The Improved Job Market & the Long-Term Unemployed

MS. DIANE REHM

10:06:56
Thanks for joining us. I'm Diane Rehm. The economy added nearly 250,000 jobs in January, but millions of Americans have been out of work for more than six months. Joining us in the studio to talk about prospects for the long-term unemployed: Stephen Rose of the Georgetown University Center on Education and the Workforce, Ingrid Schroeder of the Pew Charitable Trust and Derek Thompson of the Atlantic magazine. Joining us from a studio at Rutgers University, William Rodgers of the Heldrich Center for Workforce Development.

MS. DIANE REHM

10:07:43
I hope you'll join us, 800-433-8850. Send us your email to drshow@wamu.org. Feel free to send us a posting on Facebook or join us on Twitter. Good morning to all of you.

MS. INGRID SCHROEDER

10:08:02
Good morning.

PROF. STEPHEN ROSE

10:08:02
Good morning, Diane.

MR. DEREK THOMPSON

10:08:03
Good morning.

PROF. WILLIAM RODGERS III

10:08:04
Good morning.

REHM

10:08:04
Derek, if I could start with you, talk about how many people make up the long-term unemployed.

THOMPSON

10:08:14
Right. When we talk about the long-term unemployed -- and these are people who, like you said, have been out of work for six months or more -- we're talking about 5.5 million people. And to give you a sense of how much that is, that is basically the population of Minnesota. Most of these 5.5 million haven't just been out of work for six months. They've been out of work for more than a year. Four million of the 5.5 million have been out of work for more than a year, and these are what we might call the long, long-term unemployed.

THOMPSON

10:08:43
And to give you a sense of the scale of the crisis, since December 2007, the number of people who have been out of work between, say, two and six months has doubled. That's a tragedy. But the number of people who have been out of work six months or more, these 5.5 million unemployed, they have quadrupled since December 2007. And that, right now, even with the good job news that we're seeing week after week, is the true tragedy, I think, of the Great Recession.

REHM

10:09:11
Stephen Rose, what's different for the long-term jobless than what we've seen in the past?

ROSE

10:09:20
Well, basically, there's a thing called the rehiring rate, and the long-term unemployed always start out with a disadvantage. But, normally, there are much fewer of them. In this recession -- and recessions, in general, tend to be restructuring time. When economies are flush, employers are a little hesitant to fire people. But, when they have to fire people, then they use that time to really change their structure, to bring in some more equipment than to reorganize production.

ROSE

10:09:54
And, right now, what that's meant is, as Derek pointed out, just an explosion in this six-month period. I mean, Americans have always relied on an open labor market where people would find a way to get a job as they became more desperate. And as it's gotten longer and longer, the stigma of being long-term unemployed, the employers are looking at them and going, hmm, why are they long-term unemployed? Maybe there's something I'm not seeing in this resume. It looks awfully good, but if no one else is seeing it, this is it, they turn away.

REHM

10:10:33
And to you, Ingrid, I know that Pew recently did a study of the long-term unemployed. Tell me the basic findings.

SCHROEDER

10:10:45
Well, what we did is we looked into the people who have been unemployed for a year or longer. And what we found was that 31 percent of the unemployed had actually been jobless for a year or more. Like Derek said, 4 million people, which to give context to that number, that's the population -- a little bit less than the population of Oregon. So that gives you a little bit of perspective on it. We also took a little bit of a slice and a deeper dive into looking at who makes up this population, looking at the age, education, and race and ethnicity.

SCHROEDER

10:11:16
One of the interesting findings is when you look at age is that people who are a little bit older, 55 or older, although they are less likely to become unemployed in the first place, they are more likely to be unemployed for a year or longer. So they're really facing a struggle out there. A matter of fact, 42 percent of unemployed workers older than 55 have been out of work for a year or more, higher than any other age group. So it's a pretty significant finding for people who have lost their job if they're 55 or older.

REHM

10:11:44
And where are the unemployed?

SCHROEDER

10:11:47
Well, when you look at it geographically, it's pretty interesting. You find that down in the South Atlantic region and in the Pacific region -- so Pacific would be like Oregon and Washington and California, and South Atlantic is Florida and Georgia and North and South Carolina -- that they actually are facing a significant long-term unemployment problem.

REHM

10:12:07
And, finally, are -- as Stephen Rose implied, are they being laid off permanently?

SCHROEDER

10:12:16
This is actually a really interesting part of this particular recession. When you look at permanent versus temporary layoffs, this particular recession has been marred by more permanent layoffs and less temporary layoffs. Usually, during a recession, you see both of them increase. And during this recession, we actually saw temporary layoffs going down and permanent layoffs spiking quite sharply.

