Why is It Hard to Land a Well-Paid Job After Losing One?

Yves here. I sometimes run posts from orthodox economic sites as exercise in critical thinking, or to remind readers of what passes for research in economics, since economic work is treated with undue reverence in policy circles.

Here, the issue at hand is why people who have well paid jobs take a while to land another one, of course assuming that they manage to land well. The analysis by the author is not bad, save its rather frightening level of abstraction. But take a good look at his summary of conventional assumptions about how job-finding and wage-setting for the unemployed is supposed to work.

There is simply not enough acknowledgement of the structure of work, that highly paid roles almost without exception involve highly specialized skills. If you cannot find someone who wants those particular skills, you then are forced to look for work that draws on your more general skills (selling, managing people, being a data jockey, manual labor) where you are less differentiated from other candidates and where the prevailing pay levels are lower. Studies like this also fail to consider that demand for these higher-paid jobs can drop for protracted periods of time. For instance, being a derrickhand in the late 1970s oil boom was one of the highest paid jobs in the US. A colleague with a college degree made more than I did as a new associate (with an MBA) at Goldman. When the oil market went splat, many of those jobs did too. Similarly, in the late 1980s, when the LBO boom stopped, employment in M&A contracted by 75% and did not fully recover for a good 5+ years. I’m sure readers can cite similar examples from other fields.

And this article fails to consider a new phenomenon: the vogue among employers for astonishingly narrow job specifications, as in a strong predisposition to hire only people who are doing virtually the same job at a highly similar company, and the usual bias towards stealing people who are currently employed from competitors rather than hiring the jobless.

By Pawel Krolikowski, postdoctoral research fellow at the Population Studies Center, University of Michigan. Originally published at VoxEU

Workers who suffer job displacement experience surprisingly large and persistent earnings losses. However, standard labour market models fail to explain such a phenomenon. This column explains the persistence of workers’ earnings losses by arguing that displaced workers face higher separation probabilities in new jobs, and take substantial time to find their ideal job. The framework also matches empirical findings on the shares of average earnings losses following displacement that are due to reduced employment and lower wages.

Displacements (e.g. layoffs) in the US affect many participants in the labour market. As an example, during the height of the Great Recession, around seven million workers with at least three years of tenure experienced a job loss due to layoff (Bureau of Labour Statistics 2010). In conjunction with this high incidence of displacement, there exists long and distinguished literature documenting large and persistent earnings losses associated with displacement (see, for example, Jacobson et al. 1993, and Davis and von Wachter 2011, henceforth DV). Although estimates differ, economists typically find that even 20 years after displacement, annual earnings are 10 to 20% below pre-displacement earnings.

Classical labour market theories fall woefully short in explaining this phenomenon as all workers receive the market-clearing wage, and there is no involuntary unemployment. This implies that displaced workers’ earnings should recover immediately. The standard workhorse model of frictional unemployment (Mortensen and Pissarides 1994) also implies small earnings losses as observed average job-finding rates in the US are high, and all workers receive identical wages when employed (DV). Furthermore, although DV show that a model that features cross-sectional wage dispersion (Burgess and Turon 2010) can produce nontrivial earnings losses, this framework cannot quantitatively account for the depth and persistence of observed displaced worker earnings losses. The literature sees the inconsequential nature of job loss in these models as a major shortcoming, hindering economists’ understanding of why high unemployment creates concern among policymakers.

My job market paper proposes a model in the spirit of Jovanovic’s (1979, 1984) matching model where workers displaced from relatively stable jobs take time to find similarly high-quality matches and encounter substantial risk of subsequent job loss following an initial displacement. These simple features can account for the vast majority of the depth and persistence of displaced worker earning losses (Krolikowski 2014).

Reduced Employment and Lower Wages

As far as post-displacement employment goes, the framework captures the following intuition. Compared to their stable job prior to the job loss, workers might not be as well matched in their first job coming out of non-employment. This results in tentative new employment relationships that are subject to a high probability of ending quickly. This leads to workers’ ‘spinning their wheels’ for a few years as they face repeated separations into non-employment after the initial displacement. This serial correlation in separations coincides with previous empirical work, where multiple additional job losses are found to be an important part of the workers’ post-displacement experiences (Stevens 1997), and I document the same phenomenon using data from the Panel Study of Income Dynamics (PSID).

The second part of the explanation for protracted post-displacement earnings dynamics is the presence of match-specific human capital and on-the-job search. This means that workers randomly get outside employment offers while working, and can move to better paying jobs over time. These features of the model deliver a ‘job ladder’ whereby newly hired workers start out in jobs with relatively low wages and move up the wage distribution via search on the job. This concept prolongs earnings recovery after displacement as non-employed workers enter poor employment relationships and search for better matches while employed.

When choosing the length of this job ladder, I use data on the amount of residual wage dispersion in the economy. Hornstein et al. (2007) measure residual wage dispersion within local geographic areas and 3-digit occupations, controlling for gender, race, education, and experience.1 Although estimates vary, these authors find that, even after controlling for various factors, similar workers can be paid very different wages. In the model, I attribute all of this residual wage dispersion to frictions in the labour market.

Matching Worker Outcomes

Figure 1 shows the average probability of separating into non-employment by tenure.2 Individuals with relatively little tenure experience monthly separation probabilities of around four percent. Those with high levels of tenure have markedly lower separation probabilities, around one-half percent. The model delivers these observed separation probabilities, and this is crucial to the model’s success. Displaced workers finding new jobs (with low tenure) experience markedly higher separation probabilities, and this hampers their earnings recovery.

Figure 1. Average employment-to-non-employment probabilities by tenure

krolikowski fig1 10 feb job

Figure 2 presents a comparison between the earnings of displaced workers from the baseline model and the results from DV. The outcome is very encouraging, with the baseline model delivering an earnings trajectory that closely resembles the empirical counterpart.

Figure 2. Annual earnings around displacement

krolikowski fig2 10 feb

Aside from matching the earnings losses of displaced workers, the model accurately captures the decomposition of lost earnings into reduced employment and lower wages. In particular, on impact, the model predicts that the majority of earnings losses are because workers are out of employment. Much of the short-run recovery in earnings can be attributed to workers finding new jobs, while wages, through the job ladder, explain all the long-run earnings losses. This is entirely consistent with the available evidence on displaced workers (e.g. Topel 1990, and Bender et al. 2009).

Figure 3. Earnings decomposition: Employment and wages

krolikowski fig3 10 feb

Concluding Remarks

Economists are well aware that worker displacement generates large and persistent earnings losses. This column provides evidence that a theory of job matching, with workers finding poor-quality matches after non-employment and taking substantial time to find high-quality employment, can account for the vast majority of displaced worker earnings losses. The framework implies two policy levers for mitigating individual earnings effects of displacement:

• Getting workers re-employed quickly to jump-start the process of finding a good match. This could be implemented using hiring tax credits or wage subsidies to stimulate the demand side, alongside traditional active labour market policies like disseminating vacancy information, and providing guidance with interviewing and writing quality CVs to buttress the supply side.

