom retirement issues loom large. The number of
long-term unemployed who were 45 or older doubled from 2000 to 2003.
That comes as studies show that the elderly are having to work longer
and put off retirement.
John Challenger, chief executive of
Chicago-based outplacement firm Challenger, Gray & Christmas, said
older workers often face age discrimination but may also face a tougher
time adjusting to the increasingly shifting skills needed in the
workplace.
"There are more and more specialists," Challenger
said. "And if there are more and more specialists in an information
economy, you get people whose skills aren't as portable as they used to
be."
Paul Kostek, an official with the IEEE, said employers had become pickier about what skills they wanted.
"When there's a lot of people out in the marketplace, companies can
afford to say we want someone truly with this experience, not someone
who just says, 'Well, I've taken a couple of classes in this area,' "
he said.
Getting retrained is also increasingly difficult.
Job-training funds have been steadily cut over the decades. Fields that
are booming, such as nursing, can require years of study that some
jobless cannot afford.
Virginia Johnson of San Jose lost her
job as a supply manager for a Silicon Valley firm in January 2003.
Except for a nine-month temporary stint, she's been out of work since
then. Among the many things she's had to put off is returning to school
to finish her business degree.
"Having this time off work would
have been great if I'd had the money to go to school," said Johnson,
whose unemployment insurance runs out next month.
It's getting
tougher to keep pace with the changing job market, analysts say. Two
economists at the Federal Reserve Bank of New York studied job losses
during the last three recessions and concluded that the most recent
one, in 2001, involved "structural" changes in industries rather than
the usual ups and downs of the business cycle.
That means that
certain jobs may never be replaced. For example, jobs designing
computer chips may vanish because of fundamental changes in chip design
or production or because the industry has shipped the jobs overseas,
experts say. Or businesses' efforts to boost productivity may mean that
computer programs shrink the number of loan officers needed to process
applications at a bank.
Erica Groshen, a co-author of the New
York Fed study, noted that though the United States manufactures less,
white-collar workers increasingly produce goods and services on
Information Age assembly lines.
"Instead of a room of auto workers," Groshen said, "you've got a room of insurance brokers."
Those white-collar assembly-line workers are the most vulnerable to
changes in the globalized economy, experts say. "These are the types of
people who are going to have their jobs under the threat of
outsourcing," said Sylvia Allegretto, an economist with the liberal
Economic Policy Institute in Washington.
Keith Michaelson feels
buffeted by those changes. He used to be a schoolteacher in rural
Michigan. When the local school district ran out of money, he studied
computers and worked at a Wisconsin-based technology company for 10
years until it was bought out and closed.
Michaelson moved to
Los Angeles to work as a computer troubleshooter. He survived one
layoff in 2001 and got a job at a local nonprofit. But he lost that
post last September and has been looking for work ever since.
Michaelson said he barely recognizes the job market nowadays. "The market changes a lot faster now than it used to," he said.
In the meantime, Michaelson is living in a West Los Angeles apartment
and surviving off his savings. "Sometimes I wonder, was it worth it for
me to go to college or not?" he said. "I'm 45 and not working, I don't
have much money put aside for retirement…. This is my retirement [I'm
spending], and I'll be working until I keel over."