REHM

10:12:39
And now to you, Bill Rodgers, I know that among the hardest hit are minorities. Talk about why this is.

III

10:12:50
Sure. If I -- before I do that, I just want to add one other kind of historical perspective...

REHM

10:12:55
Sure.

III

10:12:55
...on this challenge that we're facing today, that we're going to be facing not just next year but even over the next five to 10 years, and that is the 42 percent that are long -- considered long-term unemployed, you know, that's a historical record since the Bureau of Labor Statistics has been calculating or estimating these numbers. Prior to this recession, 25 percent, roughly, was the record, and that was during the 1981-'82 recession in terms of the unemployed being long term. So we have just really, you know, shattered sort of past records.

REHM

10:13:30
All the records, yes.

III

10:13:32
And -- but with regards to, you know, other sort of disparate impacts that occur, it's very well known and documented that African-Americans, Latinos and, particularly within those group, the young men in those groups, have faced greater challenges with regards to, you know, getting into the labor market and staying in the labor market. And as we would then expect, and you do see in the data, that this translates into greater long-term unemployment.

III

10:14:03
So, for example, there's some estimates from the current population survey that blacks make up around 12 percent of the labor force. But from the standpoint of the sort of long-term unemployed, 27 weeks or more, they make up a fifth of that. Now, why is that? There's a whole set of reasons, ranging from education and training, ranging from being the youngest and the least skilled and thus you're at the lowest rungs of the totem pole or the job ladder.

III

10:14:32
Range -- also issues surround what we call spatial mismatch, that is where people live in communities where they don't -- where the jobs aren't plentiful, and they'd have to move or be able to commute to the suburbs, and they have challenges with transportation. And then, finally, you also have issues centering around ex-offenders. This is one group of Americans that really has been neglected in this conversation about joblessness and about the recession, that ex-offenders have much, much greater challenges with regards to getting -- regaining a toehold in the labor market.

REHM

10:15:06
And, Bill Rodgers, as I understand it, that Pew study showed that Latinos do not remain unemployed the way African-Americans and Asians do. Why do you believe that is?

III

10:15:24
Mm hmm. Well, there's a variety of reasons. You know, one is this -- what I just sort of mentioned, talking about the sort of the spatial aspect, a spatial mismatch. Some of the urban economists, urban researchers have found that Latinos, relative to African-Americans, are less racially segregated. And so in as much as we think space matters or the -- matters, that they'll have -- that they -- Latinos would have less of a challenge getting to those jobs.

III

10:15:50
Also, there's an immigrant component to, I think, some of those results, where any immigrants have fewer options or few opportunities and so may be willing to accept the lower wages that are offered in many of these jobs that have been created.

REHM

10:16:06
Are there stereotypes, though, applied to both blacks and Latinos?

III

10:16:14
Yes. There's a great deal of research that has been done by sociologists, economists that has found that, particularly young African-American men, unfortunately, by many employers, are at the lower rungs of sort of feelings of, you know, being punctual, feelings of having the right skills. And Latinos are sort of viewed as have -- as having more of those desirable sort of qualities that employers are looking for. So, particularly, this really affects young minorities.

III

10:16:48
And, actually, I did a study a number of years ago looking at the 1980s recession and recovery. And what I found there, it took the young men who had no more than 10 years of experience, young African-American men, it took them about a decade to catch up in terms of their earnings, power. So what we're -- so the challenge we're talking about today is not just a contemporary, you know, sort of static challenge for today. This is going to have repercussions for the future.

REHM

10:17:15
Do you agree with that, Stephen Rose?

ROSE

10:17:19
Certainly. I mean, what we see is that careers have a certain path. And oftentimes, it's very important to get started young, and then you build up specific skills and specific context in that industry. And when you're knocked off and when you're permanently displaced, all of that can disappear. I mean, you try to do it. But if that connection is broken, it's almost like you have to start at -- back at the beginning.

ROSE

10:17:49
And studies that I've done using longitudinal data that follow people over the years find that when people really get knocked off of the perch that they've been successful at, as Bill had said, 10 years later, they're just getting back to where they were. Now, admittedly, a career is one in which you're tending to have higher earnings as you age. So getting back to where you were doesn't mean getting back to where your compatriots were who stayed in those jobs.

ROSE

10:18:16
And I found that it could be as many as 15 years before they kind of return at a growth rate and that what we're talking about is, you know, losing approximately, on average, 20 percent of your earnings for 15 years.

REHM

10:18:30
Stephen Rose, he is research professor at Georgetown University Center on Education and the Workforce. Do join us, 800-433-8850.