• Helping those out of work to find better matches coming out of non-employment. This suggests support for increasing unemployment insurance (UI) generosity, which should generate more stable post-separation employment (see Centeno 2004, for empirical evidence that greater UI generosity leads to longer job tenure).

See original post for references

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  1. jgordon

    Just a general comment that would never occur in standard economics discourse: societies requires a large energy surplus to enable the existence of highly specialized (and presumably highly paid) niches. If surplus energy were in decline, then naturally such niches would over time disappear. This would be quite disorienting for the people of such a society, and few would be discerning enough understand the larger process at work.

    I’m willing to bet that there would be quite the growth industry of shamans, mystics, and astrologers offering explanations for why people’s lives were sucking so much more than they used to. Some of the more numerically-minded charlatans might even dress up their ramblings with a bit of math, for that added veneer of credibility–if the society in question had cultural pretensions of being rational and numerate.

    1. ambrit

      We might end up with ‘Psychohistorians.’ But then, Asimov was a practicing chemist, not an alchemist.

    2. c1ue

      Meh, what an utterly incoherent set of statements.
      What does “energy” have to do with anything? What type of “energy” are you talking about – financial, physical, mental, emotional, what?
      The phenomenon of high paying workers not finding equivalent or better jobs quickly isn’t rocket science: in an economy where there really is a surplus of labor, companies have little to no incentive to quickly hire a high paying worker. Why not spend more time digging around for a cheaper one, or training up a less capable replacement?
      Taking from my experience in corporate life – there are also other factors at work. A higher paying job tends to be management. Management jobs are very important, but the hiring of a manager is largely personality driven. A manager in an existing company is generally there due to his/her successful navigation of the internal dynamic of that company – that exact same manager looking for a job has to re-navigate this internal dynamic in many new companies.
      The paper does a decent job of describing what is happening, but doesn’t do nearly so well in understanding the reasons for it.

      1. Rosario

        I think their critique was a bit deeper than that, and energy has everything to do with an economy. Where do you think specialization came from? Agriculture created food surplus, food surplus is more energy, thus more specialization. Coal is energy dense fuel, thus steam engines, thus more specialization. Same with oil or (we can all hope) whatever comes next to save us from our current coming energy predicament. All of human history is built upon energy production and consumption. When the former is less than the latter we must accommodate by the writ of natural law. Unfortunately, the prominent theories have clouded this reality, as if human progress is a magical, costless, inevitability only to be directed by intellectual will.

      2. jgordon

        When you are able to understand what I have said your consciousness will have expanded and you will have grown as a human being. I see now that my comment was a lot more useful and necessary than I was thinking. Way to go me.

  2. rusti

    Similarly, in the late 1980s, when the LBO boom stopped, employment in M&A contracted by 75% and did not fully recover for a good 5+ years. I’m sure readers can cite similar examples from other fields.

    My first position after finishing my master’s degree was doing compact embedded antenna design for wireless devices. A lot of the guys I worked with had been there for 15-20 years and had developed an incredible sort of grandmaster’s intuition for the design work. Less than a year after I’d started the company closed up shop and there were far fewer positions doing similar work in the greater geographical area than I’d had colleagues.

    Some landed on their feet, others were forced into an early and significantly more humble retirement than they’d planned. Another was unemployed and dismayed to find he was considered “too old” to even get some sort of janitorial work and others fared even worse.

    I was lucky to be young and flexible enough to find work in another city but took the lesson with me that building a broad base of skills is a necessary tradeoff versus the increased pay of intense specialization when you live in a neo-Feudalist society.

    Something that annoys me endlessly is the utterly absurd notion that increased automation will inevitably lead to high unemployment. There are enough intellectual and physical pursuits to keep 7 billion people occupied if we dedicate resources to it. Every unemployed person could be put to work in some capacity towards the goal of transitioning off of fossil fuel consumption, we just lack the political machinery to allocate people towards such ends.

  3. Jesper

    The short explanation of the phenomenon would be that the job-market isn’t a perfect market and any model using the assumption that the job-market is perfect will not match reality.

    & lets not forget the HR-department. They might (claim to) be paid to find ‘talent’ but the reality is that for HR to keep their jobs then they’ll only pass on CVs with perfect match of the (often poorly) understood job-requirements. If they send on a CV with a poor match then they’ll get in trouble, if they say they can’t find skilled workers then they’ll keep their jobs and get an increased budget to be used on head-hunters. Guess which of the two options they often choose? Then guess who pays for the additional cost: reduced profits or reduced wages for the new recruit?

    Oh and something that annoys me a lot is the assumption that new jobs will always be created after jobs have been automated away. It ignores the fact that the worked hours needed to have a living wage was significantly reduced up until the 80s and then the automation was instead used to create unemployment (winners get raises, losers lose their jobs) thus reducing the bargaining power of workers. The result has been the unequal distribution of income we now see today.
    Or maybe the rather horrible nightmare is that we’re Sisyphus: No matter how much we work on getting more efficient we will always without fail instead create more work for ourselves by trying to be more efficient.
    If wages can go to zero then, and ONLY then, we can have unlimited employment at current working hours, if wages have to be paying a living wage then there is a limit on the number of employments there are. So, wages going to zero and full employment or share the limited number of jobs that are paying a living wage?

    1. weinerdog43

      I agree and only want to add that one must now play ‘buzzword bingo’ with the job description compared to your resume/application letter simply to make it to the 1st round and not go immediately to the dustbin. Those that fail to understand that simple weeding out process won’t even get a response even if they’re the most technically competent person on the list.

      1. Jesper

        I remember the days before ‘buzzword-bingo’. If an employer in those days had to many applications then the employer, without reading the CVs, simply randomly discarded CVs down to a manageable amount. The discarded CVs would go into the bin with the justification ‘these people had bad luck and we don’t want to hire people who have bad luck’.
        The introduction of gatekeepers, HR, in the hiring process removed the some of the random discarding. I’m not sure which system is better, the system with gatekeepers playing ‘buzzword_bingo’ to keep applicants away or the random discarding. An aspiring economist could probably examine which one is better but the cynic in me doubt that an economist would find against a profession that is equally credible as economists…

        1. JTFaraday

          Buzzword bingo demonstrates compliance. Despite our trained tendency to believe that one’s job reveals the deep truth of oneself, the reality is more that the job is a performance from which one is (sometimes properly) alienated.

          Accepting one’s alienation from oneself, and frequently from society, is the first, unwritten requirement of almost every job. I would not have gotten my last job if I had not explicitly pledged my willingness to be alienated from myself. I won’t repeat the exact words that were used.

          I was willing to do this. I know what I’m doing when I take a job. I’m not an idiot. But then I got to live this in such a total(itarian) fashion that I resented it eventually.

          1. Roscoe Beardsley

            That’s my life story. I became so appalled at my own behavior as a manager over people I began to “even the score” for the sake of my (mostly) humanist soul and began to actively undermine the company and protect workers when possible. I left that type of work altogether after I quit drinking a fifth/day for almost a decade and could no longer even try to hide my disgust. Now “the woman and the kids and the dogs and me” survive by my wits, my broad skill set and a willingness to flout contemporary notions of what is ethical. Never been happier (except in college getting laid and doing mountains of blow).

