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Why Long-Term Unemployment Isn’t As Bad As You Think

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Here’s some good news for folks who’ve long been out of work

: that big gap on your resume may not be hurting your job search as much as you think. A new study by three economists finds that while callbacks do decrease during early months of unemployment, by eight months out of the workforce, the effect levels off and more months of unemployment don’t particularly matter.

The headline result: employers called and offered an interview to seven percent of “applicants” who had been unemployed for just one month, and that callback rate steadily dropped as unemployment lengthened, with resumes showing eight months of unemployment receiving callbacks for interviews only four percent of the time. Yet after eight months, the callback rate didn’t drop too much more, even as the researchers extended the length of unemployment all the way out to 36 months.

Furthermore, in parts of the country with high unemployment, callback rates didn’t vary nearly as much according to length of unemployment. The researchers surmise that employers understand that when the economy leaves a huge number of people out of work, a person being unemployed for a while isn’t nearly as telling a fact as it might be when jobs are more easily had.

The researchers also found—to their surprise—that employers were more likely to offer an interview to a person who had been unemployed for a few months than to a person currently employed. After talking to some hiring professionals, the researchers figured that this might have something to do with the perception that the currently employed aren’t serious job seekers, or that negotiating salary or start date is tougher when a person still has another job.


So what’s the take-away for unemployed job seekers?

Well, first, it’s probably a good idea to do more than submit your resume to online job ads. In the study, resumes solicited a callback for an interview only 4.7 percent of the time overall. And while 12.6 percent received any sort of callback (including those asking for more information), neither hit rate is much to write home about. Additionally, the researchers threw out results from 83 job ads after deeming them “questionable” because of evidence that the employer was engaging in dishonest or deceptive behavior.

Second, if you have been out of work for a while, it may be a good idea to indicate on your resume why you wound up jobless or how you’ve been spending your time. In order to construct their fictitious resumes, the researchers—and a legion of research assistants, to be sure—combed through about 1,200 real resumes in order to see how the unemployed typically present themselves. They found that 95 percent offered no explanation for the gap. Including a bit about how you’ve been working as a volunteer or pursuing additional training could make you stand out.

Finally, if you are approaching some big milestone of unemployment—like the one-year mark—try not to worry too much about the signal unemployment is sending, especially if you are in a high-employment pocket of the country. The impact on your job prospects might not be as bad as you think.

That said, the results of a single academic study should never be taken as gospel. In order to make the fictitious resumes comparable outside of unemployment length, the researchers created just one sort of worker profile—a young person without extensive job experience—and only applied for positions in sales, customer service, administrative support, and clerical work. Do the same trends hold across other industries and for more experienced workers? Or when people apply for jobs through channels other than online job postings? Unfortunately, we can’t tell from this study. Optimism is in order, but a cautious one.

If you’re facing long-term unemployment, don’t let the discouragement keep you from taking action, both with your finances and your job search. Here’s what you should do in the meantime as you look for a new opportunity.
1. Reduce your expenses as much as possible and get creative with how you approach it

Working with individual lenders and firms that you regularly pay a bill to, to see if you can arrange some type of forbearance program. It’s always worth a shot to ask, and even if there isn’t a federal-mandated payment pause, a local credit union or bank might be willing to work with you.

You might find that refinancing your mortgage or transferring lingering credit card debt to a balance-transfer card might reduce some of your monthly expenses by shaving hundreds of dollars off of your monthly interest rate payment. Perhaps you can downsize your home and move in with family or take on a part-time job to help get you by. Over the longer-term, moving to a new region where jobs in your industry are more readily available might be worth considering.

2. Stay on top of unemployment assistance

The long-term unemployment picture is growing increasingly complicated as firms, mostly among the restaurants and retailers that took that hardest hit from the pandemic, are echoing woes of being unable to find enough qualified workers.

McDonald’s said Thursday it plans to boost its hourly wages for both entry-level workers and managers to help retire and retain workers. Chipotle plans to woo workers with sign-on bonuses for apprentices and managers.

Republican lawmakers see ramped up unemployment benefits as to blame and 16 states are now moving to cut jobless aid, impacting some 1.9 million workers, according to the Washington Post. Treasury Secretary Janet Yellen, however, said a lack of child care and ongoing fear of getting COVID-19 exposure in the workplace could also be keeping potential workers at home.

The UI picture looks uncertain over the coming months, but generally speaking, you should find an extra $300 in your weekly check and those benefits should last through mid-September. If you’ve experienced any delays, follow up with your state unemployment office as soon as possible to determine what the hold up might be.

3. Don’t feel like you have to explain your job gap

One of the reasons why long-term unemployment poses significant challenges when those jobless workers try to seek a new position is because employers don’t always look kindly on a gap in their resume. Some labor market experts, however, are hoping the unprecedented nature of the pandemic and its public health risks will change that perception.

4. Think about how much income you need to sustain your lifestyle

Lifetime earnings are impacted by a long bout of unemployment, with many workers feeling desperate to take the first job that might be available to them, even if it means taking a significant pay cut from what they were used to paying.

Once you evaluate your budget, you might be able to get a good grasp on your survival number — that is, the amount of money you have to have coming in every month to cover essential expenses, such as food, your car payment or your mortgage payment. That might help you get a better idea of whether an opportunity that comes your way is worth taking — or worth passing up.

“I would encourage job seekers to continue applying, continue looking, but to have a real conversation with themselves about budget: What do they need, what is their minimum in terms of compensation or pay,” Konkel says. “Even in the best of times, it’s a very frustrating process to job hunt, and in a lot of situations we don’t want to take something and realize, ‘Oh, actually, that’s totally not going to work with your life if you cannot pay the rent with that job.’”

Individuals, however, might not feel comfortable about passing up on any opportunity if they need more income coming in. In those instances, switching to a better job once the opportunity presents itself, especially if the pay isn’t what you deserve when considering your experience, industry and location.

5. Seek out job-training opportunities

Whether you’re unemployed still or taking on a temporary opportunity to receive income, don’t underestimate the value of developing new skills and brushing up on the ones you’ve already developed. That could come by taking on a new project or temporary position or even utilizing online courses or classes that might help set you apart from other job applicants.

But that might be frustrating, particularly as lower-income individuals and less-educated workers have endured the brunt of coronavirus-induced job losses. They might not have the wherewithal to afford new training and might feel more resigned to taking on a position with less compensation than before

6. Leverage your professional network

Positions might not always be advertised online, meaning it might be worth reaching back out to individuals or colleagues whom you knew at previous positions. They could help you find a position that might be more tailored to your skills and compensation level.

7. Don’t be afraid to ask for help

As we saw a boom in demand for assistance from food banks and other charities, there’s no harm in seeking assistance, particularly given that this has been one of the most dramatic and sudden economic downturns in our history

Loyola’s Classen hopes the widespread nature of the pandemic might help to reduce that stigma, limiting the mental health toll of long-term unemployment.

This idea that, as a collective, we all got hit with the pandemic at the same time, so you feel more connected to people around you,There is something about the fact that we all went through it.


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