REHM

10:20:04
And welcome back. Here with me in the studio: Stephen Rose of Georgetown University, Ingrid Schroeder of the Pew Fiscal Analysis Initiative and Derek Thompson at the Atlantic. On the line with us is William Rodgers. He is professor of public policy and chief economist at the Heldrich Center for Workforce Development at Rutgers University. Do join us, 800-433-8850. Send us your email to drshow@wamu.org. To you, Derek Thompson, Fed Chairman Ben Bernanke made a speech this week on unemployment. What did he say about the long-term jobless? What was your reaction?

THOMPSON

10:21:06
I thought it was interesting that Bernanke seemed to suggest that the unemployment rate of 8.3 percent actually understated the severity of the unemployment crisis. And this was really music to the ears of people who are looking to the Fed and also looking to Congress, if a little hopelessly, for them to do something more for the unemployed. It actually, in a weird paradoxical way, is good for the government to be overly or appropriately pessimistic...

REHM

10:21:37
Pessimistic.

THOMPSON

10:21:38
...about the job situation because it increases the incentive to do something about it, and the last thing that we want out of Washington, especially now that is seems like we're turning a corner, especially in the job market, is for them to relax and say, oh, the job market is -- it's recovering on its own. It doesn't need our help anymore. It does need our help. It still needs low interest rates and spending.

REHM

10:21:59
Bill Rodgers, there are many people who would say, why hasn't the government done more? What can it do more of to help deal with this problem?

III

10:22:15
Well, that's a question that we need a lot more time than we have, but let me take a stab at it. I mean, number one, it's -- as I learned when I worked for Secretary Herman, as our chief economist, our main economic adviser, number one, it's how you talk about the economy, that, as your guest -- your other guest just mentioned, that the government, the administration, Congress and particularly Ben Bernanke, they have to provide that message that says, you know, we are -- have turned the corner.

III

10:22:48
Yes. We've had 3.7 million new jobs since February of 2010. However, that is not enough. And this is important, from my experiences, 'cause it impacts consumer confidence, and I'm -- I am one of those folks who does believe that, you know, one of the main things that's got to happen for this economy to turn around for folks at the lower part or middle parts of the job ladder to get pulled back in, we have to see improved or stronger personal consumption.

III

10:23:16
The other piece that is quite related to that is the housing market. You know, there are efforts by the administration and by Congress, but these efforts probably need to be ramped up and stepped up a bit more. And then there's other efforts that are focused on, like on the long-term unemployed. The president has an initiative that was trying to make sure that we do not discriminate against the unemployed.

III

10:23:40
As Stephen said, there are perceptions and attitudes that emerge by employers and by the public. And in particular, I am -- I agree with the previous statement that this conversation -- and I thank you for having this conversation. These conversations have to continue because there is a growing and a pervasive, you know, sort of undercurrent that is out there, that people who are long-term unemployed are lazy.

III

10:24:05
And that's -- you know, we've been extending unemployment insurance benefits for, you know, 12, 18 months, if not longer, and we still need to do that.

REHM

10:24:16
All right.

III

10:24:17
We also need to extend the payroll tax cut through the remainder of this year. So that's just a quick menu.

REHM

10:24:22
Lots to be done. Yes.

III

10:24:25
Unfortunately, there's no silver bullet here. That's the (word?).

REHM

10:24:26
I understand. Ingrid Schroeder, just before the break, Stephen Rose was talking about age. And I wonder what you learned about age and education regarding the long-term jobless.

SCHROEDER

10:24:45
Well, when you look at education, it's actually a pretty interesting story. As one might guess, people who have more education are less likely to become unemployed in the first place. But when we looked at this during the fourth quarter of last year, it turned out that, no matter what your education level was, you were about the same likelihood to stay unemployed for a year or longer.

SCHROEDER

10:25:06
So whether you had a high school diploma or a graduate degree, it didn't really matter. Once you were unemployed, somewhere between 35 and 37 percent of people in your cohort will be -- stayed unemployed for a year or more, which sort of is the mixed signal there that, you know, education obviously does matter. But once you're unemployed, there's -- it's a difficult time for everyone.

REHM

10:25:27
You know, it's fascinating, Stephen Rose, because age and education would normally indicate experience and knowledge, and yet it seems to be working in the opposite direction.

ROSE

10:25:45
Well, again, it goes to this notion of career fit. That is the reason why we have careers is that you build up all of these connections in your career. And when age -- when you lose that and you're approaching retirement and, you know, people are wondering how much should I invest in this worker, when, you know -- we have a lot people that change jobs, but, nonetheless, employers, when they start looking out, expect their employees to stay many years. And so they are thinking the long term.