    2. Calgacus

      Jesper:If wages can go to zero then, and ONLY then, we can have unlimited employment at current working hours, if wages have to be paying a living wage then there is a limit on the number of employments there are. So, wages going to zero and full employment or share the limited number of jobs that are paying a living wage?
      Completely wrong. Crazily wrong. Jobs are a social decision. There are not a “limited number of jobs that are paying a living wage”. What a bizarre notion. It is like thinking there are a limited, predetermined number of decisions that the human race can take, and we had better share them. Because if we make too many decisions now, we will run out of decisions later? When there is unemployment, adding workers allows everybody to be paid higher in real terms, because pay in real terms comes from labor.

      Think of an agricultural village, for simplicity everybody is a fit worker and there is plenty of land. So you are saying “If people have to be paid enough to eat and survive, then there is a limit on the number of people who can be employed working in the fields.” So I guess we have to keep ready, willing and able people out of the fields & make them starve – I guess the ones who don’t pass their Farmhand Aptitude Test, (FAT). On a sane planet, everyone who wants to work is allowed to, because their work benefits the whole village and themselves. And they all get a living wage or better; the more who work, the higher the wage can be.

      The problem is that when Keynes & Wigforss explained such things, there were enough “uneducated” farmhands who understood basic economics. Nowadays, people are indoctrinated in insane raving from birth, to the point that 2+2 = 4 looks confusing, difficult and wrong, while the transgressive quantum hermeneutics of 2 + 2 = 3 No Trump seems natural.

      See Rusti’s common sense immediately above. Somehow the brainwashing didn’t take: Something that annoys me endlessly is the utterly absurd notion that increased automation will inevitably lead to high unemployment. There are enough intellectual and physical pursuits to keep 7 billion people occupied if we dedicate resources to it. Every unemployed person could be put to work in some capacity towards the goal of transitioning off of fossil fuel consumption, we just lack the political machinery to allocate people towards such ends.

      1. Demeter

        What you are describing is Economic Calvinism: the religious theory that one’s destiny is ordained at birth, that there’s no gainsaying God’s WIll in the matter of what job and income and status you will get, and so forth. Women and minorities need not apply, I will add, in case you forgot.

        Unfortunately, for all its First Amendment PR, this is a strongly Calvinist nation, especially at the rarified level of the 1%.

    3. Calgacus

      Rereading your comment, it is likely that you were arguing the same way as I & Rusti did and I was being obtuse. Leaving my first comment up in any case.

  4. ambrit

    The narrowed job description trick has been around for a long time.
    An anecdote: My Dad decided to close up his plumbing business, why I’m not really sure, and began casting around for other employment. He had a pretty good skill set. One decent job that came available was as the head of maintenance at a local school. This would have been a Civil Service position. Dad having had some years as an Inspector, this was a decent prospect. Come the test day, all the applicants had to test out on things like paperwork, basic construction methods, building design, etc. Dad, as he later related it to me, passed these tests with flying colours. The final test, which Dad hadn’t been told about, required the applicant to drag out a sixteen foot tall folding ladder, set it up in the middle of a gym, and climb the ladder and change out a bank of fluorescent light bulbs. This test was timed, from opening the door to get the ladder out of its’ closet to returning the ladder and closing the door. This one test was given an inordinate amount of value in the test series. I remember Dad trying not to explode in rage as he said that one of the other older applicants commented that the School Board must be trying to keep older people out of the job.
    Dad later got his revenge on Dade County. That’s another story for another time.

  5. TG

    An interesting post, but I propose that you are over-thinking it.

    I suggest that it is all supply and demand. When workers are in short supply, then employers will not be picky about their skills, they will be happy to get anyone smart and hard-working and train them internally if needed. In that case if someone loses a job then the odds are pretty good that they will get a good one quickly.

    But when the labor market is flooded – either because corrupt finance crippled investment in the real economy thus reducing demand for labor, or forced population increases jacked up the supply of labor, then businesses can be ultra picky – not because of computers, or because they need to, but because they can. And if someone loses a job, well, in a declining labor market of course the next job will likely be lower paying – also employers have a preference for younger workers, and certainly they like hiring foreign indentured labor better than natives.

    If you are starving, and there is one apple, you’ll eat it, even if it has a blemish on it and is maybe not exactly the kind of apple you want. If there are a thousand apples and you are not starving, you’ll pick and choose, and take only a perfect apple that is exactly the right size and shape. Yes?

    1. lucky

      The last time employers were beating the woods for employees, Greenspan launched a series on interest rate hikes to reverse the trend.

    2. IveBeenThere

      Yes. Basic supply & demand. Companies are selective because they can be. I see this in the software business, where companies are content to leave a job open for months rather than hire an experienced engineer without a computer science degree.

    3. James Levy

      By your logic with literally thousands of people fighting to get those remaining high-paying executive jobs, the compensation for executives should be falling. Obviously, it is not–it is rising. Just as obviously Economists despise this reality and therefore try to bullshit us with theories about what magic unique snowflakes the actual CEOs and CFOs are rather than apply the methods of supply and demand they insist are valid and true in all places and times. In short, in a period of high unemployment, using the law of supply and demand, all wages should fall, yet top executive compensations have skyrocketed. Thus, the theory of supply and demand is seriously flawed and one has to look to things like power, connections, conspiracies, and propaganda to explain the real-world results.

  6. roadrider

    And this article fails to consider a new phenomenon: the vogue among employers for astonishingly narrow job specifications, as in a strong predisposition to hire only people who are doing virtually the same job at a highly similar company, and the usual bias towards stealing people who are currently employed from competitors rather than hiring the jobless.

    Yes, the purple squirrel syndrome is a large part of the problem, particularly in technical fields like mine (software development) where hiring managers and HR people, the vast majority of which are abjectly ignorant of the real nature of the work and how to hire qualified people, create absurd job descriptions and technical requirements that few if any candidates can meet. So they invent idiotic practices and procedures (How many years of experience in X do you have?) that cannot even come close to assessing the experience, knowledge and work history of candidates. But I guess its the best their limited intellects can come up with.

    I have been on the precise roller-coaster ride that Krowlikowski describes since my first layoff in 2006. I have had three jobs since then all of which ended within 3 years because, in the end, I was not really suited to the roles but had to take the jobs because I was out of work. Now I have been out of work for more than a year and a half and probably considered unemployable by most companies. I get a decent response from my on-line resume but once they find out how long I’ve been out of work I never hear anything back again.

    highly paid roles almost without exception involve highly specialized skills. If you cannot find someone who wants those particular skills, you then are forced to look for work that draws on your more general skills

    This is also a very real problem. When you lose your particular niche its very hard to find another one to fit into. Again, in technical fields this is almost a given since you can only go down so many paths with respect to specific skills and problem domains. When those skills fall out of favor, usually due to fad-driven technology churn, or your particular domain knowledge is no longer in demand you’re stuck. You can’t go back and live your life over again and become something else and retraining is usually expensive, time consuming and not a sure bet to lead to more job opportunities.

    But since the media, politicians and general public are busy celebrating a rather dubious “recovery” in the job market and bogus reports of “skills shortages” further cloud the issue employers, and even friends and family, cannot understand why you’re still out of work. The assumption is that its your fault and something must be wrong with you – lazy, unmotivated, not current with technology, etc.

