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Eh, there is something to what he's saying. The idea that the labor market behaves rationally is a childish fantasy. Employers are not rational. They do all sorts of irrational things, and discriminating against the long-term unemployed (and also women returning to the work force from motherhood) is one of those irrational things.

It's almost a dating mentality. They jump to the conclusion: "well if nobody else wants him, why should I?" In reality, people can be long-term unemployed for all sorts of reasons that have nothing to do with them being a bad potential employee. Maybe they have really specialized skills or want a really specific kind of job--the nature of such situations is that there is going to be gaps in how long it takes to find the next employer looking for those very specific skills.

Well if they act irrationally they will be sufficiently punished by the market (no childish fantasy required). There aren't enough jobs? Then create more jobs. Starting a company, at my last check, is incredibly simple to do. Of course, turning a profit is hard, which is why people turn to the government to provide them with work rather than take the risk of starting a company. The government doesn't need to turn a profit, it collects taxes. Therefore it's a very attractive alternative to the cold, hard realities of the market. Of course, there's only so much tax money to go around..

The market doesn't punish the companies for irrational behavior when everyone engages in the same irrational behavior.

Why don't you engage in rational behavior and get rich?

"The market can remain irrational longer than you can remain solvent"

Please go learn what this quote actually means (hint: it refers to speculation, not consumption).

I know what this quote refers to (and it's not particularly kind of you to suggest I don't, if I may say). I meant to point out that engaging in "rational" behaviour when it comes to hiring in a market you perceive as behaving irrationally is no guarantee of becoming rich any more than engaging in "rational" behaviour when it comes to speculation.

There are people who have done precisely that in places like South Korea where there is very overt discrimination against educated women returning to the work force after their children are a little older. If I were starting my own firm that's exactly what I'd do (and some day, I might).

There are some places in New York that at least have the right idea (I don't know about the implementation): http://www.cravath.com/benefits ("We have an associate re-entry program that is designed to foster a connection between the Firm and those associates who leave the Firm for primarily family-related reasons... we hope that these former associates will consider returning to the Firm if they decide to practice law again.").

Trust sparsity ("bozo bit") is an irrational behavior that doesn't make anyone rich. In general, it makes everyone poor.

You won't get rich. You will have a somewhat easier time hiring people.

The difference may be small enough that you wouldn't even notice subjectively.

Well if they act irrationally they will be sufficiently punished by the market (no childish fantasy required).

The market does punish shitty corporations, but it happens over years to decades, and most people can't wait that long. How much comfort is it to someone who's unemployed if Microsoft breaks off and falls into the ocean in 2025? These people want jobs now and, as far as I can tell, don't really care what the market does to the companies that won't hire them.

Also, companies are mediocre (refusing to hire unemployed people is moral mediocrity, since no effort is spent finding out why he was long-term unemployed) because most people are morally mediocre. So, while good companies eventually come up and replace bad companies, they're also getting worse as time goes on.

Most of the people these articles are written about don't live in SF or NYC where there are a large number of good companies, so the option of not working for mediocre companies reliant on social-proof bullshit might not be one they have.

My personal thought: long-term unemployed should lie. Yes, I'm under my real name, and I'm still saying that. I don't care. I feel like anyone (even an employer) who relies that much on social proof deserves to be deceived. I've never lied on a resume, but I have no issues with people who lie as pertains to this particular matter. If you've been out for 10 months, make something up.

Sounds like there is a market opportunity for job coaches. Reasonable-reason-for-extended-absence-from-the-job-market as a service, anyone?

People, especially young recent graduates who make up a big part of the unemployed, really need job search and interview coaching. Their parents and schools have left them completely unprepared for that task.

Devil's advocate: or is it employers that need interview coaching? If a candidate otherwise suited for the job (with necessary training, skills, aptitude, etc) is rejected on the basis of an interview, I would suggest it's a problem with the interview.

Unless, of course, there aren't enough jobs for qualified candidates, which is a different problem altogether and interview-training some candidates will only result in an arms-escalation without any benefit on the macro scale.

There's also a market opportunity for "career incubators" that train people relevant skills, like that one organization in S.F. that was training Rails developers from the ground up.

Any particular reason you say that other than the existence of the aforementioned "career incubators?"

This story seems to be a problem in need of a solution. Doesn't that suggest a market for solutions?

Problem is, who's going to pay? Unemployed, especially long term unemployed don't have any money since they can't blow their monthly food budget on a 15 minute consultation.

I actually have an idea for how to solve that problem but I don't want to blow the idea. There's a startup concept that could work, but I need to pass it by a few key players.