ROSE

10:26:18
So when an older person gets -- loses that connection and they can't easily make a transition in the same field, it's very hard for them to go laterally at a fairly high position in another job. It happens, but it's rare.

REHM

10:26:33
Derek.

THOMPSON

10:26:34
It's interesting because most of the jobs that are coming back, at least, a lot of the jobs that are coming back, are extremely low paying. And what that means is that if you're out of work and you have a master's degree or a Ph.D. degree, that doesn't help you get a job that only pays $30- or $40,000 a year. It's interesting. The Atlantic did this experiment last year. We asked all of our readers to send in their stories about unemployment.

THOMPSON

10:26:58
And we got, I think, about 10 different responses from people with master's or Ph.D. degrees, saying, I am withholding from my application the fact that I have a master's because I'm concerned...

REHM

10:27:10
Wow.

THOMPSON

10:27:11
...right -- because I'm concerned the employer is going to say, if this is a guy with 14 years of education or 16 years of education, there is no way he's going to keep this job that only pays $35,000 a year. He's going to leave the second he finds something better. We're going to hire someone with maybe only associate degree. They're a better fit.

THOMPSON

10:27:30
So even if the demand among the long-term unemployed includes a lot of people that have Ph.D. or master's degrees -- although it should be said that these people have a lower overall rate of unemployment -- since the jobs that are coming back aren't receptive to these sort of degrees, most of them, they're less likely to find that perfect fit.

REHM

10:27:48
And just to follow up on that, to you, Bill Rodgers. The National Federation of Independent Business did a survey, saying that more than a third of entrepreneurs said they had tried to hire someone in the last several months but had been unable to find candidates with "appropriate skills." But nobody is saying exactly what those appropriate skills are. How can one define that?

III

10:28:30
Yeah. Well, before I try to answer that, let me react to this previous comment that -- just be blunt about it. With many of employers, you know, that older workers are, in their eyes, too expensive, all right, that they're viewed as being too expensive, that if I do have a position, I'm going to possibly put someone in there who's younger, who, by the end of the day, I can pay less. But if employers have a broader view of what this potential worker or individual older worker can bring to them, that I think it turns into a win-win situation for them.

III

10:29:05
And I think what's happened with this great recession and this, what I call pothole recovery or tale of two cities for many people, is that it's causing many folks to have -- to press the reset button. So, you know, instead of focusing so much on cost and the bottom line that if -- as Secretary Bob Rice used to say, or still says at many times, is that we need to treat our individuals as -- our workers as assets to be groomed, that those people might end up wanting to stay and get back on a career ladder.

REHM

10:29:35
But...

III

10:29:36
And to your question or this thing about, you know, employers -- and I think there's been a variety of research that has been done. When you ask employers, what skills do you need, many times they go back to you, they are not sure. But there has been other work that talks to school guidance counselors, to educators and just general sort of people who look into the future, what are the skills demanded. And it's all about we're in the services.

III

10:30:03
We're into information. We're into persuasion. So it's team skills. It's skills about how well you can -- you communicate. It is, you know, sort of the ability to smile. And maybe for some of the long-term unemployed, we may say this isn't a big issue...

REHM

10:30:20
All right.

III

10:30:20
But I know for -- again, for ex-offenders, for that population I've worked with and studied, that's a big issue, and trying to -- relearning how to smile.

REHM

10:30:26
Interesting. Stephen Rose, what are the retraining options for the long-term unemployed?

ROSE

10:30:35
Well, very few is the short answer.

REHM

10:30:39
Yeah. Yeah.

ROSE

10:30:40
I mean, community colleges are doing now more and more, and for-profit schools are obviously filling a gap and have been growing very fast, these vocational and business schools. They rely very heavily on government-subsidized loans and Pell Grants. And there's a -- we want to make sure that we get our money's worth. Some people have abused this and really encouraged people to take on loans without programs that they have.

ROSE

10:31:08
But in general, for instance, if we compare ourselves to other advanced industrial countries, we spend remarkably little on retraining, about two-tenths of 1 percent of GDP, where other countries spend as much as 1 percent of GDP. Overall, on labor market policies, we spend less than one-half of 1 percent of GDP, and other European countries spend 2 percent.

REHM

10:31:33
It doesn't make sense.

ROSE

10:31:35
Well, it's kind of been this American bravado of you can do it on your own, and government is not there for you. And we'll just let you succeed, but we'll also let you fail.

REHM

10:31:46
And if you fail, it's because you're lazy.

ROSE

10:31:50
Exactly. Blame the victim.