    Society seems prepared to throw us under the bus and move on without us. Well, there are still nearly six million of us and that’s a lot of bodies to bury.

    1. jdw

      Part of the hyper-specific job description phenomenon could be that most big companies have a managerial class of HR people and managers who are trained in HR and Managing, without much in the way of practical knowledge. If you know you need to hire a teapot engineer and your current teapot engineers use Teapot CAD and Lotus Notes you want to get somebody with exactly that experience because you’re basically running a cargo cult. If you actually understand the process yourself you can probably judge an AutoTeapot user’s teapot designs even independent of the program they designed it in.

      1. roadrider

        Its not just big companies. This kind of crap is present in companies of all sizes and I can attest to that from personal experience.

    2. jrs

      “Again, in technical fields this is almost a given since you can only go down so many paths with respect to specific skills and problem domains.”

      True one can try to keep some broad base of knowledge but one can not possibly know everything. And then companies want something pretty specific anyway.

      1. roadrider

        Its OK for them to want something specific as long as they realize that no one has ever done everything that they are potentially able to do. Most people are able to do more things than they have been required to do in a particular job or even in their career. I have had to learn new things, whether it has been specific technical skills or domain knowledge, in every job I’ve ever had, No one is born knowing everything they will ever know. But that’s the assumption of modern hiring practices – if you haven’t done it before, even if you’ve done similar things with comparable tools then, by their definition, you can’t do it. They justify this by saying that they need to screen out unqualified candidates but this very practice illustrates that they have no real idea what a “qualified candidate” really is and are simply using an arbitrary process that fits within their extremely limited understanding of the job they are hiring for mostly for their own convenience. They even post requirements for having worked in a specific type of environment or within a specific type of project management framework, things that most workers have little or no input into or control over.

  7. ep3

    Ok yves, i haven’t gotten into the article yet. But when I see “university of Michigan” I expect the person only has to look out their back door to see the poverty surrounding the university. Except, the majority of U of M students are from wealthy east coast families, not the poor hard working persons that lived in downtown detroit. not to say that there are some. But michigan is expensive and only takes the best grades. So I am expressing my opinion that the author has no real world knowledge of the job losses that are right outside the comforts of his university. He doesn’t need models to learn about job loss and finding a new job.

  8. Brooklin Bridge

    The narrow job spec is just one more tool to break labor and is particularly effective as such (and nasty) in software. It is not shortsighted ignorance by pointy haired managers nor is it a bug in HR but rather, as Lambert says, a feature.

      1. roadrider

        Well, OK, I’m sure there’s some malice aforethought involved as well but malice and ignorance and are not mutually exclusive things.

  9. TarheelDem

    I argue that the “job market” is a poltiical patronage system and not a market at all (unless you go all Gary Becker on the analysis). Also, it is subject to drastic manipulation by the buyers (employers) through communications directly and through their business media and associations and suppression of similar communication and collective bargaining by workers. And as such, power politics and political processes dominate over the economic forces described in price system models. The law provides the limits on employer power, which is why businesses in the past forty-five years have subverted government so thoroughly.

    The phrase “job market” in 2015 has zero meaning.

    1. sgt_doom

      I believe Tarheel is exactly spot on, plus there are disagreements aplenty I have with the author of this blogged article.

      With every “jobless recovery” the same thing happens just as it happend over the last four years, when one-fifth the American work force was laid off (why don’t more people understand this?????).

      Normally, one-half or less of that one-fifth number can never find full-time work again, if they are able to find any, and the other one-half of the remaining one-half can only find work at lower wages.

      So, with each jobless recovery they have shrunk the jobs base, which of course, works to shrink the tax base, and a sizable portion of any new job creation is in the category of temp or contractor.

      1. redleg

        And by reducing the job base, fewer people have money to buy stuff, which reduces sales and tax base, which causes more job dislocations… Lather, rinse, repeat.

  10. mark

    One aspect not covered is the all pervasive non compete agreement. The narrower the specialty the more coercive these become. If you work in a narrow/specialized field there are few competitors and if you current (or immediate past) employer requires a covenant that you will not transfer to one of those competitors then you “job skills” may not be as valuable as you would like. Understanding that enforcement of non-competes varies state to state and the legality is questionable still does not make it any easier. I have been taken to court by a previous employer in the absence of a non compete on the basis that my knowledge gained in their employment was proprietary, they lost but it still took 3 months to get through the legal system and what new employer really wants the cost and hassle of 3 months of litigation for a new hire.

    Non-competes distort the labor market, resulting in people transferring to different areas of employment and reducing their “value”. Even those who have been laid off or fired may face an attempt to enforce a non-compete if they go directly to a competitor.

        1. hunkerdown

          The difference being that, at one time, lords were expected to abide by their own oaths to their lieges.

    1. MaroonBulldog

      The receivers of Arthur Andersen tried to enforce a covenant not to compete against a former partner who continued to practice public accounting on his own in Los Angeles after Arthur Andersen had gone out of business. How could anyone think you can compete with a firm that has gone out of business, and not coming back? Further proof, if any were need, the covenants not to compete can be put into the service of wholly unnecessary cruelties.

      The California courts would have any of it, of course.

    2. davidgmills

      Non-compete agreements have to be significantly limited in geographic area to have any chance of being upheld. Otherwise, they are considered as illegal restraints on trade.

  11. Jesper

    And the conclusions:
    1. “Getting workers re-employed quickly to jump-start the process of finding a good match. This could be implemented using hiring tax credits or wage subsidies to stimulate the demand side, alongside traditional active labour market policies like disseminating vacancy information, and providing guidance with interviewing and writing quality CVs to buttress the supply side.”
    Is a taxpayer subsidy to the employer that the employer can get as long as the employer can find a steady stream of unemployed. In some rare cases it does lead to permanent positions but those instances are so rare as to be completely and utterly irrelevant. It has been tried, it would work if employer would not abuse the system but Greshams law applies here – either employers abuse the system or they can’t compete with those that do abuse the system.

    2. “Helping those out of work to find better matches coming out of non-employment. This suggests support for increasing unemployment insurance (UI) generosity, which should generate more stable post-separation employment (see Centeno 2004, for empirical evidence that greater UI generosity leads to longer job tenure).”
    Mostly waffle, but I do agree that if the cost of being unemployed would be lower then the job-matching would be better. Sadly that argument loses out on the ‘work-shy would abuse the system’-argument.

    So, subsidise companies (1) and/or subsidise people (2)?
    Or maybe, just maybe come to the conclusion that if the proceeds of work are to be shared (alternatively let people starve on the streets?) then the work should also be shared?

    1. IveBeenThere

      So in conclusion, burden is on the individual to change, or be subsidized to compensate for their inadequacies.

      I don’t think classical economics touches on employer motivations for leaving positions unfilled. Many large companies use the (artificially high) job vacancy rate to argue for more H1B visas to import cheaper labor.

      Re-employment data would look quite different if the current employer subsidy (visa pools) were removed. That it’s not mentioned in the concluding remarks says a lot about the paper’s author.