My plan, if I ever am unemployed with no chances immediately available, is to work up a consortium with the other people in my position and do some kind of coop business on the internet. We can all get together in a cheap coffeeshop or one of our places and start hacking. I feel very ruthless in this metter: I refuse to just "lay down and take it". I can fix computers, perform small business IT, create websites, software, etc. My time immediately becomes "free" to burn a great deal of it on this sort of thing. Job hunting does not take THAT much time if you're looking in the right place.

If you are long-term unemployed, IMO, you are your business, and you need to hustle very aggressively on that.

Imperfectly or no, isn't this what recruiters do?

Recruiters work for the company, because that's who pays them, and because companies tend to be more selective but also more stable as clients (i.e. you'll lose a worker after 2 bad placements, but usually not a client).

Companies will eventually be punished for acting irrationally, but, in the short term, they can be rewarded quite handsomely.

This reminds me of an old trick I've heard used on multiple occasions. We've all read the Hack News posts about how no amount of programming can compensate for a poor personality. Image that you're looking at an applicant and their former employer tells you:

"He was a good coder, but he had a serious anger management problem. You should do code reviews over the phone if you don't want books thrown at your head."

You're probably not going to hire this candidate.

Now, imagine that you're a manager who has a great, professional programmer who is leaving your organization. When other companies call for a reference, you could tell the truth, causing your competitors to hire her and their business to improve. On the other hand, you can make up a story about poor inter-personal skills and keep this talented worker out of the workforce. If you can't have her, no one can. On the reverse side, you give glowing recommendations to your worst coders so that their terrible practices fill your opponents sites with massive security holes and performance bottlenecks. As an added bonus, when your current employees figure out that they'll have a hard time finding a new job after working for you, you can keep their salaries below market rate.

Now, this won't work in the long term, since you'll eventually gain a reputation as a liar and your recommendations will be ignored. However, as long as you remain small, it will take you quite a long time to get this reputation. Is the CEO of FerriDyne systems honest or a liar? Meanwhile, you can keep a promising employee out of the job market for six months until they come crawling back for their old job at a fraction of their old pay.

This technique also makes recruiting difficult, since your employees won't recommend their competent friends for new positions. On the other hand, you can just get in the habit of hiring other people with large gaps in their record. If they're incompetent, then you let them go and recommend them to your competitors. If they're good, you hire them on at a discount since they haven't been able to find a job in six months.

Granted, I'd never do this and I'm sure you wouldn't either. It's underhanded and, ultimately, irrational. Lying leads to a breakdown of trust that weakens the whole financial system. However, if you're leading the charge towards that collapse, you can make a lot of money on the way.

How common is this sort of stuff?

I think not common, at least not in the US. The risk of liability is too great. My company has a strict no-comment policy, and won't affirm anything beyond dates of employment and job title. This seems to be the norm for corporations.

Smaller business who don't have their own HR and legal departments protecting them may be a bit more forthcoming, but probably not much.

Big companies find other ways to do it though. Don't believe for a second that nut job managers won't do everything they can to screw your career if they feel slighted.

What? Companies call your current employer for references? That's unbelievably stupid.

A smart company would call the employer before your current one, because your previous employer would have no interests at stake.

Starting a company is easy. Hiring people is hard. There is a ton of regulatory paperwork and costs that kick in when you start hiring people.

So you think I'm arguing for a rational market. I am not. Another commenter thinks that I'm ignoring the benefits of getting up and working any kind of job. I am not.

Why would you guys have such diverse opinions on what I'm advocating? Because the problem is not sufficiently stated. That's my entire point. You make one measurement and say "let's work on this directly" and you haven't said much of anything. All you have is correlation. Lots of correlation in the world. It's like the doctor taking your temperature and then applying ice packs because you have a fever. Maybe you have a cold! Maybe you just exercised! Maybe cool water would be better! And so forth. Hell, I don't know what you have, all you've given me is one data point.

If you don't define a problem well, you can't define an experiment to prove that some intervention works or doesn't work. You just have a measurement you want to be different. That may be a huge social problem, but in terms of being useful, it's not a lot of anything. I don't particularly like the fact that high schools graduate so many kids who fail a reading test, but I doubt changing the test is going to alleviate my concern.

Sure, the market is probably irrational to one degree or another. That doesn't mean that we should approach it with an equal degree of irrationality. This very well could be a multi-faceted problem only solved at the level of the individual, like most problems are. Or not. From this article, we don't know one way or another.

I really enjoy your comments.

>They jump to the conclusion: "well if nobody else wants him, why should I?"

Having been in charge of hiring, this is way, way more true than it is false. It is not irrational at all.

Do you have statistics on how often you've hired long-term out-of-work people and the frequency of said people to be sub-par employees?

For what little it's worth: I can think of 6 colleagues who have been, or are currently, long-term unemployed. I personally wouldn't have hire any of them, had it been my decision. I'm glad it wasn't. Two of them were among our best hires ever. The other four didn't work out so well.

Still, that's quite a high "hidden gem" rate.