REHM

10:31:51
Blame the victim.

III

10:31:53
And that is, as I said, an undercurrent that's right out there that started back in the early '80s, and it's sitting there. And this -- and people are going to be using the fact that we can't afford these expenditures as a way to basically push us down that path that Stephen is talking about. And what's very disturbing, it's beyond just education, which is what we call human capital. It's also -- we've seen a slowdown.

III

10:32:18
Whenever we've seen a slowdown in our investment, it means social capital, so human capital, social capital. Social capital is investing in parks, investing in libraries, investing in social safety nets. Some of the research that I've done -- we've done that. We've seen that slowdown in the 1970s, in the 1980s. We've seen growing income inequality, and that's what we're seeing today.

REHM

10:32:39
William Rodgers at Rutgers University. We're going to open the phones very shortly. And you're listening to "The Diane Rehm Show." Derek Thompson, the one thing we haven't talked about is the emotional aspect of being among those who are unemployed for the long term. It's got to be so difficult.

THOMPSON

10:33:08
Right. In the project that The Atlantic did that solicited responses from the long-term unemployed, we probably got three big themes to talk about. The first was that a lot of people said looking for a job is a full-time job. There are so many different sorts of industries that you have to apply to and so few jobs that -- looking for the right fit, applying and sending out your resumes to all your possible contacts takes a lot of your time.

THOMPSON

10:33:37
The second theme was how misunderstood the unemployed felt. There is this sense, I think, that's sort of pervasive and hard to put your finger on it, that the long-term unemployed are lazy. How are you out of work for six months? How are you out of work for more than a year? There must be laziness, and, you know, combating that stigma is extremely difficult. And, finally, in addition to this quasi-political stigma, there's also an emotional and social stigma, this idea that, you know, you make so many friends in your career at the place that you work. You like the -- you like your colleagues.

THOMPSON

10:34:10
This is, you know, who you go out with after the day ends. If you're removed from this experience for six months, one year, even your old friends who are still working and moving through their careers no longer have this point of contact with you where they can talk about work. And it seems like a small thing. But, when you're talking about how people feel in their day-to-day life when they can't find work, they need all the emotional uplift they can get. And if they find they're losing their connections with their friends, that's, I think, an under-ratedly (sic) difficult thing to overcome.

REHM

10:34:44
Stephen Rose, has anyone done a connection between the long-term unemployed and those who are losing their homes?

ROSE

10:34:59
Obviously, it's a high number. I mean...

REHM

10:35:01
It's got to be.

ROSE

10:35:02
Yes.

REHM

10:35:03
It's got to be.

ROSE

10:35:04
I mean, you -- we are in this housing crisis of unprecedented proportions because of the crazy run-up and all the crazy practices that were used in enticing people. I mean, the worst offenses were what are called affinity housing broker -- mortgage brokers, who went to people, and they showed up on their doorstep and they said, you know, you don't have a mortgage now, but, you know, for virtually no money, we can fix that roof. We can do this.

ROSE

10:35:35
They put them -- and as we know, the liar loans and the fact that so many people were put in these situations. And, you know, it just rebounds in so many bad ways.

REHM

10:35:44
I want to ask one thing of all of you before we go to a break and begin taking calls. Realistically, are many of these jobs gone for good, Stephen Rose?

ROSE

10:36:03
Of course, yes.

REHM

10:36:05
Yes.

ROSE

10:36:05
They just are. I mean, you really are going to have to retool, and you're going to have to find that new niche.

REHM

10:36:11
And how often in our society has this kind of turnover happened when you simply leave behind some workers?

ROSE

10:36:24
It's always happened. You know, economists have a fancy term that sounds nice: creative destruction. What's really happened is how many, as Bill Rodgers cited early, the -- in 1982, only 25 percent of the unemployed were the six months-plus unemployed, and now we're at nearly 40 percent. I mean, this is just unprecedented, and so the numbers are just quite large.

REHM

10:36:49
Ingrid.

SCHROEDER

10:36:50
The long-term unemployment rate for those -- for a year or more is actually at historic high as well, rates that we haven't seen since the aftermath of World War II. However, what I would like to point out is that unemployment is a lagging indicator. So that's fancy speak for saying that, as the economy starts to recover, unemployment takes a little longer to catch up with that. So it's not all depressing. People will get jobs. It's just it takes a little longer, as the economy recovers, for those jobs to come back.

REHM

10:37:21
I hope you're right. Ingrid Schroeder. She's director of the Pew Fiscal Analysis Initiative. We're going to take a short break here. And when we come back, it's your turn. We'll take your calls, your email, your postings on Facebook and your tweets.