    2. jrs

      work shy? Maybe one is many times bit to get work shy (ie to be careful exactly what environments they go into, because they’ve been through horrible work situations).

  12. Roquentin

    I’ve run into some of this firsthand. I got out of college in 2006 and just barely managed to get work in front of the recession, and it sucked pretty bad even back then. I’ve spent years and hundreds of applications trying to change jobs, but to no avail. There’s always some silly piece of software, some database, that they want you to know (and it’s different at every company), something you could learn in perhaps a week or two, but when they are flooded with resumes such trivial details will make or break you.

    I guess I still have a job, but I’m well aware how grim the prospects for employment would be if I lost it. The whole thing looks pretty bleak.

  13. MaroonBulldog

    I remember reading a Wall Street Journal article, several years ago, that reported on what happened to associates who became unemployed after failing to make partner at the big, white shoe law firms where they had stuck it out for the customary number of years. One headhunter’s assessment was grim: as far as the job market is concerned, those people might as well be dead. Her conclusion? If they want another job, they need to go back to school and learn another trade.

    There’s an up-or-out pyramid in many professions: a Navy lieutenant who has been passed over twice in the selection for lieutenant commander will not be permitted to remain in the Navy.

    Do we really need economists to juggle data and offer counterintuitve theories about why this is the case?

    1. roadrider

      Yes, out or up is prevalent in many areas of employment. The point is that while the market may consider these people as “dead” society can’t afford to. Those young enough to go back to school and learn another trade might end up OK but what about those of us who are only a few years from retirement yet too young for Medicare or to start drawing on our 401Ks or IRAs? Retraining is unlikely to pay off for us.

      You’re right – debating why up or out is practiced is stupid. But figuring out what to do with all the wasted human potential and how to handle the social costs of the dislocation of millions of workers as is the case now is not. And providing support for smoother transitions into either early retirement or alternative careers so that dislocated workers don’t end up being serially unemployed, which is really the subject of the paper, is a worthy endeavor.

      1. jgordon

        wasted human potential

        Given the fact that most human activity today is contributing to the mass-extinction event that’s under way, it could be said that a human could best utilize his potential by sitting at home doing as little as possible. Although a superior use of human potential, compared to that, would be learning to grow food and using a few appropriate (low-tech sustainable) technologies–and that stuff requires no employer whatsoever. Just free time to study, learn and practice.

        I’m saddened that people in our society feel that they need to turn themselves into an inimical threat to all life on earth and participate in the grand project of destroying the planet in order to be useful and appreciated.

        1. roadrider

          What a steaming pile of stupid, idiotic bullshit. There’s no necessary connection at all between enabling people to realize their human potential and mass extinction. Yes, many people do work in industries that contribute to environmental degradation but mass unemployment is not the solution!

          “Learning to grow food” (to wit: farming) would be an economic- disaster for most people since corporate agribusiness is destroying the livelihoods of even family-level farms. Do you really think mass-scale subsistence farming is the way to go for the millions of unemployed and underemployed people in this country? Is there even enough arable land and water for this?

          Do you have a job? If so would you quit it to follow your own advice? I’ll bet not – so don’t expect anyone else to be forced into what you advocate but apparently don’t follow since you’re using a computer to connect to the Internet which uses ungodly amounts of electrical power for the servers that host the web sites you connect to.

          This is a society that is unusually cruel to the unemployed. Its thoughtless and insensitive to suggest that we should just pack it in and give up our livelihoods while everyone else parties on in their corporate or government jobs and continues to find more ways to screw us out of our savings, access to health care and perhaps even our homes.

          1. jgordon

            The fact that you don’t realize the connection is the problem in and of itself. People are not isolated entities. Everything we do is connected to the larger reality of our world, and the large scale processes of our world have a feedback effect on our lives in turn.

            You’re asking about me? I maintain a bullshit minimum wage job–where I do almost nothing–in order to meet the minimum requirements demanded of me by this society. No, I don’t like it and it greatly offends me that I have to participate in this ongoing trainwreck of a civilization even to that limited extent. My real work, which I see as having tremendous benefit to mankind and which I don’t receive a penny for, is as a permaculture designer, where I design small-scale urban ecological systems and teach people how to grow food and live sustainably–inside the city.

            Frankly, I don’t care if people are thrown out of their “good” jobs. Good–that’s less people living high on the industrial hog. As energy surpluses decline and there are more and more of these people out of work, it will naturally become much more socially acceptable. Admittedly there will be some discomfort involved for those who aren’t able to adapt, but it’s a necessary process.

  14. Crank3yFrank3y

    Fearing it may increase the cost of health insurance, do HR departments refrain from hiring older workers?

    While working in a large advertising agency, I overheard a new HR person who had been tasked with evaluating policies from new health insurance providers. She remarked that she was finding advertising much easier than her last job. It was great for her because insurance companies were seeking her business because the average age at this agency was so young.

    While this assists HR achieve their objectives, I wonder how this plays out when executing the true needs of the business?

  15. bob goodwin

    The paper fails to mention two factors that I think are prominent, and somewhat related. I have experienced being laid off myself, with a multiyear salary hit, and have done a tremendous amount of hiring as well.

    The first factor is that salary assignment is far from efficient. Many people are able to ‘ladder’ themselves into salaries that could not be reasonably reproduced with a new job. Thus the question should be asked as to “how much of the salary inefficiency existed before the layoff, vs. after the layoff.” This is especially true with middle aged middle managers, who may be professionally on the decline or are becoming out of date, but still hold good salaries due to hysteresis.

    The second issue not mentioned is that hiring managers are looking for easy clues about who is good, and who is not. I can guarantee you that people without jobs are on average worse candidates than those that have jobs. While not universally true, it is certain to penalize those that are worthy but unemployed. Though different, the reason these two issues are related, is because it is the mispricing of pre-layoff salaries that causes layoffs to favor those who are overpaid, which in turn stigmatizes those who are laid off.

    Many of us get through this fine, but (obviously) many do not. If salaries did not ratchet, there would be less inefficiency that shows up after layoffs.

    1. roadrider

      I can guarantee you that people without jobs are on average worse candidates than those that have jobs

      Really? Would you care to provide some backing for this evidence-free assertion? There are literally millions of unemployed and underemployed people now. How can you possibly know that they are all “on average” worse candidates than people with jobs? After all, they once had jobs and thus, according to you, were better candidates. How can you account for such a mass transition from better than average to worse than average? Isn’t it much, much, much more likely that its just unfortunate circumstances?

      1. Billy Budd

        I had a boss that once tell me he never hired anyone that had been laid off as companies only lay off the ‘dead wood’. I think that attitude is very prevalent with managers that have never personally experienced a lay off.

        I once interviewed a guy that had been laid off from Nortel. I asked him how big the lay off was he got caught in. He said they had laid off all the employees on floors 3-5.

