Wednesday, September 10, 2008

What Can We Do About Unemployment? - Part 2

At the end of my previously posted article What Can We Do About Unemployment?, I stated that the older more experienced professionals are having perhaps the greatest difficulty of all in finding work.

When my sales engineering job was eliminated after 21 years of service, I knew that I would have some difficulty finding a new job. In the years after 9/11, the entire industry I was in was laying off workers. The economy will turn around someday I said to myself. And when it does, I will be there to help some company out there who will benefit from my experience and skills! Since then, the economy did turn around (somewhat) and has since turned sour again and I am still looking for that company.

My friends told me that my age at the time (almost 50) is working against me. But I had a lot more to offer than people just graduating from college and I wasn’t going to use that as an excuse. But the more I kept hearing that I was “overqualified”, the more reality was setting in. I had everything an employer could possibly want except the one thing they seemed to want more than anything else — youth.

If you look at many of the job postings, some ask for a college degree with 0-5 years experience or maybe 2-5 years experience (Translation: We would prefer someone in their 20s.) Or there are the ads that are looking for entry level workers to “come grow with us”.

And then I came across a copy of Fortune during a visit to a bookstore with the cover article which I hope you will read in this link
50 and Fired having as its lead-in paragraph:
Getting fired during your peak earning years has always been scary. You'd scramble for a few months, but you'd find something. Today it's different. Get fired and you can scramble for years--and still find nothing. Welcome to the cold new world of the prematurely, involuntarily retired.

When I graduated from college, I had to work as a bartender for a few months until I found work but a company seeing that I had the personality and aptitude for sales engineering finally hired me and was willing to train me. Later on at age 27, I was again looking for work but another company was in the process of hiring a bunch of college graduates to train for their student program. I was no longer a student but I was close enough so they too hired and trained me which lead to 21 years of service until my job was eliminated.

What this underscores is that most companies, especially larger ones, do most of their external hiring to fill entry level jobs with most of their other jobs being filled through internal promotion. But non-entry-level jobs are posted all the time, you say. Right you are, but many times they are posted just in case no internal applicants can be found. And many times they will grant interviews to external candidates just to make it look like they are getting a fair shot. But since the internal candidate always gets preference, we know how this is likely to turn out. For someone who has a job and wants to change employers, this is a disappointment. For those who don’t have a job, they can be in a desperate situation on the outside looking in.

But as grim as the Fortune article is about the chances for people in this age group, it overlooks the plight of people who really still need to work in order to afford the necessities of life. The subjects of the article were well compensated and enjoyed a relatively affluent lifestyle in keeping with the typical Fortune reader profile. When these people were not able to find work, their egos were hurt more than anything else when they changed their label from ‘unemployed’ to ‘retired’. But others were not as well compensated and haven’t been able to save as much money. Some still have children’s college expenses. And others have had financial setbacks from divorces or perhaps health problems. Retirement for me along with these other people is simply not an option!

While companies are willing to hire those out of college without experience to learn and grow on the job, the only way to increase ones value for an employer is to acquire more specialized skills that the company can use. This stands to reason. People who have more specialized skills due to their education and experience generally command a higher salary. But this is a double-edged sword since these more specialized skills are more difficult to transfer to another job if necessary.

My electrical engineering profession is a notable example. There are dozens of specialized fields within electrical engineering that lead to their own separate career paths. But what happens when these people ever have to find new jobs? One of the passages in the Fortune article includes a sobering figure from
IEEE, the professional organization for electrical engineers: A November (2004) survey of 983 IEEE-USA members, median age 49, found that 42% were unemployed.

So for many professionals with specialized skills, the only way to try and get back into the workforce after being laid off is to try and get an entry level or other lower paying job within that profession. Then that person can hopefully work his or her way up the ladder again by internal promotions in the new company. This is not ideal, but it sure beats flipping burgers! But even this often doesn’t work because employers are extremely resistant to hiring someone they feel is “overqualified”. (Translation: You’ll leave as soon as you find a job that pays a salary you used to make.)

The result is that these people are in an unfair situation where they are “overqualified” for entry level jobs but “are not a good fit” for the non-entry-level jobs.

While no employer is putting out a sign saying “OLDER PEOPLE NEED NOT APPLY” since that would be illegal, hiring policies by many companies clearly put older job seekers at a significant disadvantage compared to younger ones whether that is their intent or not. While older candidates must submit applications to companies and hope for a response, some of these same companies have recruiters to visit and interview graduating college students on campus. And as the Fortune article relates in more detail, successfully filing an age discrimination suit through the overworked and understaffed Equal Employment Opportunity Commission is the longest of long shots.

So when trying to come up with solutions, we have to first of all acknowledge that unemployment (and underemployment) are serious problems that affect a lot of people in addition to the families they must support. They are not looking for a handout but a way to help themselves out of a difficult situation.

Unemployment is a complicated problem with a number of causes, some of them interrelated. There are no grand solutions but hopefully a comprehensive policy that uses a collection of coordinated smaller solutions can help us to make some headway. It will be interesting to hear how our presidential candidates intend to address this issue. In the meantime, I would like to humbly offer some proposed solutions in my concluding article.

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