REHM

10:40:04
And it's time to open the phones. First, we'll go to Choctaw, Ariz. (sic) Good morning, Barbara. You're on the air.

BARBARA

10:40:14
Good morning, Diane. I love your program...

REHM

10:40:15
Thank you.

BARBARA

10:40:15
...and I think this is a very important topic. And...

REHM

10:40:17
So do I.

BARBARA

10:40:19
...your guests are covering it in more detail and in more intelligent detail than I've heard in a long time. I'm in Choctaw, Ark., not Arizona, by the way. And the last time I worked was for the U.S. Census in 2009 and 2010. Those jobs were counted as jobs, but they were very low wage, and they were terminal. I knew I wasn't going to have a job after that project was finished, and they made it very clear that there were no jobs down the road. It would just be, you know, another resume item for me to go out some place else and look for work elsewhere.

BARBARA

10:40:52
I am calling because I just get annoyed when the job statistics are quoted and they're fairytales. There are jobs, and then there are jobs. And I would love it if we started reporting what the jobs pay, how long the jobs are going to last and whether there is any opportunity for advancement because so many people who are looking for work maybe, at this point, are going to take whatever they can get. But long term, I don't think our country is in very good shape, and I -- statistics that we hear are telling us the full story.

REHM

10:41:25
All right. OK. Stephen Rose.

ROSE

10:41:33
Looking at the new jobs, what we see is that, you know, there is actually a lot of hiring going on, normally. That is up to a million jobs. People are leaving and hiring in a week in normal situations. And now we still have those million leaving, but we only have about 700,000-a-week hiring. So we have this notion of there's five unemployed for every opening. There's a thing called the jobs openings and labor turnover survey that we do. What we found, more surprisingly, is that there are a limited number of jobs open for high-end jobs.

ROSE

10:42:09
And the middle jobs have been really hit very hard, that what we've seen in this recession is, amongst the new jobs, what aren't there are the middle jobs. So if you have an advanced degree and you can find those openings, you have a chance. But for people with moderate levels of education, the stepping stone career jobs are very few, and, as the caller said, there -- a large number of these low-end jobs that are rotating constantly.

REHM

10:42:37
Derek Thompson.

SCHROEDER

10:42:38
That's exactly right. Steve's exactly right. What you're really seeing is sort of two different economies that are coming out of the great recession, one in which there is healthy-ish (sic) hiring for college degree holders who haven't been out of work for more than six months. When we did a study of the 1.6 million jobs added in 2011, the category with the most hirings was for white-collar workers. But then there's the second economy where there are also a lot of jobs being added in industries that just don't pay very much.

THOMPSON

10:43:08
The next fastest-growing sectors include retail, health and your home-care aids, education, manufacturing, even a little bit of construction. These are jobs that don't pay very well. So it really is a sort of -- it's a two-speed recovery, one for the college degree earners and one for the low-wage earners.

REHM

10:43:27
And here's an email on that very subject from Debra in Brighton, Mass., who says, "I've seen a trend of employers creating part-time jobs as a way to avoid paying benefits. Is this exploiting the level of unemployment?" Bill Rogers.

III

10:43:52
Yeah. That's a great insight. And what we do see typically in a recovery -- and this, unfortunately, is our third jobless recovery in our sort of second, if you will, two-speed economy that Derek's calling it, or I call it the pothole economy. And that's how employers will first do two things because of the uncertainty or because of the lack of consumption by individuals, is that they'll start to increase hours of their current workers. So they're demanding those people to be more productive, and some people can argue that that's an exploitation.

III

10:44:29
And then -- but then they also will start to, instead of using full-time workers, from the standpoint of maximizing profits or minimizing costs, right, they're going to go and call up Kelly Associates or other temp agencies in their communities and hire those individuals first. Now, the good news is that as we progress into the sort of 3.7 million new private-sector jobs since February 2010, the share of those jobs that have been growing has -- that are -- in the temp industry has -- that share has fallen. So that's good news.

III

10:45:02
And the other good news seem to be out of this recent jobs report that many of the -- many people thought that the growth in December was because of sort of seasonal -- and I know there are seasonal adjustments, so it could have been seasonally sort of unexpected growth in a holiday type of hiring. But the fact that we had a second consecutive month of job creation in excess of 200,000, you know, that's suggestive that at least the quantity story is starting to improve.

III

10:45:30
But the previous caller from Arkansas, you know, I think she also makes a great point. And there has been some research, but it's not done actively or formally by the government. Or I think it's the National Employment Law Project. They actually have estimated by industry and looked at sort of the average wages of where the jobs are being created. And it's also consistent with what Derek was saying, that these average -- the job growth in these industries tend to be in lower -- at lower industries or industry pay below average wages.