    2. Jeremy Grimm

      I think the “ladder” effect you are mentioning is elsewhere called seniority or experience. It accrues to those who stay with the same company for a long time. The idea was to build a base of loyal workers personally invested in the company they worked for. The ladder has two components to it, the increases to match inflation and increases related to performance. I’m not sure where you were/are on the salary ratchet ladder — until quite recently given the downturn in starting wages, I don’t believe I’ve ever been much above the going rate for my experience and the premium my firm might have to pay to a head-hunter for my replacement. Whether my salary was assigned “efficiently” — whatever that is supposed to mean — I have no idea.

      I object to your statement “people without jobs are on average worse candidates than those that have jobs” even given your equivocation “while not universally true.” Where and how did you get that idea? For one thing those who currently have jobs cost a lot extra to bring on. Is their better-ness worth the two weeks or so one of the lesser candidates might take to come on board? As for you idea those people laid-off are somehow unworthy or undeserving of their salaries I recall an entire group at ATT laid-off because the business area they were in didn’t do well one year. It had nothing to do with the general unworthiness of the group. One of the managers in that group allowed a design to go to the field that had to be retrofitted because it didn’t meet specification — and I can assure you the engineering staff was more than competent to effect repairs both before and after the systems went to the field. Neutron Jack was famous for selling or shutting down operations of any GE facility if they failed to meet his arbitrary requirement to turn a 15% profit every year. During the space race aerospace engineers were highly paid and highly valued, but after man walked on the moon … they were suddenly worthless and “overqualified” for other jobs they applied for at any pay rate. The jobs in my specialization all left the state where I live and I refused to move. As for your salary ratchet, a cut in pay associated with a move to a higher cost area was an understood inside my firm. There definitely was a ratchet effect on salary — my firm seemed very uncomfortable about allowing a salary decrease. I know of one well skilled member of the firm who being aware of the evolving situation refused salary increases to avoid getting caught in squeeze. Several of my co-workers, laid-off before me rejoined the firm at a lower pay rate and with less benefits after the firm allowed them several months to grow hungry while they enjoyed the many wonders of the job market.

      As for your conclusion: “mispricing of pre-layoff salaries that causes layoffs to favor those who are overpaid, which in turn stigmatizes those who are laid off” — that sounds like a neat excuse for the age discrimination characteristic of the American “jobs market.” What exactly makes someone overpaid — the fact they could be replaced at a lower salary paid to one of the more hungry unemployed or a fresh-out or an H1-B worker?

      I have remained technical my entire career and until quite recently I acquired, and mastered — and had been allowed to acquire and master the skills needed for whatever task I was assigned. I very much disagree with your comment about how the ratchet effect is “especially true with middle aged middle managers, who may be professionally on the decline or are becoming out of date, but still hold good salaries due to hysteresis.” How does a middle manager become out of date? The skills of a middle manager have nothing to do with a date-code, or the crushing advance of technology. I may be mistaken — correct me if I am — management skills don’t go out of date the same way technical skills can. Middle managers can become out of touch with their employees or their market, but that’s something quit different than going out of date. What do you mean by “professionally on decline” with respect to a middle manager? Is that code for “fails to meet sales quotas” or some other arbitrary measure? As for efficient or even fair salaries — what is fair or efficient about any of the wages or salaries paid? Fair and efficient must be inferred from some belief in the existence of and efficiency wonders of the “free-enterprise jobs market”. No one is paid a fair wage or salary. We are paid what we are paid. I am loathe to claim I deserved my relatively high salary because of “X”. I cannot believe anything I did as an engineer working for the Military-Industrial Complex ever matched the value of what a grade school teacher does. Although I came to the defense of middle managers, don’t ask me how I would fairly value their efforts … and definitely do not ask what value I place on the efforts of the CEO’s looting and pillaging what remains of American business and enterprise.

      1. bob goodwin

        I am middle aged and middle management. It is not a secret that a subset of middle aged and middle management become apathetic and fail to keep up as the world changes. I did not, and it sounds like you did not either. Salaries peak for many careers in the 40s and 50s, but for some people it is earlier or later.

        If you do not believe that the unemployed are a poorer hiring pool (on average), then you should ask this question of people who do a lot of hiring. We are all trying to hire well, and want to find the diamonds in the rough. Perhaps there is research on this, I don’t know, but this is far from a controversial assertion.

        1. Jeremy Grimm

          I believe am older than you. I am neither apathetic nor behind world changes. I am more than ordinarily competent, and I don’t make that claim idly. I am 2 years from retirement. I was better paid than most of my colleagues, I was technical, and I am not an agreeable sort. I am the source of contrary ideas. Considering my present situation, I could well see and hear the “buffalo coming” as they say in road-shopper circles — I was a road-shopper for many years before becoming captive at a contracting house. I did not fall behind the times. Times have changed very greatly and extremely rapidly, and for the ill of all American born employees.

          I demur asking people who do a lot of hiring whether the unemployed present a poorer hiring pool — on average — whatever you mean by poorer. Those who do a lot of hiring have already decided a priori that the unemployed present a poorer hiring pool. I do not believe they have a background of experience to support that conclusion. In fact, few of the people doing hiring now seem to have much experience. Like so many skills, hiring skills have been deprecated and diminished.

          On what basis can you assert your belief “the unemployed present a poorer hiring pool — on average” is not a controversial assertion? Do you believe that assertion because it has common coin among those who do hiring today? What of the simple observation that stealing an employee is more expensive than hiring one of the unemployed and allowing them a week or so to learn what they need to know? I have worked at many jobs at many companies in many many specializations and rarely (actually never) worked at a job where the specified skills matched the skills needed. In too many cases, the job as described, didn’t fit what the client truly needed.

          As a middle manager, you really must believe as you do. Good luck to you!

          1. zapster

            In my life, layoffs have always functioned as sabbaticals–chances to learn new skills that I didn’t have time for while working. I’m not alone in this either. It looks to me as if the unemployed may actually be *better* in terms of adaptability and in keeping up with technology. I’ve taught myself coding this time around, a skill I did not have time for while working as an analog hardware designer. I now have both sets of skills, which is a fairly rare combination. But, like the poster above, I’m 2 years from early retirement (which I never intended to take) and female–which is a monumental problem. My efforts are essentially going to waste because of the false beliefs of hiring managers.

            1. jrs

              What would life look like if we were officially allowed sabbatical? If it was policy. Not even a BIG just a sabbatical every 10 years for a year or something? If it’s wasn’t a stigma that one becomes an untouchable unemployed person if they take it. Yes I learn skills when I’ve been unemployed as well (but I’ve never really welcomed unemployment, because frankly I don’t know if I’ll land on my feet, but unemployment happens anyway). It’s an insane struggle to keep up skills while employed, though I often try.

              Let’s face it, we work too much to truly be good creative workers. We’re just trying to shovel out of drowning most of the time.

          2. Brooklin Bridge

            One wanders around in a desert of speculation until they realize that a good part of hyper specialized requirements are specifically designed and used by the upper managment layer, the one above HR, to frustrate highly skilled labor demands. Sure, super requirements work well with the domain ignorance and laziness of lower level HR, but ignorance and aversion to anything other than hiring “recipies” alone is totally inadequate to explain why multiple industries would continue to pass over competence and proven learning ability in favor of literally absurd specialization requirements.