Honestly, some real skills do disappear with long-term unemployment, like getting up on time every day. Even working a made-up job is probably better.

But real job skills do disappear, too. If one person has been working with machine tools 40 hours a week while the other hasn't used machine tools for six months, hiring the first is the rational thing to do.

Personally, as a software engineer, I've enjoyed my bouts of unemployment, because I've had the chance to deep dive into new things I never had the chance while working full time, and I've come out of them more employable. (Although I'm in the job hunt now while still employed, and recruiters and employers seem to be giant flakes, maybe because I'm not calling them twice a day, or maybe because they just suck.) But this isn't the norm.

> If one person has been working with machine tools 40 hours a week while the other hasn't used machine tools for six months, hiring the first is the rational thing to do

yes, but the point is that companies would even prefer hiring people that have been doing work in a different industry recently than someone who is 6 months unemployed but with experience in the same industry.

I think it simply comes down to employers automatically assuming that you have some sort of major flaw if you've been unemployed for so long.

* I've enjoyed my bouts of unemployment, because I've had the chance to deep dive into new things I never had the chance while working full time, and I've come out of them more employable.*

It follows that staying in one job for a long period would tend to make you less employable... And indeed I've witnessed this very thing.

During the Great Depression, the government did exactly this, and it worked out extremely well. A lot of parks still use the infrastructure created by CCC employees, and the employees learned valuable work skills, earned a living, and were more productive in the economy and military once the spending boom of WWII began.

http://en.wikipedia.org/wiki/Civilian_Conservation_Corps

The reason here is that the interests of employers are misaligned with society's interests at large.

Individual employers are clearly demonstrating that they have a disincentive, rational or otherwise, from hiring potential employees with large gaps in their resumes. This obviously will tend to feed back on itself, making long gaps longer and unemployable applicants even more unemployable as time passes.

Society, on the other hand, has both economic and humanitarian interests in minimizing the number of unemployable individuals. Since the market has inadvertently began creating a large pool of these unemployable people, and it shows no sign of changing in the short to mid term, then society can and should apply non-market forces to advancing its interests.

Honestly, I'm not sure if direct employment is the best solution; I'd probably prefer some variation on tax incentives for employers. But reaching for the hammer, as you put it, is not always a knee-jerk reaction and seems like a pretty rational instinct in this situation.

Long term unemployment is intrinsically destructive, both to the individuals losing careers and money and to the economy as a whole. While understanding why it's happening is important, it's also important to compensate for it, for the good of society (and the economy) as a whole. Government is one of the few agencies that at least theoretically has the care of society as one of its goals; private corporations aren't going to give a sh*t, they're not going to "take one for the team" and hire less experienced people, even if the long term effect is increased consumer spending.

It is after all why things like welfare exist. So peoples' lives aren't ruined, and the secondary effects of that happening on a wide scale.

I absolutely do think that employers should only be able to ask how long you worked somewhere and not how long you worked there. Sites like linked in should give you the ability to only publicize tenure and not approximate dates of employment.

I'm employed but but an issue like this is worrying for other reasons like the decision to take a break from the labor market and travel. What if I want to dip in my savings and travel for a year. I'm unemployed for greater than 6 months in such a situation but voluntarily so.

"It probably exists for a reason. Understand the reason. Then take action."

Exactly. You can't defeat the "enemy" (for lack of a better way to put it) unless you understand what they are thinking, motives weaknesses etc.

More typical that people want to put no effort into research or understanding and just have something work out. Laziness.

The good news is that by putting in the effort you can easily take advantage of a typical shortcoming like this.

Here's a solution that doesn't require the government to hire long-term unemployed: lying on a resume or in an interview to conceal unemployment is now legal. (Well, technically, it was never illegal; just considered unethical.) You may:

* Expand dates of any job by up to two months or 10% on each side, whichever is larger.

* Bump an educational degree forward by up to 5 years if under 40, and 10 years if older.

* Move any employment engagement translationally by up to three years.

* Inflate title as long as it does not involve falsification of a professional credential (e.g. "Senior VP" is OK, "Physician" for a non-doctor is not).

Anyone who is fired for such now-legal falsification must be given six months' severance or there is a wrongful termination claim.

How does that sound to you?

(I don't think it's a good idea, but it is an improvement over the system that exists now.)

I think it sounds like a terrible idea. As an applicant, I would never take advantage of it. As an employer I would never WANT to hire anyone who took advantage of it. A side effect would be that I would begin to distrust resumes and would therefore hire more by word-of-mouth instead, which would reduce opportunities for minorities and those less well-connected.

I would begin to distrust resumes

You mean you now trust resumes?

Um.... good point.

I would trust resumes even LESS than I do now.

If a candidate would lie about those things, they'd lie about things at work too.

Better to be honest, noble and unemployed.