REHM

10:46:00
All right. To Dallas, Texas, good morning, Richard. Let's try that again. Richard, are you there?

RICHARD

10:46:10
Yes. Can you hear me?

REHM

10:46:11
Certainly can. Go right ahead, sir.

RICHARD

10:46:14
Yeah. Thank you for having me on. I've been listening very keenly here. They've -- the speakers here brought up some of the things that I have been concerned with, but one of the questions I had was I have an advanced degree, and I have been looking -- and the jobs I applied for -- first of all in the Dallas market, we have a large IT market here, so there are a lot of IT jobs. And many of them list, the ones that I apply for anyway, advanced degree preferred.

RICHARD

10:46:45
And I have applied for the last year-and-a-half for literally hundreds of positions, and not only do I not get any interviews, you know, I can't get anyone to even talk to me. And I'm, like, surprised because I hear all these employers complaining that they can't find qualified people, and yet I have most everything they want on their list of requirements, including an advanced degree, and yet I can't even get them to talk to me.

REHM

10:47:13
And that is an indication of how many people there are, like Richard, with advanced degrees applying for the same jobs, Derek.

THOMPSON

10:47:26
That's exactly right. And, you know, like Ingrid's research showed, you know, in the group of people who are long, long-term unemployed, out of work for more than a year, it -- the sad reality is that it doesn't appear from the research like having a advanced degree, having a master's degree carries any sort of advantage. You have, basically, about -- between 30 and 38 percent of each of these buckets, whether it's less than a high school degree, more than a high school degree, advanced degree, they're all long, long-term unemployed.

THOMPSON

10:48:02
And, you know, this is one of the central tragedies, is that there's an American deal that's sort of implicit in the American dream, that if you go to school longer, you will have a better chance to be employed. The more you learn, the more you earn. And it just doesn't seem to be coming true for these people out of work for more than a year.

REHM

10:48:18
All right. To Fayetteville, N.C., good morning, Dean. Thanks for joining us.

DEAN

10:48:24
Good morning, Diane. Thank you for taking my call.

REHM

10:48:27
Surely.

DEAN

10:48:29
My comment has to do with minorities in the workforce today and specifically African-American men. I believe that the most employed people today are white men, white women and then minority women and then African-American men. Black men are seen as a little more aggressive in the workforce, so I think that they are probably let go first. And then when the hiring prospects are to return back to work -- come along for a corporation, they hire Hispanics because they are bilingual.

DEAN

10:49:08
And I think employees see an advantage in bilinguals just because they're bilingual, and maybe not necessarily as qualified. I'm not being prejudiced about it. I'm just saying that I believe that is what is happening in our workforce today.

REHM

10:49:26
Is that the case, Bill Rodgers, that bilingual skills help an employee or prospective employee to gain a job?

III

10:49:38
Yes. And -- you know, and it really also -- but it depends on where you live. I mean, if you were in the New Jersey area, New York City area, where you're already seeing what America's going to look like racially in the next 10 to 20 years, you know, those -- having those additional skills of being able to speak Spanish, Chinese, those matter because we have a growing number of consumers that -- consumer markets that transcend to the traditional...

REHM

10:50:09
Interesting.

III

10:50:09
...American markets. So it's a very important skill. But I think the other piece that I hear in Dean's comment is that -- and I didn't mention earlier when I talked about the myriad of challenges that African-Americans face is, one, that discrimination still is an unfortunate feature or experience that African-American men and any -- and African-American women also have.

III

10:50:34
What's -- what I think is another sort of creating challenge for African-Americans and women is that, as we saw private sector job creation return starting in February 2010, that's when we also begin to see the cuts in the public sector.

REHM

10:50:51
All right. And...

III

10:50:52
Why is this -- why -- and why is this important? Well, public sector has -- was an area that minorities and women got their initial toehold into the middle class. That was a job or a set of occupations that were viewed as being fair, providing good compensation, not only decent wages, but also a pension and health care. And so many minorities -- there's been almost 500,000 public sector jobs that have been cut since February 2010 in, predominantly, the state and local levels.

III

10:51:20
So this is going to be another sort of drag on the recovery that could then also put minorities in a disadvantage of being able to sort of prosper as the broader economy continues to grow.

REHM

10:51:34
And now to Lansing, Mich. Good morning, Jessica. Thanks for joining us.

JESSICA

10:51:41
Good morning, Diane. Thanks for taking my call.

REHM

10:51:42
Sure.