            I remember, for instance, when Java first came out, about a year after Sun had made it generally available, reading advertizements asking for 4 or more years of “intensive” Java experience “in the field”. Ha! I suspect 4-6 years was the recipe for all technologies in that HR group and that they didn’t have a clue as to what Java was in the first place (I was always tempted to ask an HR guy what a Java looked like in it’s native habitat).

            This isn’t rocket science. When an economy that has been specifically engineered to break labor succeeds over time, millions of people find themselves without jobs for extended periods and the process is highly arbitrary to their skills and abilities. But for those who don’t like to imagine humans intentionally screwing over other groups of humans, it’s also true that crapification, no matter where you produce it, always makes a marvelous environment for further crapification.

              1. skippy

                Ahem… Uber-crapification…

                Skippy…. Hyper marketing till IPO… let nature take its course… or conversely… a dump…

        2. roadrider

          Well if you are in the hiring business then you are part of the problem. The system your are part of is not serving the best interests of either the unemployed or the hiring companies. At this point one would have to characterize it as a complete market failure mostly due to the bigotry, of which your evidence-free assertions regarding the qualifications of those who have had the misfortune to lose their jobs, are a perfect example, and incompetence of the people involved. Your assertion (and that’s all it is, a naked assertion without any supporting evidence) regarding the suitability of the unemployed as job candidates may not be controversial within the intellectually inbred circle of managers and HR people but it doubt that it will pass muster with anyone else.

          I can personally attest to the technical ignorance, poor reasoning skills and bigotry against unemployed candidates of the vast majority of HR people and recruiters I have encountered. You guys love to blast candidates for misspelled words on resumes and lack of applicable knowledge but I could easily put together a very long list of misspelled and misused technical terms in IT job postings and the inability of most manager level folks, HR staff and recruiters to understand the nature of the work and technical skills associated with the jobs they are attempting to hire for. I have no doubt that there are bad, unqualified candidates out there but people like you are merely using that as a convenient excuse to throw the baby out with the bathwater because you can’t be bothered to educate yourselves or go beyond the most simplistic and intellectually lazy methods for attempting to assess a candidates knowledge and abilities.

          You can only engage in this kind of unwarranted and gratuitous demeaning of unemployed job candidates because you haven’t lost your job yet. But your time will come and probably soon. Let’s see what you say then when the shoe is on the other foot.

          1. jrs

            The assertion that they are that much less qualified than the employed certainly needs more proof, especially when we know that people are biased. We know that racial bias for instance shows in hiring, and it may not even be overt, just people like to hire people like them.

            And yes I have toyed with the idea that the unemployed should be a legally protected category for hiring discrimination, but I don’t think that solves the fundamental problem either: not enough jobs (or a BIG :) ). It might change the distribution of unemployment (randomize it more maybe) but the unemployment problem remains.

        3. jrs

          The not hiring the unemployed is probably a fairly mindless heuristic that they use because they have to discard excess resumes (and well a lot of near equally mindless heuristics are officially forbidden, like race).

          There may be a correlation between being unemployed and being a poorer hire but I doubt it’s all that strong. But it doesn’t have to be very strong AT ALL if the goal is to dispose of excess resumes, there just has to be a very small correlation that they are legally allowed to use.

    3. Jeremy Grimm

      I feel you may have been piled upon — or may feel that you have.

      I recognize and acknowledge the ratchet effect you identified. It is a problem. It’s not just a problem for those of us looking for work. It is also a problem for employers. Once someone receives “X” dollars in salary, it is difficult for them to be happy working for less.

      As for hiring, I have also had to make some hiring decisions. They did not please me. A group of us had to find a candidate to fill in for skills we knew we lacked. In making that hire we had to pass over some very promising candidates. Even now this troubles me. The person we did hire fell short, and I had to cover for that shortfall. Unrelated to this, and worse — my lead mishandled the client so badly that the client pulled away our workstations and put them into a storage closet. In the end the direct client displeased his boss, killed our efforts — and the effective result of more funds than I care to contemplate ended up as lost bits and work stations becoming obsolete in storage. My lead was promoted. After repairing the mess left by our hire — who left for greener pastures after discovering he’d been severly low-balled on salary — I continued on at the same level I had to begin with. Admit it! Technical types like me are valued like old decaying furniture.

      I know only too well the difficulties in making a good hire. I also know only too well the bias and ignorance which drove my own decisions and the decisions of others.

    4. JTFaraday

      “The second issue not mentioned is…”

      This contradicts your own first excuse, which hypothesized that it’s the employed who are overpaid dead wood.

      Something tells me we could play this game all day. In fact, doesn’t the business press roll the excuses sequentially over time? Starts with a McKinsey whitepaper or something.

  16. Jeremy Grimm

    The coincidence of a putative lack of skilled people, the big push for more H1-B Visas and more STEM students foreign and domestic, and the hyper-specialized job descriptions … is interesting, especially at a time when I can so easily read about large scale layoffs of highly skilled workers, and read about how hard it is for them to find another job. I hope this observation doesn’t trigger Lambert’s ire against conspiracy theories.

    To make matters even more interesting, I recently joined the unemployed. I like to think of myself as highly skilled, a deliberate generalist, specialized in adapting to new jobs and quickly learning new skills and job requirements — the two weeks of picking up language X and/or database Y or some other hot rock of the moment as described in an earlier comment. I must admit, after over twenty years of being compelled to pull rabbits out of my hat or else find my way to the back door for a final exit, I am definitely “job shy” and worry that I am looking at a somewhat earlier than hoped retirement.

    In looking for new employment, I notice one feature of the skills hyper-refinement I don’t believe has been mentioned yet. I’ve encountered database program after database program at the “career” websites I visited. These programs, along with variations on an AI theme appear positioned to replace the greater part of the lower level personnel people. Almost all of the of the personnel people at the firm I parted from were contractors, probably contemplating their own grim prospects as they send out layoff notices. Jobs and resumes seem to have devolved into commodities quantified and mapped into countless bins. I can only imagine what sort of scary matching AI attempts to marry resumes with jobs. I suspect the state lottery offers better odds for being picked a winner. When I get hungry I’ll have to check with TATA or Infosys to see what they can do for me. They seem to have a mysterious way of finding people with hyper-refined skill sets — and at relatively low pay rates too!

    Another related problem is the evident decline of small business — at least evident near where I live. Back in the days of the big layoffs of engineers after putting man on the moon, I heard stories of at least a certain number of those engineers starting up small businesses. I worked briefly at a gas station owned by a laid-off aerospace engineer. It wasn’t easy to start a small business back in the 1960s, but I have the impression it was easier and less expensive than it is today. In the last few years, I’ve seen several local businesses go out of business because rent increases forced them to move. A local shopping area is full of vacant commercial space. Before they left, I talked to the owners of the businesses driven out all of whom had been running going concerns in the little shopping area. I asked them why they were closing and moving. I heard story after story about rent increases. Their departures were followed by long-term vacancies continued to the present. Most of these local businesses were unable to reestablish themselves elsewhere.

    As for the post — I agree with several earlier commenters inclined to regard the author as clueless. I suspect a little time spent on the unemployment line might provide this author with some new insights.

    1. Kyle

      Go get ’em Jeremy!

      I’m one of the contractors you’d mentioned above. After having been laid off from permanent positions with various outfits due to adverse business environments, I decided that the chase for seniority and bennys just weren’t worth the effort, I simply stayed a contractor for the extra cash, saved my money and was lots happier. Got to see a lot of management styles both good and bad. Teams that could get things done and a LOT of dead wood. I’ve seen division departments that, were I to become the manager, half would be laid off with the other half required to take some serious in-house skill development. I’ve seen CV’s that were more boast than honest and believe me, it shows. I became very good at what I did and had met few in my travels that could best me in database management, spreadsheets, cad or cam or knowledge of my division and when they did, they were some of the best and knowledgeable in the business. I’ve had people, those who were very rarely heard to curse, walk up behind me, watch for a couple of minutes and walk away saying, “g*d dam*”

      Yet, when you walk into that interview, you never knew whether you’d get the job or not because the managers really had no clue how to evaluate a person’s capabilities. It might be personality, management style or sometimes god knows what that gets you hired. It’s definitely not that they know how to put a team together. I learned to be sure to ask them to pass my CV on to their department supervisors for an evaluation. Those are the guys that decide whose on their team. I don’t know how many times I’ve heard, “You’ve got two weeks.” Noooo problem!

      A lot of these skills are transferable but the unknowing managers think experience in their industry is required. That’s how little some of these guys know, they’re clueless.

      I’ve submitted so many resumes to head shops it makes your eyes bleed just to keep up with the lists. After a particularly extended period of unemployment I started walking in to the firms. I walk up to the head receptionist, hand her my resume and ask her to see to it that the hiring manager in my division got it on his desk. I usually get a very firm affimative. Found out that way that the head shops weren’t submitting me or that I was getting lost in the stack…one in the can, one to review, another in the can. I’ve gotten quite a few that way. He’ll look at the CV more individually that way. If nothing else, you at least get an interview for showing some initiative. When I was reviewing CVs, I always gave each one a good going over, was familiar enough with the requirements that I could spot the good ones quickly and going through a stack didn’t take long. Plus, when an industry is ramping up, the good talent is going to find a job quickly. So you want to get them in the door as soon as possible.

      Hey everyone, listen to Jeremy. He knows what he’s talking about as do a couple of others here.

      I’m going to posit that the author of this article doesn’t know a lot about business or industrial or economic cycles. And most definitely is probably clueless that it’s not only the blue collar jobs that are going offshore. Lots of the white collar jobs are going also and increasingly so. And our government is paying companies to send them away.

      1. Jeremy Grimm

        I am greatly encouraged by your experience with carrying your CV to the head receptionist. I will do that too. When I was much younger, that was how I got my first job. Every place I went had a pile of resumes. When a job opened, it was much easier for the hiring managers and for personnel to interview me when I was there and there week after week. I thought that magic was lost. I’ll believe again. When I was younger and supported a family, I shied away from high level and therefore high risk positions which I could have filled but for which I could not take the risk. I can now, and thanks to your experiences and encouragement I will go after the positions I know I can fill. Thank you!

        1. Kyle

          Hey Jeremy,

          Stay away from the contract design companies, if possible. I never worked for any but the people that I worked with that came out of them weren’t that great. Go straight for the engineering firms. Some of the head shops are good if they have ex-engineering personnel as recruiters on board. They recognize good resumes, but you have to talk to a lot of shops to find them. The massive resume mills are no good. This is what a few of the unemployed engineering personnel did when times were lean and the successful ones stuck. Some began their own recruiting companies and did well. I called shops after sending out resumes and talked to recruiters. Gives you a sense of whether that recruiter has some background or if they’re just salesmen…they sound like boiler-shop salesmen. I won’t do business with them if not necessary.

          The older personnel I occasionally encountered were very knowledgeable and knew a good bit of the history of the industries in which they worked. The were a joy to work with but needed some new technology skills efficiency improvement. They knew why you did certain things and why you didn’t do others. In other words they’ve seen the failures, some all the way up to sinking a semi-submersible oil rig on it’s maiden voyage. LOL! How’s that for lost revenues? Experience counts! Any manager that doesn’t know this hasn’t been doing his homework and isn’t worth any salary.

          The new technology hot shots that developed programming skills in addition to their base knowledge have an extreme efficiency advantage (and I mean extreme) and will blow anyone out of the water. If you get on board, get to know them. They have the tricks and have developed small tools that cannot be beat. Companies would like to steal these if they can. Never let them take your tools. Your efficiency and skills will ramp up rapidly and you’ll blow yourself away how easy things can be. However, don’t let the company pile on more work just because you’re good. They won’t pay for it, the stress is no good and they won’t stop.

          Good luck!

  17. Gaylord

    Simple answer: because it’s not about “human resources” but rather human exploitation for profit.

  18. redleg

    How come economists can’t figure out that without customers there aren’t jobs, no matter how low the prices are, how well trained possible employees are, how low the taxes are, etc.
    Prices for goods and services can fall to almost nothing and still be unaffordable to those with nothing.

  19. Jim A

    How much of it is it a matter of the difficulty of finding high quality employment that needs one’s skils, and how much is developing new skills which make one more uniquely suited to the new field? People can and do develop new skills to more perfectly suit them to working in a new field.

    1. Jeremy Grimm

      The problem is a matter of employer faith that you have indeed acquired the new skills they are looking for. This leads to the endless problem of collecting “certifications” and new degrees.

  20. Scott Bailey

    About the article– let’s give the author some credit for trying to model reality instead of perfect competition. What would be even better would be if he had discussed the role of geography. The commentator who suggested the author should take a look at the state he’s in (Michigan) had the right idea. Place, and what’s happening in that place, matters.

    1. jrs

      I really think lack of on the job training is part (oh there are so many things!!!) of what makes jobs SO frustrating these days. And I don’t even mean the type of training you could get from a class or a book or a convention. I think that’s also a good investment to improve the quality of one’s workforce, but the most ambitious will teach themselves that, but I mean training in that business. Heaven knows how many hours, years if it’s added up of productivity (yes even in the least productive employees – even they would do better, even if better is relative) is lost due to this stumbling about in the dark clueless!

      1. Lambert Strether

        The powers that be seem to be engineering a demotivated, ill-educated, desperate, and cheap workforce.

        Servants are cheaper, of course.

        Adding, I doubt of NCLB and Common Core will do anything other than exacerbate this.

  21. ambrit

    Despite being “The Lowest of the Low” (Trademark applied for) Mississippi is having some debate at the State level about Common Core. It’s not turning out to be a ‘slam dunk’ for the Accumulators.

  22. Randy

    What I can’t figure out is how I keep getting 100k/year jobs as a front end web developer in NYC after a long track record of not giving a fuck. I sort of care but I’ll never be as into it as I’m supposed to be. Fifteen years in the industry and I have nothing to show for it. I read the other day there are 300000 jobs for developers in NYC. Hard to believe except I can clearly see the demand working in my favor. How fake is this economy?

    1. randy

      cripes, no one says anything in response to this comment. i hoped it would give rise to some talk about the tech sector or a big picture view of the job situation. seems you have to write three paragraphs here to get any currency.

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