JESSICA

10:51:43
I work for a large retailer in the Lansing, Mich. area. And, you know, we're in an area that's got really tough economy. And I know there's a certain stigma around working in retail, but I'm actually having quite a hard time finding quality people just because of an overall lack of interview skills and overall lack of ability to present themselves while in a work setting and interview setting. I think this is speaking more volumes to -- I have jobs. And I can't fill them because I can't find the right people.

JESSICA

10:52:17
I think we need to have more training and jobs and development around interviewing skills, and let's invest into that because that will help my business grow if I can find better people.

REHM

10:52:28
Derek.

THOMPSON

10:52:29
It's interesting. In The Atlantic's Project that asked people to give their testimonials about unemployment, we actually heard from a lot of employers who said, you know, we are finding it difficult to find the right people. And they mentioned interview skills as being one of the criteria that they were finding lacking. You know, it's interesting because unemployment and desperation in unemployment isn't spread across the U.S. perfectly, evenly like butter.

THOMPSON

10:52:53
I mean that it's really spotty, and it's spiky. And you'll find, you know, a higher share of long-term unemployed potentially in the South, in the Sun Belt states that's been hurt by the housing crisis the worst and, you know, this where -- this might be where most people are stuck. And then, you know, in places like Michigan, you might have a lot of these people who had moved out in the last few years because they thought they might be able to find opportunities elsewhere. A geographical issue, it's spiky and tough to predict before here.

REHM

10:53:20
Derek Thompson at The Atlantic magazine. And you're listening to "The Diane Rehm Show." You know, lately there's been lots of talk about food stamps, with Newt Gingrich calling President Obama the food stamp president. What are your thoughts on that, Stephen Rose?

ROSE

10:53:43
Well, I think, this is just really him blaming the victim. I mean, what we know is this has been a really hard crisis. We've been discussing for the last -- nearly an hour, about all of this long-term unemployed. And as I noted earlier, we spent less than other countries on helping people who are displaced like this. And the notion that what little we spend should then be held against President Obama, it's kind of morally repugnant. I mean, to say that people who need food stamps -- and it's not any policy decisions that Obama has been doing. This is just qualifications.

ROSE

10:54:20
It has -- is your income less than a certain amount of money and we'll help you. What is the alternative that Gingrich wants? That they should sit and starve in the streets, or they should beg more? I find it pretty distressing that he thinks that he can get away and say this so publicly.

REHM

10:54:38
Ingrid Schroeder.

SCHROEDER

10:54:40
When you look at sort of how -- what spending is like on unemployment or any of the other programs, I mean, these are tough policy decisions, but particularly at time where we look at our debt and look at what's going on with just general government spendings. So, you know, an anneal position of any person in Congress or the president trying to figure out how to parse out this money, it's tough, particularly during the time of fiscal crisis.

REHM

10:55:03
And one last question, Derek Thompson, this idea of extending unemployment benefits, what are the realities, what are the possibilities?

THOMPSON

10:55:17
Extending unemployment benefits, in my view, is not only economically necessary, it's also fair and moral and actually probably good for the general economy. There's this idea, which I tend to agree with, that when you have an economy that's acting subpar, you want to put money in the hands of people who are mostly likely to spend it, people who are cash needy, cash poor. These people are the unemployed.

THOMPSON

10:55:45
If we want to spend money wisely and get it circulated around the economy and juice up demanding areas that'll increase employment there, we want to give unemployed people money and get them spending it.

REHM

10:55:58
And, realistically, what do you think the prospects are on Capitol Hill?

THOMPSON

10:56:02
I think the prospects on Capitol Hill is that there will be no deal until 11:59 on the proverbial -- and 59 seconds on the proverbial clock. And then at the very last minute, they'll strike some deal. But once, you know, to dip into politics...

REHM

10:56:15
Before the election?

THOMPSON

10:56:17
Oh, no, before the end of the month. Yeah, before they come up for...

REHM

10:56:20
Before the end of the month?

THOMPSON

10:56:21
...renewal. Yeah. It's in their public interest, I think, to wait until the last minute and show that they're putting a fight against the president.

REHM

10:56:29
Derek Thompson of The Atlantic magazine, Ingrid Schroeder of the Pew Fiscal Analysis Initiative, Stephen Rose of Georgetown University, William Rogers of Rutgers University. Thank you all so much for being with us.

III

10:56:50
Thank you. It's our pleasure.

SCHROEDER

10:56:50
Thank you.

THOMPSON

10:56:50
Our pleasure.

REHM

10:56:51
And thanks for listening, all. I'm Diane Rehm.

ANNOUNCER

10:56:55
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